How To Choose a Fundraising Company

What factors are important when choosing a fundraising company?

Choosing what product to sell for your fundraiser is an important decision, but the process doesn’t stop there. Finding a company that will work with you to maximize sales can make a big difference to your success. You’ve probably already learned of several interesting options through ads, mailings, and calls. Start with these companies; by seeking you out they’ve already shown an interest in working with your school.

When you’ve narrowed the field to several possible companies, it’s time to interview the sales representatives by phone or in person. Here are some more questions to ask:

What’s the average purchase made per family? What is the average sell-through rate? (That’s the amount of product usually sold by each seller.) Obviously, the higher these averages, the better.

Is there any direct competition with other schools in the area selling the same product? If so, ask whether the company has a different brochure or product line so you’re not selling the same things.

What percentage of the total sales will your group receive? Is payment made when the product is ordered or when it’s received? Are there any additional fees, such as fuel surcharges or shipping fees? Don’t be afraid to comparison shop. Get a quote for the cost of your items including delivery, then approach two or three other companies to compare.

Does the company accept late orders? If so, will your group receive the same profit on these?

For online sales, will the revenue generated continue past the time of the main sale, and will individual students get credit for these sales?

Can you get product samples? The ability to display or distribute these samples at a parent group meeting is a great sales tool.

In the packing process, are orders scanned for accuracy? Are they hand-packed? Knowing this will help you determine the amount of order checking you’ll need to do.

If the company runs out of stock on an item, does it back-order that item or substitute something else?

How is the product distributed? Packing and delivery processes can vary depending upon location. A local company might have a representative who delivers the product whenever it’s convenient for your group. A national or regional company, especially if it's packing and shipping from hundreds of miles away, will have set guidelines for delivery of the product.

How are damaged or unsatisfactory items handled? Some companies replace items at no cost to parent groups. Others make replacements at one time, and groups have to absorb the cost of damaged items that aren’t found until later.

How much time will the sales representative be able to invest in your group?Whether it’s a lot or a little, it helps to know up front.

Can the company provide references? Ask for three references for the fundraising company and the sales representative you’d be working with. (See “Checking References” below for questions to ask.) If the company is too new to have references, look for the organizations it belongs to, such as the Better Business Bureau or local chamber of commerce.

What can a PTO negotiate in a contract?

Once you’ve chosen a fundraising company, it’s time to work out a contract. This is where you can ask for special considerations. Everything is negotiable.

Ask whether there’s a reward for making an early commitment to the company. Many companies offer bonuses or incentives for signing up early.

Ask about special partnerships or promotions your rep can offer. For example, Carol Rampey, president of UnitedScrip in Seneca, S.C., works with a school at which every parent has to bring in two reams of paper each semester. A special promotion from her partnership with Nike allowed her to send a ream of paper with each student’s order. “Every now and then we get freebies we can pass along,” she says.

Negotiate loss fees. Sending home product samples—such as coupon books—is an effective way to generate sales because the product is made more visual and is understood better. Unfortunately, some of the products get lost in the process. You can negotiate the percentage of these “loss fees” with your rep. For example, the fundraising company might accept a 20 percent loss rate; after that, you might agree to pay $2 per coupon book for the replacement fee.

Product delivery fees can really cut into profits. Some distributors offer free freight, so ask your representative whether they can waive those fees.

Negotiating the distribution process really depends on whether your sales rep distributes their own product, so be sure to ask. For example, you might be able to get orders sorted by student even if that’s not standard operating procedure for the company.

The most common area of negotiation involves prizes. Sales representatives are more open to negotiation with schools that have high sales levels. Ask what kind of incentives are offered and whether the level sold for prizes can be lowered, though it’s likely the company will ask your group to share some of the cost at low sales levels or for a big prize such as a schoolwide party.

What can you expect from your fundraising company representative?

Before, during, and after the fundraiser, your sales representative should be involved and attentive. You want someone who’s excited about the product and committed to helping you reach your goals.

The rep should ask how much money you need to raise and how soon you need to do it. They should talk to you about what motivates your families so you can work together to create the most effective fundraiser for your community. They might be able to steer you in a more profitable direction based on what they’ve seen work elsewhere.

Good communication throughout the process is vital. Make sure your rep meets with you at least twice before your program begins, and they should stay in touch by phone, text, or email leading up to and through the kickoff. You’ll want to know how to collect money and turn in orders, and they should be available to work through any issues that come up during or after your fundraiser.

Checking References

About the company:

• Did the fundraising company do what it said it would do?

• How was the quality of the product and its packaging?

• Did the company provide all the needed promotional materials?

• Did it provide extra services such as packing the product by student?

• Were the student prizes good?

• Was the company representative able to attend a live kickoff?

• Did your group raise enough money for what it needed?

About the representative:

• Did the sales representative conduct business in a professional manner?

• Did the representative respond promptly to your calls and emails?

• Did the sales representative take time to answer all your questions and address any concerns you had?

• Would you work with the same sales representative again?

Originally posted in 2010 and updated frequently.