Day-to-day consumerism can bring bucks to charities.

June, 30 2005• Canadian FundRaiser

Charity supporters can shunt some of the money they spend at grocery counters, restaurants or service stations to their favourite cause, via the Shop and Support program, now available on the web.

The system is a little complex, but could be fairly easily incorporated into a charity's fundraising program with a minimum of administration and promotion to supporters, and not excessive trouble to those supporters.

It involves distribution of gift cards to participating retailers – more than 100 of them, comprising most of the major nationals, from A & P and Sobeys, through Canadian Tire and Home Depot, Shell and Petro-Canada, to Sears and Shoppers Drug Mart.

As the program has been running, explains President and co-founder Jerry Rotondaro, it has been mainly utilized by such groups as schools, sports teams, and the like, which have frequent “ touch points ” with their supporters.

The group might buy the gift cards in bulk, then sell them over-the-counter to supporters, for example churchgoers filing out of service. Or they might, in the case perhaps of a daycare centre or elementary school where children are being delivered and picked up every day, or in the case of a sports team where parents are attending games, take orders for cards, then bulk order them at set periods, have them delivered to the institution, then distribute them to parents.

Now online

For many charities which don't have these kinds of touch points, the program would not have appealed in the past. Now, however, cards can be ordered over the Internet. Charities can register with Shop and Support and be given a unique identifier number. Their supporters can then order their cards online and have them delivered within one or two business days either to their home or to the organization.

The cards are no-load, no-cost, to either the supporters or the organization. A $100 gift card costs $100 to buy, and purchases $100 worth of goods (there is a shipping charge). If this sounds like magic – who's making what here? – it isn't, quite.

Preferred One, the parent company for the program, buys millions of dollars worth of gift cards a year, and so earns a discount off face value from participating retailers, explains Rotondaro. It takes its administrative and marketing costs and its profits out of that discount.

Retailers are anxious to participate, he explains, because gift cards are big business and growing bigger. It's increasingly popular – and acceptable – to give them instead of items which may or may not be acceptable to the recipient, and they almost always "lift the sale". That is, a person with a $100 gift card in his/her hand is likely to spend upwards of $150.

Day-to-day purchases

For supporters who buy the cards for themselves rather than as gifts, they can use them for their day-to-day purchases, knowing that what they have to spend anyway is helping their favourite cause raise needed funds.

The percentage of contribution to the charity is set by the retailers and ranges from 1½% to 20%, averaging out at about 4% or 5%, says Rotondaro. He claims that the average consumer spends about $20,000 a year on ordinary, get-along purchases, which could create possibly a $1,000 donation.

Most of the cards are normal plastic gift cards of the declining balance kind, so if the face value is $300 and the consumer spends $50, there is still $250 left on the card. Again, the system used is determined by the retailer. In the case of a paper certificate, the retailer might prefer to give the consumer cash back on the difference.

The program differs from online stores dedicated to one charity or a group of charities in that the supporter is out in the stores, buying mainly (though not solely) goods s/he probably wouldn't purchase online, again like groceries, gas, and dining out.

The company also suggests the cards offer participating charities an opportunity to provide volunteers with a different and valued thank-you to reward them for their efforts.