Spotlight on Online Fundraising
by the AFRDS
The latest form of fundraising to emerge is an
online version of the retail mall with schools and
other non-profit groups receiving rebates based on
online purchases made by their supporters. This
new twist on product sales is attracting attention
and raising new questions for schools and
non-profit groups who must make fundraising
More than two dozen online fundraising
companies have formed in the last year. Schools
and other non-profits are testing the new waters.
Approximately eight percent of schools have
alliances with an online fundraising company,
according to the National Association of
Elementary School Principals. The Washington
Post recently reported that one of the largest
company's in this young (and now crowded) field
boasts a customer base of 17,000 schools who
have netted only $1 million - an average of $53
per school. By comparison, traditional product
fundraising raises an average $13,000 per school.
Online fundraising is not a replacement for
traditional product fundraising, experts say. But as
more and more consumers do more shopping
online, it's expected that fundraising online will
grow as well. For now, most groups approach
online fundraising as a natural extension of their
existing fundraising efforts.
The National PTA, PTO Today and a number of
industry watchers, suggest non-profit organizations
considering online fundraising keep the following
points in mind:
Online fundraising appears to be less
labor-intensive and, therefore, may require
fewer volunteers. In most cases, there are
no printed order forms; and, products are
usually shipped directly to the supporter.
However, sponsoring groups are still
required to help promote the site.
Online fundraising offers flexibility,
allowing family and friends to go online
anywhere, anytime to make a purchase.
But because some people may not have
Internet access, there may be fewer
potential buyers than with a traditional
Online fundraising companies are still
quite young and the market appears to be
getting crowded. While buyers usually
benefit from competition, experts warn
that rebates may soon begin to shrink as
these competing companies fight to
compensate for reduced profits.
When interviewing online fundraising companies, experts suggest
applying the same rigorous research as you would when evaluating
a traditional fundraising company. In addition, they recommend
- Clarify the percentage of the rebate being offered. For
example, if a company claims to offer 70 percent, does that
actually mean 70 percent of the 5 percent rebate provided
by the retailer? Also different retailers on a given site may
offer different rebates.
- Find out if there is a minimum amount of money that must
be reached before the vendor issues a check.
If so, find out what that amount is and what time period
there is for reaching that minimum. Also ask about what
happens to the money if your group doesn't reach that
- Check out the company's Web site and technology. Is it
easy for a supporter to navigate and make purchases? How
are rebates tracked?
provide info on themselves and /or their children? 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 fairly safe to assume that the company is
willing to share its database for the right price.
- Find out how much support your school will receive from
the online company. Some have customer service
representatives who can provide help by phone, e-mail or
in-person. Many offer printed materials to help promote the
- Ask for references. Because most online fundraising sites
are still young, results are hard to come by. But it's still a
good idea to talk to some of their current customers about
service and overall shopping experience.
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About the Author:
This article is from the Fall 2000 issue of the Fundraising Edge, an online publication of the Association of Fund Raisers and Direct Sellers and is reprinted with permission. Visit their web site at http://www.afrds.org/ for more information and a look at the complete issues of the Fundraising Edge.
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