The definition of the word ‘dilemma’ is a situation in which somebody must choose one of two or more unsatisfactory alternatives.
That describes EXACTLY how we retailers feel when a customer comes up to the counter with a piece of paper in their hand and says:
“Is the owner in? This is one of my favorite stores and I shop here all the time. I’d love for you to donate to my child’s school auction!”
Now, they’re talking to you, the owner, and don’t even know who you are… and you would swear you have never seen them before – AND the school is located an hour away from your store…and….ARGHHH!
Don’t you hate this situation?
It IS a dilemma because every alternative seems unsatisfactory.
You need a strategy for how to handle donations. You need to turn the “Donation Dilemma” into a “Donation Decision” by establishing a few helpful criteria.
Decide now WHO you will donate to, WHAT you will donate and HOW MUCH.
Who should I donate to?
The most important place to start is to decide which organizations you desire to support with your resources of time, money and inventory.
It is important and vital to give back to the community that supports you. But you must decide where to give back – what touches your heart and soul.
My store was a kids store so we decided to support ONLY organizations that benefitted children of the age that we served. The beauty of that was that it allowed me to turn away some donation requests easily because I could tell the customer exactly that.
The next step is to analyze if the location of the organization is a deciding factor. We decided that the organization had to be within the boundaries of the local school district.
The only exception being important causes, like children’s cancer research or the local zoo.
Once again, this gave me the opportunity to share that criterion with the customer and tell them if there was something else that met our criteria we would be happy to participate.
What should I donate?
Donations are an opportunity for your store to shine. I grew to love donations as I recognized the impact that they can have on a community.
It allows me to show off my store, impress potential new customers and hopefully bring them through my front door.
You want the item that you donate to generate all the free word of mouth publicity it can.
So let’s talk about the most common mistakes:
- Donating gift certificates or old inventory – These items don’t reflect your store’s personality well and are always overlooked at auctions
- Not making sure that your store’s name and who you are is clearly stated – Don’t count on the organization to do it for you
- Not being clear on how you want your donation to be displayed – Don’t hesitate to say that if they feel they can’t honor your requests you won’t be able to help them. Demand to see a photo of it for your records – I would always say my accountant liked to have it along with their formal donation request on the organization’s letterhead.
The importance of the display
I remember going to my own child’s school auction and anticipating the response I was going to get from my fantastic donation! I had put together a themed basket for a kid’s sleepover party.
It contained pajamas, fun games, an arts and crafts activity and a bedtime book. I was horrified to find out that it had been grouped together with a gift certificate from a movie theater and a tiny donation from another competing business.
And worse than that, the signage made it seem as if the entire donation had come from my competitor!
I was so mad… and you know, my friends on the committee didn’t understand at all! I learned a very valuable lesson that changed the way I handled donations.
I created a form to use with every donation that talked a bit about who we were and had a blank area where I could specify what the donated items were and what their value was. I got a stand-up acrylic frame to hold this 8.5 x 11 paper so that it would always be visible.
I would pick the items to create a story and then would allow the winner of the items to return them to my store for ANY items of the same value. That way I never had to worry about sizes!
How much should I donate?
This is a personal decision that each retail owner has to make for themselves. But setting an annual budget or limit, will make it easier for you to say no once you’ve reached your limit for the year.
Tracking your donations
To keep track of donations during the year, I created a customer record in my POS system named “Donations”. With every donation I made, I would ring it up using that customer and mark the inventory down to $0. That way the inventory was deducted from the system. The receipt would be stapled to their request form.
Shopping nights for a cause
Another very effective way of handling donations is to offer special shopping nights for members and supporters of the group, where a portion of the evening’s sales are donated to the organization. List the details out on a flier that you can give to the customer requesting the donation.
That way they can promote it to their members for you and you can access new customers!
This type of cause marketing is absolutely fabulous for every type of store. It can take a bit of time to get going but be patient and keep at it. It creates a win-win for both sides.
Finally, don’t miss the opportunity to host a benefit or sponsor an event that relates with your store and your ideal customers. This form of cause marketing can be an expensive form of charitable giving but it can also be a highly-visible form of support.
The budget for it comes from your advertising/marketing funds. Be sure to ease the financial burden of the contribution by partnering with other compatible businesses.
A great way to get more help is to ask vendors and suppliers for merchandise and other giveaways. The benefiting organization will usually split marketing costs with you.
During this event, make sure you give out a gift certificate from your store to every member attending. I know this can seem scary, but there is a cost to bringing new customers to your store, and this is one of the least expensive ways to do it. I recommend giving out gift certificates between $15-20 for the biggest impact and consider adding a time limit on it to create a sense of urgency. Don’t restrict what this gift certificate can be used on, but do print “one per family” on them.
The art of saying no
Learn to say no. The reality is that all of the above criteria can be changed at any time. Sometimes you just need to say no.
I would say, “I am so sorry but we have already met our donation budget for the year or quarter. Please bring your request in earlier next time and I would be happy to help you out.”
All of us small independent retailers will continue to be favorite targets of nonprofits and community organizations when it comes time to find donations.
You should feel good about giving! Utilize these ideas to turn the ‘Donation Dilemma’ into a ‘Donation Decision’!