Ten FAQ's about Product Fundraising

WHAT IS PRODUCT FUNDRAISING ?
WHY IS PRODUCT FUNDRAISING EFFECTIVE?
HOW CAN WE PREVENT OUR PARENTS AND OTHER SUPPORTERS FROM BURNING OUT ON FUNDRAISING?
WHAT PERCENT OF FUNDRAISING SALES SHOULD ORGANIZATIONS RECEIVE?
ARE INCENTIVE PROGRAMS ESSENTIAL FOR MOTIVATING VOLUNTEERS? WHAT'S APPROPRIATE?
DOES A PRODUCT FUNDRAISING SALE REQUIRE "DOOR-TO-DOOR" SOLICITATION?
IS IT APPROPRIATE FOR CHILDREN TO PARTICIPATE?
WHO ARE PRODUCT FUNDRAISERS?
WHY SHOULD COMPANIES BENEFIT FROM FUNDRAISING EFFORTS?
WHAT IS THE ASSOCIATION OF FUND-RAISING DISTRIBUTORS AND SUPPLIERS?

Evaluating Fundraising Companies: Four Key Areas to Cover

IS THE COMPANY OFFERING A HIGH CALIBER, PROFESSIONAL PROGRAM?
HOW WILL THE COMPANY'S PROGRAM MEET THE FUNDRAISING GOALS OF YOUR GROUP?
DOES THE PROGRAM INCLUDE STRAIGHTFORWARD LOGISTICS?
DOES THE COMPANY HAVE A STRONG TRACK RECORD?
SPECIAL ONLINE CONSIDERATIONS

Ten FAQ's about Product Fundraising

WHAT IS PRODUCT FUNDRAISING ?

Schools, school groups and other small non-profit organizations find many creative ways to raise funds -- from bake sales, spaghetti dinners, auctions and school carnivals to more aggressive advertising, affinity programs, grant writing and straightforward donation requests. But few fundraisers are more reliable for reaching specific fundraising goals than a good product sale.

Product fundraising has been around for over a century. It typically involves the purchase and re-sale of popular consumer products by a non-profit group whereupon the group sponsoring the sale keeps a portion of the gross sales. Products can be purchased in bulk and paid for in advance by the organization, then re-sold to supporters. Volunteers may order products using catalogues and other methods. Supporters pay for the product when the order is placed or upon final delivery.

WHY IS PRODUCT FUNDRAISING EFFECTIVE?

Product fundraising usually involves a professional fundraising company - and often a sales representative - which serves as liaison between the product supplier and volunteers responsible for the fundraising drive. These companies provide advice, trouble-shooting, support, products, guidance and other valuable services that can reduce volunteer time and energy and maximize sales. Special events and other "do-it-yourself" fundraising methods are more labor-intensive and frequently yield smaller results. Product sales work because results are fast and people like buying products for a worthy cause. Last year, non-profit groups netted approximately $2 billion by selling products.

HOW CAN WE PREVENT OUR PARENTS AND OTHER SUPPORTERS FROM BURNING OUT ON FUNDRAISING?

Three simple suggestions: 1) Set clear goals and firm deadlines. Communicate fundraising goals and important dates often to parents and teachers, along with frequent progress reports. 2) Do a few and do them well. When it comes to fundraising, less is more. Don't make constant pleas just for the sake of fundraising. Communicate early on your goals and fundraising plans for the year. Families are more supportive if they understand and support one or two tangible goals. 3) Know what others are doing. Share dates and other important info with other fund-raising groups in the community to avoid duplicating efforts. See Edge articles on Fundraising Fatigue and Avoiding Burnout.


WHAT PERCENT OF FUNDRAISING SALES SHOULD ORGANIZATIONS RECEIVE?

Percentages of sales offered to non-profit groups vary widely depending on the type of products being sold and the services offered by the fundraising company. Too often, fundraising coordinators equate financial success directly with the percentage of gross sales that their group will keep. Rather, volunteers should be focused on how the combination of product quality, company services and percent of profit to be received will all work together to help the organization meet its total fundraising goal. See Fundraising Fundamentals section Reaching Financial Goals and Edge article on Percentage Profit.

ARE INCENTIVE PROGRAMS ESSENTIAL FOR MOTIVATING VOLUNTEERS? WHAT'S APPROPRIATE?

Organizations eager to reach their goal often add an "incentive program" to their fundraising effort. Although the goal itself is motivation enough for some volunteers, prize or award programs can contribute significantly to the success of a program. Incentive programs are designed to encourage and reward participation and add an element of fun, encouraging broad participation of volunteers so that the burden of meeting the organization's goal does not fall to a dedicated few. Indeed, the majority of fundraising prizes actually distributed today are simple tokens (stickers, pencils) to recognize participation.

It is important that school administrators and parent groups work closely with fundraising companies to ensure incentive programs are appropriate for their students. As stated in AFRDS Standards for Professional Practice, companies should be sensitive to the potential negative impact of placing undue emphasis on sales incentives. See Edge articles appropriate award systems and how to select incentives.

DOES A PRODUCT FUNDRAISING SALE REQUIRE "DOOR-TO-DOOR" SOLICITATION?

For some people, product fundraising has mistakenly become synonymous with the term "door-to-door sales." In fact, most product fundraising sales are made to parents, family members, friends and close neighbors. A successful product fundraising drive does not require volunteers - young or old - to canvass neighborhoods. Parents are very involved with these programs, often soliciting support from co-workers. See Edge article on Child Safety.

IS IT APPROPRIATE FOR CHILDREN TO PARTICIPATE?

School fundraising drives are often a child's first taste of volunteer service. If presented and supervised properly by a parent, coach or teacher, a fundraising project to support school or extra-curricular activities can build a child's confidence, self-esteem, sense of responsibility, good manners, planning and budgeting skills, to name a few.

However, children, should never be allowed to sell door-to-door unless directly supervised by a parent or responsible adult. According to the Association of Fund-Raising Distributors and Suppliers, fundraising companies, school and organization leaders and parents must be diligent in assuring that children participate in fundraisers in a safe manner. See Edge article on Child Involvement.

WHO ARE PRODUCT FUNDRAISERS?

Product fundraisers are companies that provide products and services to schools, parent-teacher organizations, booster clubs, church groups, youth sports leagues, scouting groups and other non-profit organizations to assist them in their fundraising programs. These companies have the knowledge and expertise to help groups select safe, effective approaches to fundraising. There are large national companies that specialize in fundraising as well as many smaller, family owned businesses that collectively employ thousands of men and women who justifiably take great pride in helping schools and other organizations raise money. Product fundraisers are also sometimes referred to as fundraising distributors.

WHY SHOULD COMPANIES BENEFIT FROM FUNDRAISING EFFORTS?

Fundraising companies provide products and services to help schools and non-profit groups. Like all other services schools may utilize, professional fundraising services do come with a price. But the rewards of a good relationship with a fundraising company are well worth the investment. The portion of the gross proceeds that go to the fundraiser cover the company's costs of doing business, including: 1) the cost of the products and other materials (e.g. brochures, order forms, parent letters); 2) the costs associated with services such as stocking and handling inventory, packing, shipping and troubleshooting; and 3) a fair profit so that the company can provide service year after year.

WHAT IS THE ASSOCIATION OF FUND-RAISING DISTRIBUTORS AND SUPPLIERS?

The Association of Fund-Raising Distributors and Suppliers is an international association of more than 600 companies that provide products and services to non-profit organizations to assist in fundraising programs. AFRDS and its members are dedicated to promoting professionalism and integrity in product fundraising. The group established the industry's first and only Code of Ethics and Standards for Professional Practice in product fundraising.

Evaluating Fundraising Companies: Four Key Areas to Cover

Choosing a fundraising company is much like choosing a business partner or hiring a new employee. It's important to work with a company that can be trusted - and who can deliver. When interviewing fundraising companies, non-profit groups should prepare a list of key questions. Download a copy of AFRDS Fundraising Checklist for a comprehensive list of questions.

IS THE COMPANY OFFERING A HIGH CALIBER, PROFESSIONAL PROGRAM?

Are the products high in quality and something the organization can be proud to stand behind? How is safety addressed? Does the company discourage unsupervised door-to-door sales? Will adult supervision be stressed? How will these points be communicated to volunteers? What promotional materials and/or incentive programs will the company provide? Are the materials appropriate and good in quality?

HOW WILL THE COMPANY'S PROGRAM MEET THE FUNDRAISING GOALS OF YOUR GROUP?

How will the company's program meet the fundraising goals of your group? What time and energy saving services (tallying, individual student and/or classroom packing, etc.) does the company offer and how much will these services cost? Rather than focus on percent of profit your group receives, ask what real dollars a group similar to yours in size and scope can expect to raise? Does the retail price of the products represent a fair market value? Will there be a written agreement?

DOES THE PROGRAM INCLUDE STRAIGHTFORWARD LOGISTICS?

How will the program work? Are products paid for in advance or upon delivery? Will the company provide volunteers with easy-to-understand, comprehensive guidelines for record keeping? Does the company understand and comply with your state's sales tax laws? How are products shipped and when? Who pays the freight? What is the policy on damaged or unsold products? Will out-of-stock items be back-ordered or will substitutions be provided? How quickly will the group be notified if there is a problem and given a plan for how the problem will be resolved?

DOES THE COMPANY HAVE A STRONG TRACK RECORD?

How long has the company and the individual representative been in the product fundraising business? How quickly will you be able to reach the company or individual representative should the need arise? How good has their program worked for other groups similar in size? Can the company/representative provide references? (Ask references if the company met fundraising goals? Was the representative responsive? Would the group work with this company again? ) Is the company a member of the Association of Fund-Raising Distributors & Suppliers? And does it follow the industry's Code of Ethics and Standards for Professional Practice established by the Association?

Most online fundraising programs are designed as online "store-fronts or shopping malls" offering rebates based on a percentage of the purchase back to non-profit groups designated by the online shopper. When considering an alliance with an online fund-raising company, apply the same rigorous research as you would a traditional fund-raising company. In addition, experts suggest:

SPECIAL ONLINE CONSIDERATIONS

• Clarify the percentage of the rebate being offered. If the company offers 70%, does that actually mean 70% of the 5% rebate provided by the retailer? Also, different retailers on a given site often offer different percentages and these percentages may change as traffic increases.

• Ask about residual income. Will your group receive rebates from purchases made by repeat customers?

• How often are payments made? Find out if there is a minimum amount of money that must be reached before the company issues a check. How are returns handled?

• Is the company's web site and technology easy for supporters to navigate and make purchases?

• What's the company's privacy policy? Will their names and personal data be sold to others? Most electronic commerce sites display their privacy policies. If there is no formal policy, it's safe to assume the company is willing to sell its database.

• How much marketing support will the company provide? Some have customer service representatives who can provide help by phone, e-mail or in-person. Many offer printed materials to help promote the fundraiser. 

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