Just Bag It

The other day I got an email from a local nonprofit organization announcing “an amazing opportunity.” That certainly piqued my interest – for a few seconds.

What was this amazing opportunity? Well, the email directed me to go to one of two branches of a major supermarket chain. Once there, I was to buy a special-edition reusable grocery bag. And if I did that by December 31 – voila! – the nonprofit would receive a dollar.

This is what some people refer to as a “win-win.” I’ve come to be wary whenever the phrase win-win is used. One side, it seems to me, inevitably wins more from a win-win than the other side. That’s certainly true in this case, and it’s not the nonprofit that’s doing the victory lap.

I don’t mean to sound cynical. Nor do I object to the use of reusable grocery bags. (My trunk and grocery carts are chock full of them.) But I feel the need to analyze what’s going on here and explain the utter inefficiency of this kind of arrangement.

First, we should recognize that this email essentially constitutes “an ask.” The nonprofit is asking me, as one of its supporters, to drive to a store I don’t usually patronize and buy a product I may not necessarily need, all so that the organization will benefit.

Let’s imagine that I go and buy that bag. (I won’t, but let’s pretend.) Then say that a month from now I receive a year-end solicitation letter from that same organization. That’s a second ask. In the past I have sent the organization $100 every November. This time I may say, “Oh, those guys. I already drove to East Sheboygan to buy a grocery bag for them. I don’t need to give them anything else.” Studies show that this is a common reaction – that having done one small kindness for an organization, I’m less likely to take a more obvious and helpful action later. If I indeed blow off their solicitation letter, then the organization just lost a net of $99.

Meanwhile, who actually wins? Well, of course, the supermarket, because while I was there I also bought some milk, bread, bananas, and light bulbs. I noticed their impressive cheese selection and abundant fish department. I may also be thinking of the supermarket as a more benevolent place because of the shopping bag promotion – even though I paid well more than a dollar for the bag, and even though the bag, covered with the supermarket’s logos, functions as an advertisement for the store.

Let’s further imagine that the nonprofit’s appeal is pretty successful. Let’s say that 250 people buy those bags. That’s a lot of people, but it results in only $250 for the nonprofit. And if even a handful of those bag-buyers are now less likely to make an outright gift, the nonprofit probably lost money in the process. Meanwhile, we have to keep in mind that this analysis doesn’t count the time put in by the staff flogging this enterprise.

I’ve written before about how Amazon seduces nonprofits into shilling for them through its transparently self-interested “Amazon Smile” program. I pointed out that Amazon has by many accounts engaged in unethical business practices, and that nonprofits should think twice before aligning themselves with that kind of corporation. But my criticism of Amazon Smile wasn’t about ethics as much as it was about how it’s simply not a wise use of time for the nonprofits. These kinds of partnerships return so little for the effort.

These schemes abound, not only from large corporations, but from locally-owned enterprises as well. I once was at a board meeting of an organization dealing with enormous financial pressures. The organization needed to come up with $250,000 – fast! – or risk closing down. At an emergency meeting we drew up ambitious and urgent plans to meet that enormous gap. Then, as the meeting ended, one of the board members derailed the conversation by saying that he had arranged a benefit at a local restaurant. On the following Tuesday, he explained, twenty percent of the dinner bills paid by self-identified supporters would be donated to the organization. And the board member made it clear that he very much expected all board members to take part.

So board members needing to raise $250,000 reluctantly and resentfully went to a bad restaurant so that the organization could get a $6-or-so kick-back from their dinner bill. What were the board members not doing because they were going to dinner? Perhaps they were failing to make the critical contact with donors who could write very big and important checks.

And that’s what’s overlooked when nonprofits get excited about these collaborations: the opportunity cost. What are the staff and board not doing while they are telling their donors to drive to a distant supermarket to buy special grocery bags or to eat at a particular restaurant on a Tuesday night?

Moreover, messaging gets muddled. Nonprofits put out a confusing double message by telling people not only to donate money, but to buy stuff from Amazon.

Let’s go into these partnerships with our eyes open, folks. Companies are writing fewer and fewer checks to charity, preferring to support nonprofits through these kinds of cause-related marketing schemes. Most of them involve convincing you to market the companies’ products to your donors. In so doing, you risk alienating your donors and cannibalizing their outright gifts.

Many board and staff members are drawn to these kinds of efforts because they seem like a simple ask, less risky than requesting a direct gift. Easy? Yes. Effective? No. Worth it? Almost never.

Copyright Alan Cantor 2015. All rights reserved.

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6 Comments. Leave new

  • I very interesting analysis of the situation. Nonprofits need to get the biggest bang for their buck (donations). You are right, it’s not just how to spend donations wisely but how to recruit potential donors wisely. And those who give to nonprofits are becoming more critical of where their dollar is going. I know I am. We see if with the larger so called nonprofits that have such high administrative costs that one questions whether their money will get used to further the cause at hand or whether to donate at all.

    Reply
  • Right on Al. I especially want to forward this to every Board member who thinks these “bake sale” fundraising ideas for the new century are better than being trained to come on an ask with me.

    Reply
  • paula kazarosian
    October 20, 2015 3:31 pm

    Hi Al,

    I never thought of it that way. Good article . hope you are well.
    I will tell you the one thing that really aggravates me into NEVER giving to certain charities, are those that the person at the checkout register has to ask you if you’d like to donate a dollar to such and such organization. It’s embarrassing, it’s annoying and I feel like slapping the management for allowing it.
    I usually say “No thank you” through a polite smile, but inside I want to say “I give thousands of dollars to my choice of groups so don’t bother me for this organization which I do not support nor agree with!”
    What are your thoughts on those situations?

    Reply
  • N. Parker Prescott
    October 22, 2015 2:42 pm

    I very much appreciate your point about the “I already gave to them” syndrome. I’ll pass that wisdom on, thank you. The only way the shopping bag could produce value beyond a buck would be if it was well branded with the nonprofit’s name and a clear mission (and printed at the store’s expense, of course, as a an extension of their involvement). And that graphic is going to have limited impact unless thousands are sold over a long timeframe — and its an attractive “accessory” for the shopper. Even then, how many of us notice other shoppers’ reusable bags? That said, for the right organization — a food bank, for instance — it could be effective collateral with a collection box at the exit.

    Reply
  • It would be helpful if readers did a little of their own research before responding. To
    wit, note one person’s research:
    “First, there’s a lot of evidence to support that people are actually quite happy and more
    generous after they support a cause via a cause marketing promotion.
    According to a 2010 Cone Study that involved a larger sample than the Michigan study,
    86% of Americans say purchasing a cause-related product did not replace their
    traditional donation(s) to their favorite charity.” Programs like the bag donation are *supplemental* to smart, dedicated fundraising that includes one on one discussions and careful stewardship. Bag programs are not substitutes to professional fundraising. Instead, they can be viewed as community support and dedication to worthy nonprofits.

    Reply
  • Paul VanDeCarr
    October 24, 2015 6:04 pm

    Hear, hear!

    Reminds me of a promotion last Christmas at Barnes & Noble. At checkout, I was asked if I wanted to buy one of several books to donate to homeless kids (or kids in foster care, something like that). I bought one of the books and donated it, but only after I walked out did I think that I paid full price (about $8) for a book that cost very little to produce, and netted B&N a profit. To my knowledge, B&N did not even contribute to the charity. That $8 could have been much better spent on a bunch of used books or other purposes.

    The point about people donating less after buying a small charity product is troubling — though I see the comment here that contradicts that. I would think that a very small donation is a way of hooking people and getting them more invested in a given organization or cause. But I don’t know. Regardless, your point stands that it’s far more of a benefit to the corporation than to the nonprofit.

    Reply

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