Funding Your Startup or New Charity

One of the most confounding charitable endeavors I was ever involved in was figuring out how to fund a startup charity that made grants to other charities. HelpUsAdopt.org, founded in 2007, is in a similar boat. The 501(c)(3) foundation grants would-be adoptive parents up to $15,000 for adoption expenses.

In short, they raise money to give it away.

Included in their fundraising mix are gala-type events, annual donor solicitation, and a small catalog of products including the necklace and bracelets modeled in the ad at the left by actress Nia Vardalos, of My Big Fat Greek Wedding fame.

The necklace Nia is wearing in this ad from the June 2011 Redbook magazine goes for $225 and the bracelets for $35 each. The HelpUsAdopt.org store also currently sells a brown wooden bead necklace for $95 and a tote bag for $20.

The nonprofit fundraising world is set up to favor established charities, and with good reason. IRS figures show that 16 percent of nonprofit charities that filed a 990 tax return in 2000, didn’t file one in 2005. Since 501(c)(3)s don't have to file a tax return if they take in less than $25,000 not filing means that they either went out of business or that they couldn't raise money.

As a consequence, if your organization is less than five years old, grantmaking foundations seldom gaze your way. Knowing this, grant writers often keep themselves aloof from new charities. Corporate donations are unlikely, although not impossible, to secure for nubes. Bequests, which are a big slice of the revenue pie for established charities are really rare for rookie charities. New charities, therefore, tend to rely on major donors until they can get their feet under them.

HelpUsAdopt.org seemingly has five major donors who came in at the $15,000 level, including the founders, Becky and Kipp Fawcett. So that’s $75,000. Four more came in at between $5,000 to $10,000. So figure $7,500 times four which adds in another $30,000, bringing a grand total of approximately $105,000 from nine major donors. Events and smaller donors brought in the rest of the $300,000 HelpUsAdopt.org has given away since 2007.

It appears to me that as a new charity HelpUsAdopt.org is relying on the jewelry to sell. For my part, I’m chary of such a strategy.

If you sell stuff, someone has to keep inventory on hand. The jewelry is sold online only, so someone has to drive traffic to the website. Then the website has to covert traffic to sales. Someone has to fulfill orders. And if it doesn’t sell someone has to eat it all. It appears to me that HelpUsAdopt.org is the entity on the hook for all this.

All of this would be OK if HelpUsAdopt.org was 'all benefits company' like Newman’s Own, which sells stuff in order to make grants to charities. It would be OK if HelpUsAdopt.org was merely doing a cause marketing deal of the type that Susan G. Komen does where someone else takes the risk of putting the pink ribbon on garden trowel or warm-up suit and selling it. But HelpUsAdopt.org is not Newman’s Own or a Susan G. Komen licensee. It’s a straight-ahead 501(c)(3) nonprofit charity.

I hope I’m wrong about HelpUsAdopt.org’s foray into product direct sales. They have a worthy cause. But I don’t think I am.

Part 2: How Chili's Used Cause-Related Marketing to Raise $8.2 million for St. Jude

[Bloggers Note: In this second half of this post I discuss the nuts and bolts of how Chili's motivates support from its employees and managers and how St. Jude 'activates' support from Chili's. Read the first half here.] How does St. Jude motivate support from Chili’s front line employees and management alike? They call it ‘activation’ and they do so by the following: They share stories of St. Jude patients who were sick and got better thanks to the services they received at the hospital. Two stories in particular are personal for Chili’s staff. A Chili’s bartender in El Dorado Hills, California named Jeff Eagles has a younger brother who was treated at St. Jude. In both 2005 and 2006 Eagles was the campaign’s biggest individual fundraiser. John Griffin, a manager at the Chili’s in Conway, Arkansas had an infant daughter who was treated for retinoblastoma at St. Jude. They drew on the support Doug Brooks… the president and CEO of Brinker International, Chili’s parent co...

Cause-Related Marketing with Customer Receipts

Walgreens and JDRF Right now at Walgreens…the giant pharmacy and retail store chain with more than 5,800 stores in the United States and Puerto Rico… they’re selling $1 paper icons for the Juvenile Diabetes Research Foundation (JDRF). This is an annual campaign and I bought one to gauge how it’s changed over the years. (Short list… they don’t do the shoe as a die cut anymore; the paper icon is now an 8¾ x 4¼ rectangle. Another interesting change; one side is now in Spanish). The icon has a bar code and Jacob, the clerk, scanned it and handed me a receipt as we finished the transaction. At the bottom was an 800-number keyed to a customer satisfaction survey. Dial the number, answer some questions and you’re entered into a drawing for $10,000 between now and the end of September 2007. I don’t know what their response rate is, but the $10,000 amount suggests that it’s pretty low. Taco Bell’s survey gives out $1,000 per week. At a regional seafood restaurant they give me a code that garner...

An Interview with Cause-Related Marketing Pioneer Jerry Welsh

Jerry Welsh is the closest thing cause marketing has to a father. In 1983 after a number of regional cause-related marketing efforts, Welsh, who was then executive vice president of worldwide marketing and communications at American Express looked out his window in lower Manhattan at the Statue of Liberty. The Statue was then undergoing a major refurnishing, and in a flash Welsh determined to undertake the first modern national cause marketing campaign. I say modern because almost 100 years before in January 1885, the Statue of Liberty was sitting around in crates in New York warehouses because the organization building the pedestal ran out of money. And so Joseph Pulitzer, the publisher of the newspaper called The World , proposed a very grassroots solution reminiscent in its own way to Welsh’s cause-related marketing. Pulitzer ran an editorial promising he would print the name of everyone who donated even a penny. Sure enough pennies, along with dimes and nickels, quarters a...

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