Triggered Donations May Not Be as Lucrative as Point-of-Sale - dummies

Triggered Donations May Not Be as Lucrative as Point-of-Sale

By Joe Waters, Joanna MacDonald

While both point-of-sale and purchase-triggered donation programs (PTD) can be very successful for companies and very lucrative for causes — especially for causes working with large chains, such as Gap, Chili’s, or Walmart — point-of-sale is generally the better strategy for local organizations. Here’s why:

  • Point-of-sale has a direct ask. The choice to participate in a purchase-triggered donation program is left up to the consumer. For example, when shopping at a grocery store, customers may see lots of cause products that have triggered donations.

    But unlike a point-of-sale program, a cashier doesn’t ask the shopper to donate. What moves you more — a table full of Girl Scout cookies with a “Please buy!” sign on it or a 7-year-old scout tugging at your coat to buy a box?

  • Point-of-sale applies to everyone. Only so many consumers will want a latte topped with green foam or a stack of pancakes for breakfast or crave the concoction of liquors and juices found in an iPartini. Consumer preference for the product determines how much money a cause will raise.

    But with point-of-sale, you’re limited only by the cashier’s commitment to ask every shopper, “Would you like to make a donation to . . . ?”

  • Point-of-sale usually means a bigger gift. Some PTD programs donate as little as a penny, nickel, or a dime to causes. Some donate more, like the $100 PUMA donated for every mile logged. A nickel or dime is a lot if you’re working with a behemoth like Starbucks donating 5 cents for every beverage made on World AIDS Day.

    But the return would be much less if the promotion was executed at a local business with just a few locations. The better alternative would be a point-of-sale program. You’ll raise more money.

Choosing point-of-sale over purchase-triggered is sometimes a better choice. Here’s an example from a great cause marketing partner, Ocean State Job Lot, a Rhode Island-based discount retailer with 100 stores in New England. Job Lot raised $1 million for one nonprofit by annually selling pinups at its checkout twice a year, once in December and again in July.

Boston Medical Center's Christmas campaign.

But what if instead a purchase-triggered donation program with one or more products from Job Lot stores was used — maybe a set of pans or a mixer? Then Job Lot could have decided what portion of the sale from that item would go to the cause. Twenty-five or 50 cents? A dollar or two?

Does it really matter? No. It is unlikely that a $1 million would have been raised from a purchase-triggered donation program on the sale of mixers and pans.

Purchase-triggered donation programs are great. But unless your cause is working with the likes of Starbucks or Apple, you have to be realistic on how much they can raise. Given the choice, follow the money and use point-of-sale.