Purchase-triggered fundraisers - sometimes called percentage-of-sale fundraisers or "buy to donate" programs - with businesses are one of the more common and lucrative types of fundraisers. You'll see plenty of these fundraisers next month during Breast Cancer Awareness Month.
During Pinktober, some of the largest companies in the United States donate to breast cancer charities when consumers purchase specially marked products. The percentage or portion of sales donated to charity varies by company and promotion, but the dollars can really add up.
While McDonald’s donates just a penny from the sale of each Happy Meal, it raises millions of dollars for the Ronald McDonald House Charities, an independent nonprofit organization that provides a homelike environment for families with critically ill or injured children who must travel to receive health care.
With over 34,000 locations worldwide, McDonald’s sells a lot of Happy Meals! Your business partner may not span the globe like McDonald’s does, but a well-executed purchase-triggered fundraiser of just about any size will make you smile.
How The Fundraiser Works
1. Working with your business partner, identify a product or service from which you’ll receive a percentage or portion of sales.
2. Determine the percentage or portion you’ll receive and for how long. It’s also smart to set a maximum donation. For example, a local salon agrees to donate $5 (up to a total donation of $500) from each haircut for the next three Saturdays.
3. Decide how much and for how long. It's also smart to set a maximum donation. For example, a local salon will donate $5 (up to a total donation of $500) from each haircut for the next three Saturdays. Set an end date for the program and another date for when you can expect an accounting of donations and a check from the business owner.
Things You Need to Know
Choose a popular product or service. It should be one of the business’s signature offerings. Every business knows what does and doesn’t sell. Make sure you’re getting a percentage from what does.
Take accounting seriously. The business is responsible for tracking the sale from which you’ll receive a percentage. Depending on the business, you can ask for reports and spreadsheets of sales activity. With most small businesses, however, you’ll have to trust the business owner and take his word for it.
Cap your donation at a specific amount. Working with your business partner you can choose a total donation that is fair and generous. For example, during October, a bakery may agree to donate 50 cents from the sale of each blueberry muffin—a customer favorite—to a maximum donation of $250.
Set a minimum donation. Many businesses will agree to a minimum donation in case the percentage offered is too low or the product or service doesn’t sell as expected. Our baker in the preceding point, for instance, may agree to donate $200 regardless of how many muffins are sold.
Communicate with stakeholders. Be clear to customers and supporters on how much will be donated from each sale, and who will get the money. How much of a portion of the purchase price will be donated?
Evaluate your efforts. After the program, carefully review the results with your business partner. Did customers respond favorably to it? Did the business owner notice an uptick in business because of it? Was the dollar amount too low? Do you need to adjust the percentage received from each sale, or increase the maximum donation?
Make a Commitment to Transparency
The fact that Breast Cancer Awareness Month is the most popular time of year for purchase-triggered fundraisers makes it a lightning rod for critics that complain that these programs aren’t transparent enough for consumers.
In the fall of 2011, the New York Attorney General issued guidelines entitled Five Best Practices for Transparent Cause Marketing [aka Fundraising with businesses]. The practices include:
Clearly describe the promotion. Explain which charity is benefiting from the program, how much they will receive, what consumers must do to trigger the donation and the minimum donation, if there is one. You should also include a start and end date for the promotion.
Be open about how much is being donated. The guideines suggest a donation label with this information.
Tell people what they need to know. Is the company making a flat donation instead of a donation for each sale? Does the campaign have a cap, a maximum the business will donate?
There are no exceptions. Transparency should extend to any online fundraising promotions as well. Tradi- tional and digital campaigns should be equally transparent.
Tell the public how much was raised. With all the digital tools we have access to these days, trying isn’t good enough. Use offline and online media to let people know how much each fundraiser raised.
Following these guidelines will ensure that consumers stay focused on raising money for your organization, instead of raising questions about the legitimacy of your efforts.
Try These Ideas
Use your imagination! You can create a percentage-of-sale program with anything. I’ve seen the program done with donuts, massages, and even rented spaces in a parking garage. Use your imagination and let your partner’s generosity be your guide. Contemporary dance company Trey McIntyre Project partnered with a Boise-based tavern to raise funds from drinks named after dancers in the company. Get creative!
Don't make the program overly complicated. When consumers are searching for products or services you only have a few seconds to connect with them. If they don’t quickly understand the offer and how they can help, they’ll most likely pass on it.
5 Examples of Purchase-Triggered Donations (See More Here)
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