Fundraising Fundamentals Elements for Raising Money Through Product Sales

Why Product Fundraising Schools and youth groups raise nearly $2 billion each year through sales of popular consumer products. The money helps pay for computers, field trips, athletic, music, art and other programs that educate and enrich young lives -- important programs that are not always covered by shrinking school and non-profit group budgets. While there are a number of fundraising options available -- bake sales, car washes, charity events, straight donations -- product sales are consistently the most effective and financially rewarding approach to fundraising. Millions of parents and young people participate in product fundraising programs each year. Recent research found 75 percent of Americans -- and eight out of 10 parents -- purchase fundraising products each year. The vast majority of fundraising sales are made to family and friends. (NOTE: Fundraising companies sponsoring organizations emphasize that children should not be allowed to sell door-to-door unless directly supervised by a parent or adult.) Americans agree that product fundraising is an important resource for today's youth. More than just raising money to pay for valuable programs, a well-run fundraising drive also can be an experience that educates, builds self-esteem, provides community service, and promotes school, organization and community spirit. Not very long ago, conducting a campaign to raise money was intimidating for most non-profit organizations and their volunteers. Campaigns were time-consuming and difficult to coordinate with a limited guarantee of success. Today, there are hundreds of fundraising products and programs available that maximize an organization's financial return and minimize the time investment for volunteers and advisors. Better still, many products and programs have been tested over time and are reasonably guaranteed to succeed. Behind these successful fundraising programs are professionals in product fundraising -- companies that experienced fundraising organizations have come to rely on as partners in meeting their financial goals. There are some 1,500 fundraising companies operating in the United States and Canada. Most are local independent small business owners, mid-size companies with small sales forces or larger regional and national companies with local sales representatives. These companies work directly with schools, PTAs, booster clubs, church groups, scouting groups and other not-for-profit organizations to help them raise funds. Many have been in business for decades. They supply products and a variety of valuable services -- including sound advice on all the facets of fundraising. As the product fundraising industry matures and more fundraising products, programs and services are introduced, fundraising sponsors have more decisions to make. First one must understand and follow any special guidelines for fundraising that have been established by the school or community. Then, one must decide which company will best meet the needs of the school? What product(s) will work best as a fundraiser? Volunteer safety should always be top priority. The following overview of product fundraising will provide a road map for non-profit organizations involved in selecting and conducting a product fundraising program.   Finding A Professional Fundraising Company Selecting the right fundraising company is a critical step toward your program's success. In some areas, dozens of companies offer fundraising products and services. Though the competition may create certain advantages for the fundraising organizer, it also increases the need to completely evaluate a company before choosing a program. It is a good idea to pare the list of candidates down to two or three companies before scheduling appointments to allow ample time for thorough interviews. A critical consideration when evaluating a company is service. Let the company explain what they will do to make your fundraiser a success and, importantly, make your job easier. Allow them to demonstrate their expertise and professionalism. To help you and the company determine whether or not your group requires a full-service program, know up front your financial goals. The company will also want to know the age and number of your volunteer force. Armed with answers to the following questions, fundraising sponsors can make solid decisions for their group: How long has the company (and the company's representative) been in the product fundraising business? The size of the company and the mechanics of the program are less important than the company's financial stability, experience and reputation. What value-added services does the company offer; and how much do these services cost? (e.g., assistance to volunteers, communicating with parents) Is volunteer safety a key element of the program? Does the company discourage unsupervised door-to-door sales? Will children be encouraged to focus their efforts on family and friends? Will adult supervision be stressed? How will these points be communicated to children? Parents? How will the company tailor the program to fit your organization's particular needs or requirements? Are teachers encouraged to take advantage of the educational elements (e.g., oral presentation, math, and marketing skills) of the fundraising program? If so, how? Does the company understand and comply with your state sales and use tax laws and how these laws impact your program? What is the company's order turn around time? How are products shipped and how will it impact delivery logistics? How responsive will the company/representative be should problems arise? What is the company's policy if your group receives damaged products? Are returns accepted? How does the company handle back orders? Ask for and check references (e.g., other groups, parents, school administrators). Find out if the company delivered on promises. Did they meet, exceed or fall short of expectations? The personal relationship between the organizer and the company is critical. Because the organization's reputation is at stake, fundraising coordinators must be able to completely trust the company and know that it will operate with integrity and high ethical standards. Also important is how the volunteers perceive the company and its representative. Is the representative sincere? Does he or she take a personal interest in the group's goals and concerns? Does the person really believe in the products and services offered? Volunteers will respond best to individuals they trust, admire and respect.   Choosing The Best Program There are a number of fundraising programs on the market today. They vary not only in the products offered, but also in how they are sold, packed, delivered and distributed. Groups can order products and programs through sales people who represent national or regional companies; local fundraising companies who market exclusively in a particular area or region; or from direct mail catalogs. There is no single preferred source for, or type of, fundraising program. Often, it is the fundraising coordinator's experience and resources that determine what programs are most appropriate. There are two primary types of programs - order takers and direct sales. Consider the features of each program and choose the one that best meets the needs of your organization. Direct Sales Direct sales programs generally involve the following: schools or groups order an inventory of products; products are distributed to volunteers who sell products directly to the consumer; funds are collected at the point of sale; schools or groups pay for products sold. Features: Requires only one contact with individual consumers; Programs are generally shorter in length (an important consideration if funds are needed quickly); Consumers can examine the actual product(s) before making a decision. Order Takers Generally, order taker programs involve the following: consumers select products from a brochure; volunteers record the order on an order form; all order forms are returned together to the fundraising company; the company fills the orders and ships products to the school or organization; products are distributed; volunteers who deliver products to the consumer. Funds may be collected at the time of selection or upon delivery of the product to the consumer. In some instances, sellers carry a "sample kit" which includes samples of products shown in the order taker brochure. Other mechanics of order taker programs can vary widely. Some programs require the school or organizations to tally orders, calculate collections and sort merchandise upon delivery. Also, the cost of programs may include computerized tallying and delivery of products that are pre-sorted and custom-packed. Features: No guesswork on how much product to order; Brochures allow the group to offer a wide variety of products and range of prices; Convenient format to include parents and adults in fundraising efforts; A successful formula for offering a wide range of products and price levels.   Selecting The Right Products Perhaps the most basic question a non-profit group must answer is, "What are we going to sell?" There are virtually thousands of products available for fundraising programs. These can range from items such as candy, cookies and other edibles, to wrapping paper, magazines and a wide range of gifts and novelties. The first - and most important - step when narrowing down the product choices is to insist on high-quality merchandise. Generally, consumers are willing to purchase a product to help support a worthy cause; however, most do not want to pay for inferior or significantly overpriced products. Also, most fundraisers are annual or semiannual events, and success depends on repeat sales. Nothing builds loyalty and profits like a reputation for offering top-quality fundraising products. Be careful when choosing a product only because it is "new" or "hot." Although new or unusual products can generate a lot of excitement for your program, and may indeed be successful fundraisers, they do not have the track record to compare with more traditional items. Depending on the fundraising goal of the organization, sometimes it makes more sense to sell products that are proven "winners." Look, taste and touch. Although it is not always possible, the best way to establish product quality is to see a sample. If sampling is not possible, scrutinize catalogs and brochures carefully and ask questions before you order the product(s). When reviewing retail prices for the product(s), consider the income level of the community where the sale will take place. Matching prices with what the people in your area can reasonably afford will give your program its best chance for success. Make sure the retail price of the product represents a fair market value. An experienced, professional fundraising company can provide valuable advice on the product or products that will work best for your group and your area. The following is a representative list of the thousands of different foods, gifts and novelty items displayed at the Association of Fund-Raising Distributors & Suppliers Trade Show and Convention. This is the largest professional trade show in the world devoted exclusively to product fundraising with fundraising companies traveling from across the United States and Canada, and as far away as Australia to attend. Popular Fundraising Products Books Calendars Candy and confections Cassette tapes and compact discs Ceramics Cheese and cheese spreads Clothing and accessories Coffee Cookies Coupon books, gift checks Custom printed (coffee mugs, sports bottles, cushions, etc). Desk accessories Donation cards and programs Edible items in decorative tins Fresh and dried fruit Frozen entrees Gift wrap Gourmet food items Greeting cards Holiday ornaments and novelties Household items Jewelry Long-distance telephone service Magazine subscriptions Meat snacks and other products Nuts Picture frames Pies and other baked goods Plants and flowers Popcorn, pretzels, other snack foods Posters Preserves, mustards, condiments Safety and first aid kits Sauces Soap products Spices Sports pennants, cards, novelties Stationery Sundries Sweatshirts and T-shirts Toys Window and wall decorations Wild bird food   Reaching Financial Goals Identifying needs and setting financial goals are vital first steps in conducting a successful fundraising campaign. With a clear understanding of how much money is needed and how it will be spent, volunteers will be motivated and focused. Clearly stated financial goals also will give a fundraising program a benchmark for success. Too often, fundraising coordinators equate financial success with the percentage of gross sales that their group will keep. While the percent of sales is important, there are many other factors that should be considered at the same time. For example, one company may offer the group 50 percent of sales, compared to another offering only 40 percent. The "40% company" may be providing valuable services (e.g., incentive programs, consulting, kickoffs, timely delivery of merchandise, custom packing for individual orders) that save volunteer time or increase sales. The company offering the lower percentage may also have a product so superior in quality that the increased sales volume will net more money for the group. It may be better to choose a program that offers a smaller percentage if the added value of the overall program (including services) will more effectively achieve your goal. Remember: percentage does not translate into profits. If a company is offering a smaller percentage of the sales, find out why. Among the services available to the organization eager to reach their financial goal, is the option to include an award or "incentive" program. Although the organization's goal is incentive enough for some volunteers, often prize and award programs can be a valuable addition to the fundraising program (including significantly higher profits). The best incentives will increase participation and, therefore, profits for the organization. They add fun and excitement and will involve as many volunteers as possible. Awards can be based on the size of the sale (e.g., volunteers who sell one-to-five items might choose prizes from category A, while volunteers who sell six-to-ten items would choose from category B, etc.). Or it may be as simple as a "thank you" gift for taking brochures home. Before selecting an incentive program, take into consideration the age of volunteers and the overall goals of the program. Be clear up front on costs that may be incurred for the prize program — sometimes there is a separate cost for the prizes; sometimes the cost is built into the percentage going to the fundraising company.   Tips For Fundraising Success From the Association of Fund-Raising Distributors & Suppliers: Establish a clear financial goal before evaluating products, programs, etc. -- knowing how much money you need to raise will help make these decisions easier. Don't let your organization's profits be eaten away by "hidden" costs (e.g. for freight, prizes, overruns) -- ask questions ahead of time and make the necessary adjustments. Select your fundraising program early to assure ample time for planning. If the school or community has a planning calendar, be sure your event is included. Stagger fundraising activities to avoid competing with other groups. Set a specific beginning and ending date for your fundraiser and stick to it -- without a clear target date the campaign will drag on, often without direction. Avoid "fundraising fatigue" among parents and volunteers by conducting fewer programs that are more effective individually. Rely on your product fundraising company professional for suggestions and advice. Don't let your program fizzle -- some organizers will lose interest once a program begins; stay motivated until the end to assure success. Put a time limit on order-taking. Usually 10-14 days is more than enough. Keep energy levels high by communicating before, during and after the program -- remind parents, teachers and other volunteers of the fundraiser's goals and deadlines, provide frequent status reports and updates. Avoid shipping and ordering problems by working closely with volunteers to assure that all order forms are legible and filled out completely. Keep copies of all forms turned in by volunteers before sending them to the fundraising company. Assure efficient handling of products by recruiting adult volunteers ahead of time to help distribute the products to volunteers. Double check the products shipped to your organization against the order forms; check each box or bag for damaged or missing merchandise before sending volunteers out for delivery. Don't forget to communicate with absentees who miss the program's kick-off or other important meetings. Have fun! With the right approach, fundraising can be educational and enjoyable for everyone. What is AFRDS The Association of Fund-Raising Distributors & Suppliers (AFRDS) is the only professional association devoted exclusively to the product fundraising industry. Framers of the industry’s first and only Code of Ethics and Standards for Professional Practice in product fundraising. AFRDS and its more than 650 member companies are dedicated to promoting professionalism and integrity in product fundraising. To stay current on the latest products, programs, innovations and techniques, AFRDS members attend association-sponsored seminars and workshops. AFRDS members are product fundraising industry’s top professionals.   This has been reviewed and approved by the: National Association of Elementary School Principals, National Association of Secondary School Principals, National Association of Student Activity Advisors and the National Catholic Educational Association.