What is fundraising through the sale of products?
Fundraising through product sales seems simple on the surface. Your organization sells a product such as candy, donuts, or magazines, and keeps a portion of the proceeds. However, this type of fundraising can be as successful as the Girl Scouts’ annual cookie sale; or it can leave the organization and its volunteers weary and wondering if it was worth the effort.
What do you need to be successful at fundraising by selling products?
* enthusiastic volunteers to fundraise with your products
* outstanding products that will result in outstanding fundraising results, and
* superb fundraising coordination, from order taking to delivery.
What should I consider when choosing a fundraising company and fundraising product?
- Be sure that product fundraising is compatible with your organization’s mission. Product fundraising seems to go well with youth organizations, but not so well with social service or human rights nonprofits.
- If you have not done product fundraising before, ask your volunteers, board members and supporters if product-based fundraising is acceptable. If you serve youth, ask the parents if they are willing for their children fundraise by selling a product. If your potential fundraising sales force is not enthusiastic, you will not be successful with fundraising through product sales.
- Look around your community. Is your area saturated with nonprofit fundraising through product sales?
- Make sure that your fundraising product is of the highest quality, and is something that people really like and use. If the product is something your potential customer would buy anyway, he/she is more likely to buy it from you. On the other hand, if similar products are easily available at retail stores, this may negatively affect your sales.
- Is the fundraising product easy to deliver? Does it need refrigeration or other special handling?
- What is the commission on the fundraising product you are considering? Commissions vary from 25% to 75%. Commissions of 50% or more are preferable, especially if you use a lot of volunteers and expend a lot of energy on the sale.
How do I pick a fundraising company?
Consider these attributes of any fundraising company:
- What is the quality of the fundraising products?
- How long has this fundraising company been in business? What is its reputation in the fundraising community?
- Does the fundraising company have good customer service?
- Does the fundraising company provide attractive and useful marketing materials? Are these materials free?
- Does the fundraising company have clear, written policies and procedures?
- What are the fundraising company’s refund and return policies?
- How timely are the fundraising company’s shipments of orders?
Do we have to collect sales taxes on our fundraising product sales or pay income tax on our profits?
Generally, if your organization is exempt from federal and state taxes, you will not have to collect sales tax on the sale of your fundraising products. Call Attorney Karmen A. Booker
Attorney Karmen A. Booker has developed an E-book called “Fundraising for Nonprofits ”. It provides Fundraising Tips that include but are not limited to
- Developing a Fundraising Plan
- Writing a Fundraising Letter
- Over 15 Specific Fundraising Projects, and more.
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