Fund-raising: A beginner’s guide – Statistical Data Included
Nowell C. Wisch
With “School Daze” in full bloom, the annual fund-raising season has begun. Elementary, middle and high schools abound with sales opportunities.
Everywhere you turn, a group needs money to buy uniforms, take trips or pay for graduation projects. These groups raise money by selling things and keeping the profit. Most fund-raisers are product-driven selling events and PPDs provide lots of product. Most PPDs, however, are unprepared to take advantage of fund-raising opportunities as they occur.
The professional fund-raising business, like our industry, runs the gamut from mom & pop companies to corporate players. These fund-raising companies take on the entire sourcing and fulfillment obligation for the customer, along with the performance risk. Also, like PPDs, fund-raisers are always searching for something ‘NEW!” because their customers have seen it all.
All fund-raising sales revolve around three key issues. These are:
[1.] The profit percentage: [“How much do we make?”]
[2.] The order and fulfillment system: [“How much work do we have to do to get what we make?”]
[3.] The product: [“What do we have to peddle to make what we make?”]
Profit: “How much do we make?”
“Greed” is the operative word in every fund-raising sale. All fund-raising sales start with greed. “I NEED MONEY!” In fund-raising, as in all commercial life, money comes from profit. Most fundraisers offer a 50 to 60 percent margin, depending upon the product. It is easier to offer a larger margin on inexpensive products where volume selling is the key. Product choices must consider the size of the selling force (the group), the size of the market (the audience) and the selling price of the product.
A group that needs new music stands that cost $5,000 will have to sell enough products to net $5,000 from the fundraiser. It does not matter how the $5,000 is derived. They can work to sell one item for $10,000 dollars or they can sell 10,000 items at $1 at a 50 percent margin and achieve the goal.
If the group lives in a town of 8,000 people, 10,000 items may be difficult to peddle, however. Wearables can be great fund-raising products because they can generate an acceptable profit margin and still offer good value.
The System: “How much work do we have to do to get what we make?
Volunteers, moms and dads who have jobs, family responsibilities and lives that are unrelated to the fund-raising task do most fund-raising. Even the simplest fund-raising sale involves an extraordinary amount of work for the group. Since most fund-raising volunteers only do it once, (“No, I’ve learned my lesson, thank you!”) professional fund-raisers take as much of the burden upon their systems as possible. In fact, part of the attraction of the business is that you get unpaid labor to help you make your buck! The better organized you are, the better you will do.
Large fund-raising companies have complete systems that help the volunteers organize, conduct and administer the sale. From money collection envelopes to forms that help them organize and allocate resources, they have done the work for every part of the sale. Some “all school” sales may involve several hundred students and 50 or more parents and volunteers. For people unused to managing more than a household, it can be a daunting task. Everything the distributor can do to ease the pain will be appreciated. Often, a simple, single product fund-raising sale can make things very easy. This is part of the attraction candy bars offer. You buy a case and you sell the case. It is very easy.
Product: “What do we have to peddle to make what we make?”
While the overwhelming winner in fund-raising product sales is candy, other products make fine fund-raising items. Products such as World’s Finest, Nestles and Hershey chocolate bars have raised more money for groups than any other type of product, but clever PPDs have had success selling other products in the fundraising arena. One distributor has been very successful with wearables in local high schools by helping clubs and small groups raise money. Pie provides limited edition T-shirts and caps. The groups sell them before they place the order and he produces exact quantities. There is nothng left over. Because he works with local sources, turnaround times average 10 days from order to delivery. Plus, there is no receivable risk because the group and the distributor get their money up front.
Another distributor has been very successful with high school sports teams by creating custom pins at the beginning of each season. She provides them to the booster club, which in turn sells them at every game. The sales have raised as much as $2,000 a year for team uniforms and expenses. The distributor has also sold the booster club pennants, stadium cups, #1 foam fingers, and seat cushions. She said, “The key to the sale is to source the product and tell the group how to sell it and how much the retail should be. I try to find items that they can make 40- to 50-percent margins and are no-brainers for the kids to sell.”
Competition is fierce
The going is never easy in a fund-raising sale. For the big sales, a PPD is facing competition from people who have been doing this for a long time.
Professional fund-raising companies offer a soup to dessert solution. They are skilled sellers and are motivated by very high commission potential. Parent groups can be difficult to sell and close. Even though professional fund-raisers are used to selling them and understand their “hot buttons,” PPDs often are friends or acquaintances with organizers and fundraising, like every other sale, often turns on a relationship.
The most important thing that a professional brings to the table, however, is that they understand the selling path. They are dispassionate about using children as salespeople. In most fund-raising, children are the path to riches. Because of this, all fund-raising projects operate under a Catch 22. We do not want to exploit our children but to be successful we have to exploit children.
Professionals operate on a “just get it home” philosophy. Children should not be put in jeopardy with door-to-door selling so the goal is to get the sales literature home to the parent. Getting the parent to sell (or buy) the product is the key to success. Children don’t have money but they do have big eyes. Parents will part with a few hard-earned dollars to appease their children and help with a project, so, just get it home.
If you have children in school, get into the club and organization advisor’s office as soon as you can and find out what they have planned for the year.
Fund-raising takes place the year around. If you miss the fall season, don’t wait for spring. Start prospecting right now for the spring season. It is never too early to start looking for fund-raising business.
Often, needs arise that the professionals cannot take advantage of because they do not, as a rule, react quickly, as PPDs can. Groups that win contests need funds right now to pay for transportation and lodging. A fast program with a desirable product will generate the funds necessary. That is when you, a PPD, can save the day!
Nowell C. Wisch is the Editor-at-Large for Wearables Business and a nearly 25-year veteran of the promotional products industry.
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