Save the Children hired three marketing and sales professionals and struck 23 licensing deals in little more than a year. God’s Love We Deliver, a New York City group that feeds homebound AIDS patients, brought in a consultant to revamp its catalogue business.
‘Tis the season for gift-giving and profit-making in America, and increasingly, charities are hoping for a bigger piece of the sales pie.
Once content with selling a few crafts or holiday cards, charities are aggressively striving to augment their tight budgets with profits from mail-order businesses, shops and licensing agreements - sometimes year-round.
Yet as they grow more professional, they struggle to balance heir nonprofit missions with the demands of surviving in the for-profit world.
“It’s a fine line we’re all walking. We need to be self-sustaining and also do our mission,” said Toby Sherman, managing director of a Ben & Jerry’s franchise run by Common Ground Community.
Common Ground, a New York City nonprofit, went into the ice cream business not only to make money, but to provide job training for the formerly homeless and other people it helps. So, Sherman can’t just fire her workers when ice cream sales go cold in the winter.
“It’s a rough road,” lamented Sherman, who left a retail consulting position at Ben & Jerry’s six months ago to run the shop and two more the charity plans to open in the next two years.
Despite the challenges, more charities are moving into retail as they struggle for funds. With the robust economy and booming stock market, overall charitable giving rose 7 percent to $150.7 billion last year, the American Association of Fund-Raising Council said.
Yet the number of households giving to charities slipped - to 69 percent in 1995 from 73 percent two years before, according to Independent Sector, a research group. At the same time, the number of nonprofits grew and government funds - for charities and individuals - shrunk.
The Southwest Indian Foundation in Gallup, N.M., helped provide food and clothing to about 3,000 families this year, a 50 percent increase from last year, said executive director Bill McCarthy. That increase, largely due to welfare cuts, places more pressure on the group to earn money through its catalogue of crafts, toys and jewelry.
Amid such uncertainties, retail sales allow nonprofits to develop an extra source of income they can count on, said Mac McCabe, a Portland, Maine-based consultant who helped God’s Love We Deliver improve its catalogue last year.
Consumers, moreover, are increasingly eager to buy charitable goods. When price and quality are equal, 76 percent of consumers would switch to a product associated with a good cause, up from 66 percent in 1993, according to a Cone-Roper poll of 2,000 adults.
While God’s Love We Deliver has expanded its retail operation over the past several years, it keeps a tight lid on the business, and has no plans to turn the venture into a year-round operation.
“We’re here to feed people,” said Susan McGowan, associate director of development.
Save the Children, the international children’s relief organization, has taken a more aggressive approach to marketing. Along with expanding its marketing department from one employee to four, it has struck 23 of its 35 licensing deals since 1996.
Yet the group has limits. “We do Dixie cups and we’re hoping to do paper towels,” said Tony Reed, a retail veteran recruited by the charity as its new director of licensing. “But we wouldn’t do toilet paper. We try to keep in on a higher plane, so to speak.”