The Donation Dilemma

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 her 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 all to donate to my child’s school auction. Can you?” Now, she is talking to you, the owner, and doesn’t even know who you are…and you would swear you have never seen her 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 be able to turn the dilemma into a “Donation Decision” by establishing criteria to help you. Decide now WHO you will donate to and WHAT you will donate and HOW MUCH.


The most important place to start is to decide what 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 kid’s 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 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.


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.

A Great Donation Example from my clients Jeff and Linda Lyden at Castle Toys

Let’s talk about the most common mistakes. Do NOT donate gift certificates or old inventory. These items don’t reflect your store’s personality well and are always overlooked. Pick out an item that says who you are and makes an impression. ALWAYS make sure that your store’s name and who you are is clearly stated. Don’t count on the organization to do it for you. Also, in the early conversations be sure to make very clear how you want your donation to be displayed. Don’t hesitate to say that if they feel they can’t honor your requests than 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.

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 2 pairs of pajamas, 2 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 just did not 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 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! I also got a stand up acrylic frame to hold this 8.5 x 11 paper so that it would always be visible.

Also, to keep track of donations during the year, I created a customer record in my POS system name “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.

Another very effective way of handling donations is to offer to do special shopping nights for the group. List the details out on a flyer that you can give to the customer requesting the donation. The benefit of that is that 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 actually 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 benefitting organization will usually split marketing costs with you.


That is a decision that you have to make for yourself. I can tell you that I donated to almost everyone that fit into my criteria.


Learn to say no. The reality is that all of the above criterion 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 non-profits and community organizations when it comes time to find donations. You should feel good about giving! Utilize the ideas about to turn the ‘Donation Dilemma’ into a ‘Donation Decision’!

One Comment on “The Donation Dilemma”

  1. Great post. I’ve owned a local gallery gift shop for almost 20 years now and many days I feel exhausted from all the donation requests that come to the store. I do implement some of your suggestions already but love some of the other ideas such as a photo of the item and how it was displayed. I am happy to be a fan of your page. I always get good information from you.

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