Cause Marketing Mailbag: February 2008
Q. I’m curious to hear your opinion on the benefits/setbacks of campaigns that ask customers to consider giving an additional dollar or two in comparison to those that simply go ahead and deduct a certain portion. For example, UNICEF's Tap Project vs. Starbucks’ Leprechaun Latte. I imagine they have similar publicity but with the option to, well, opt out, I wonder if the potential dollars raised take a hit? Ashley
A. It's a good question, Ashley. While it's great to lock in a donation like every Leprechaun Latte does, in general you'll make a lot more money asking customers for a donation. Just compare the results of the two programs. In just its first year, The Tap Project raised around $100,000 thanks to waiters pitching diners while Starbucks' Leprechaun Latte has raised $25,000 annually. Focusing on programs that target customers at the register is especially important for smaller nonprofits. If a retailer agrees to give you a percentage of sale from just one product your fundraising potential is pretty limited. Now, if that same store has a decent amount of foot traffic and cashiers ask customers to donate a buck, you'll raise a lot more.
For example, three years ago when Valvoline Instant Oil Change agreed to sell our Halloween Town mobile, their 40 locations were only seeing around 60 customers a day. This is great traffic for oil changes, but it's not like the foot traffic that say a supermarket has. But by launching an aggressive point-of-sale program that had cashiers asking every customer to buy a mobile for $3, we raised nearly $30,000. We never would have made that much from a percentage of sale program on oil changes. Besides, most companies are unwilling to deduct the donation from their bottom-line. Let's face it: that's why Starbucks only donates a quarter. It's better for the charity if the store passes along the donation to the customer as an additional charge.
Of course, if you're a national charity working with a national company, twenty five cents from each sale adds up fast (Yes, Starbucks is an international company but they only sell the Leprechaun Latte in New England. Imagine if they sold it everywhere!). Charities like Product (RED) and Komen raise tens of millions from percentage-of-sale programs with vacuum cleaners, ipods, sneakers, sunglasses and dozens of other products.
Another good reason to choose a point-of-sale program (Tap) over percentage-of-sale program (Latte) is publicity. A lot times of times we buy products and we don't even know they benefit charity unless we take a good look at the packaging. But when a cashier asks you to add a dollar to your tab to support a good cause, you generally know who's getting your buck. If not from the cashier then from the mobile itself, which many people are asked to write their names on, or from the hundreds of mobiles hanging from the store's walls and ceiling. While the revenue from a point-of-sale program isn't guaranteed, their effectiveness as a fundraiser and marketing is.
