Tough Economy Calls for Innovation, Nonprofits Raising Funds with Online Thrift Stores

There is a Ford dealership that just celebrated being in business for one hundred years. Quite an accomplishment when one considers how many tight economic times they had to go through to still be thriving. But anyone that visits their showroom can see the secret to their success and longevity.

One entire wall is dedicated to nothing but displaying plaques and mementos of thanks from the community. The business has supported everything from youth sports programs to college teams by either coaching or financial donations. They are an important part of the community and people want them around for another hundred years.

Nothing endears customer loyalty more than supporting a cause they believe in. But these are different times. With more business done on the Internet every year can being part of the community still be important? Yes, the community just became global.

There are some positive things about the World Wide Web. Not so long ago if someone moved out of state or out of the country, they quickly lost touch with friends and community. Especially hard on school age youth, this phenomenon has nearly totally reversed. Now rather than losing friends, young people stay connected through social media and taking that community with them when they move makes it much more possible to embrace the new place and make new friends.

When someone moved from one place to another, the first thing they needed to establish were new connections and find out good places to eat, where to get their hair done, or car serviced. Now days they can be driving through a town they have never been in and find the best place to eat right on their smart phone.

Are plaques to hang on the wall still going to be relevant?

In an age when most people don’t know where their phone book is, even the local tire store needs to have a web site and connections to that web presence to establish it’s value.

Search engines are now the first place most shoppers go to find what they are looking for. As such, an entire industry dubbed Search Marketing has sprung up to help a business to get found when a potential customer is looking for what they have to offer. The competition for ranking on page one of search results is brutal and expensive.

Search Engines are always refining their search results to make sure that the answers they come up with when someone is using them is the absolute best, most relevant answer. The connections between websites, the “links” make up a big part of that equation because a link represents a value, given by another website.

Not all links are created equal. Google was the first real search engine to give emphasis and different values to links pointing at a website and because of that it now represents the giant in the industry. What made it so novel was that the formula used didn’t just count the shear number of links pointing at a website but it gave varying values to those links.

For instance, links from the back page of a website that is essentially just a list of links, carries no value. The reason is that no one searching for anything every goes to a different website, clicks through to a page called “links” and then picks a website. Therefore although it technically is a link, it has no real value.

Also, a link in the comment section of a blog, linking out to a website that has nothing to do with the subject being discussed, likewise has no value.

By contrast a link from some websites has a higher value because these sites are more trusted by the search engine. An example would be links from news agency, school, or charity websites all carry more trust and therefore are more beneficial.

According to the Urban Institute many nonprofits have been hit hard with less resources coming in and yet a higher demand for services from the community they serve. With the needs increasing and the traditional sources of funding shrinking, nonprofits are in search of new sources of gifts and donations.

Since more than half of the 1.6 million charities in the nation operating with a budget of less than $25,000 annually, an increase of a few thousand dollars more per year would make a huge difference.

So with both business and nonprofits feeling the pinch of a tough economy maybe the solution would be something that benefits both.

That is the impetus behind a new online service built to aid the nonprofit industry in their fundraising efforts, while giving online recognition to business philanthropy.

The service provided by builds an online store for each charity that wants to be involved. There are no out of pocket charges for the charity, so no setup fees or maintenance charges. The store is customized to compliment the nonprofit website and contains no billboard advertising that might be distracting for visitors or contrary to the central focus of the nonprofit. The idea is that once someone visits the store they should not be led off in another direction when the goal is to bring in money for the charity.

The charity can then list items that have been donated to them directly or solicit online donations from any business that is interested in supporting the cause. A business can donate goods or services to the store, providing it does not conflict with the nonprofit mission. For instance if the nonprofit store was raising funds for the Mothers Against Drunk Driving, a donation of fine wine would not be appropriate.

Once the item is sold, the donor business would get an acknowledgement for their support by way of a “Thank You” page on the nonprofit website. The page would list what had been donated and encourage visitors to support the business if they had need of the product or service it provided.

Instead of a plaque, this modern day version of acknowledging a donor business would be visible to the online world not just those actually physically visiting the business.

How much money could potentially be raised in such an effort?

The best possible scenario is that the nonprofit treat it like an online version of a Thrift Store rather than say an occasional event. That way the online marketing world could come and donate anytime. The primary difference being that this store does not require renting a building in a prime location, paying for fixtures, lights, displays, garbage, electricity, water, or sewer service. The online donor stores, ships to the buyer directly, so there is no need for a huge storage facility.

The potential buyer can visit the store from the privacy of their own home instead of jumping in their car and driving downtown. The online store builds an email database of visitors that come to the store and register so that they can be alerted when new items arrive that may be of interest. The email data is exclusive to the nonprofit the information is never sold or used for any other purpose.

The Association of Resale Professionals reports that Goodwill Industries generated $2.69 billion in sales from the 2,500 plus resale stores across America in 2010.
An online version of the Thrift Store would not require the expenses to operate that a physical store would and could be attended by one person on a part time basis.

When a product or service is sold, the money goes directly to the charity by way of their chosen processing service. The service provider, bills the nonprofit a flat 5% on items sold through the store to cover hosting and maintenance costs for the store.

Ken Berger of the Charity Navigator recommends that nonprofits try to keep their fundraising costs to no more than 10% of the money raised, so a service that costs 5% with no out of pocket costs is well within reach even for a charity with a small annual budget.

With regular donations coming from online business, the store would have constant changes to the virtual inventory would encourage shoppers to visit often.

Like a news website with constantly changing stories, a store with constantly changing inventory would require frequent visits from the search engine that wants to present the most up to date information. Eventually, items listed in the auction would begin to show up when a search is made for a specific product.

For instance an online shoe store may donate a pair of Nike Air Jordan’s to the nonprofit store. Since this is just one of the many items donated on a given day, the search engine would have noted the new item. When someone goes to the search engine and does a search for Nike Air Jordan’s, it could potentially list the pair available at the online store.

Since the economy is not likely to suddenly bounce back any time soon a service like this that can benefit both the nonprofit and the online business just makes sense both now and in the long term.


Urban Institute ( High-Impact Philanthropy in a Recession

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