Nonprofit Styles Aren’t Out of Fashion

June 15, 2008       Mark Hrywna      

Livestrong bracelets will go down as a fundraising phenomenon, generating millions of dollars for the Lance Armstrong Foundation (LAF), but also for nonprofits around the nation.

Four years ago last month, the bright yellow silicone bracelets debuted with a goal of selling 5 million units. By summer’s end, LAF surpassed the goal and bracelets could be found around the wrists of millions of people. Assorted nonprofits capitalized on their popularity, selling different colors to represent their specific causes.

Nonprofits may not make “a profit” like typical corporations, but that doesn’t mean they can’t hawk their wares. Merchandising can become big business no matter the organization if the market exists, from neck ties and T-shirts to toys and bedding. Licensing products can become another avenue for branding or even another means to diversify their revenue stream.

Merriam-Webster’s Dictionary defines fad as “a practice or interest followed for a time with exaggerated zeal.” So if nonprofits continue to employ the Livestrong-like bracelets today, several years after their “heyday,” can they be considered a fad? Furthermore, the Lance Armstrong Foundation itself might not be moving 22 million units like it’s 2005, but the 2.4 million bracelets sold last year were twice as many as the previous year.

“It was definitely a phenomenon when it came out, and…it’s a phenomenon that hasn’t gone away and it continues to grow in awareness and impact,” said Betty Otter-Nickerson, chief operating officer at LAF.

“Some people have had the sense that they’re not as important, but I think the numbers kind of show the increase in awareness around the mission and the cause as the wristband is an iconic figure for that and it continues to be something that we distribute and sell widely,” Otter-Nickerson said.

Today, while some might be looking for the next fundraising phenomenon to come on the scene, nonprofits continue to use the bracelets to brand their causes and identify supporters. And many still make a few bucks while they’re at it.

“What it really underscores is how when the wristband was introduced we changed the face of philanthropy, and allowed people a way to show support for a cause at very nominal investment for the person who wants to do that, and have an iconic way to show that as well,” Otter-Nickerson said. “That’s really the way that we think about the wristband; we’re very supportive of people who want to do a wristband.”

Otter-Nickerson said that she fields calls from organizations, not seeking permission to use the band, but looking to embellish them with some sort of trinket. The foundation has a trademark on the Livestrong slogan and the yellow wristband, but no copyright on the concept of a wristband, she said, and that was a “conscious decision” made by the organization.

“People are very creative and see it as a good avenue to not only raise funds but to show support for their cause and their organization,” she said. “That’s why we love seeing wristbands on people, regardless of the color. We really like when we see yellow ones. It’s a great way to start a conversation with each other, just walk up and ask, ‘What’s your connection to the cause.'”

Richard Geswell, president and CEO of the Crohn’s & Colitis Foundation, calls the bracelets “almost tribal” and a great way to identify with a group. “For our patients and patients of other organizations, I think there’s been that kind of tribal mentality, and really belonging to part of an organization or a group and being identified with them.”

The bracelets are “a symbol of, ‘This is my organization, and please help me.’ I think we’ll always use them that way,” Geswell said. “That was unique in a great way for nonprofits.”

“Got Guts” is inscribed on the bracelet sold by the New York City-based nonprofit, which has moved about 15,000 units during the past six months. That figure is “down certainly from its peak considerably, but they still sell,” Geswell said. From 2004 to 2007, the foundation sold about 150,000 bracelets, or an average of 50,000 per year. That’s a drop-off of almost 40 percent to the 15,000 during the first six months into this year.

The “Got Guts” bracelets generated about $150,000 — with 100,000 units selling directly online at $15 for a pack of 10 — netting the charity almost $100,000. The other 50,000 bracelets were ordered in bulk and used as giveaways and direct mail promotions.

“We don’t really promote them very much at all,” Geswell said, but chapters tend to use them as giveaways at their events and activities and sell them locally at fundraising events. The original bracelets only said “Got Guts,” which didn’t make for a good branding mechanism, but they’ve since added the Web address ccfa.org.

Crohn’s and Colitis has an online store where it also sells T-shirts, caps and similar items for patients. More recently, as part of the online store, the nonprofit has been selling merchandise for its team challenge and half-marathon and walk programs specifically, items like running fleeces and socks, and hats, among others. “We haven’t really started marketing it yet so sales have been modest, but we expect it to be a sizable piece of the business because those kinds of participants like to get that logo gear,” Geswell said.

“I’m sure we’ll be doing more,” Geswell said as the organization’s new programs (Team Challenge and half-marathon) are branded orange. “We’ll probably try to renew the inventory with new colors to give people real inspiration to do it again,” he said.

Joanne Cacciatore, president and CEO of the MISS Foundation in Peoria, Ariz., continues to make black bracelets a symbol for her organization and those mourning the loss of a child. She hasn’t seen a significant decline in sales in recent years and still gets bulk orders from hospices and hospitals to include in bereavement packets.

The MISS bracelets are black with the inscription, “In mourning,” said Cacciatore, as “a kind of ritualization of the important part of the bereavement process.” In some cultures, people still wear black armbands when in mourning and during the Victorian Era it was black lapel pins, she said, so the bracelets have contemporized it. “It’s kind of made it a little more trendy to say, ‘I’m in mourning.’ A lot of people buy them when the initial trauma and death occurs, as an outward symbol of grief.”

An all-volunteer organization, MISS Foundation has 77 chapters around the world. The bracelets are a “very tiny part of the annual budget,” Cacciatore said, as most of it comes from private donations. She estimates sales, not including bulk orders, of about 1,500 a month. The organization buys the bracelets for about 30 cents a piece and sells them for a dollar.

Licensing their trademarks can mean millions for nonprofit organizations. For many years, Save The Children (STC) sold neckties featuring children’s artwork and designs. In an effort reinvigorate the market, the Westport, Conn.-based nonprofit will re-launch a new collection in time for Father’s Day this month.

With interest waning on the retail front after many years, STC got together with its licensee and created an new line of ties based on the regions where the charity works. In addition to collections that will represent Africa, Asia, Latin America and the Middle East, STC will have a U.S. collection as well as a special Darfur collection. “It’s less on child-like art and a more design-centric line of product,” said Liz Sheppard, associate vice president for corporate partnerships.

The ties debuted at an apparel show this past February in Las Vegas, where they were very well received, she said, sparking interest from five retailers. The ties were available for purchase on the Web beginning May 1. The classic line of ties will remain available.

Considered a hallmark of STC’s products, the ties were launched in 1992 with Randa Accessories taking it over in 1998. “It was very successful until late, maybe the past year or two,” Sheppard said. “The designs were not refreshed enough. With apparel and accessories, it’s really about design. Any licensor worth their salt will tell you that. Even if a consumer has an affinity for a product, they don’t like to buy six of the same thing.”

Randa is licensed to use the STC trademark and under that agreement has the right to produce and market ties, based on designs the charity approves. “They do the heavy lifting,” Sheppard said, with 3 percent of the retail price ($29.99) from each tie going to the charity. Last year, merchandise made up part of the $11 million in “other revenue,” and provided unrestricted funds for STC. The licensee is a privately held company, Sheppard said, so it doesn’t like to discuss revenue details.

At one point, STC had a fairly robust children’s program but it ran into the same issue as the ties, and so the charity “pulled back on a number agreements,” said Kymm Carlson, associate director, retail partnerships and product marketing. Its children’s program ran the gamut, including things such as bedding, home furnishings and toys, but are no longer available in the general market.

The market, Carlson said, has seen a significant shift in the market toward promotional children’s properties, Carlson said, with more competition from Disney and Nickelodeon while the retail world has shrunk to just several large entities, like Wal-Mart, Target and Kmart. “It’s become a very competitive market and you need to take a very strategic approach,” she said.

While some licenses work out and others are successful and simply run their course, there have been those that just never did work for some reason. “Every once in awhile, you have a license with great intentions and it just doesn’t take off,” Carlson said, pointing to a doll licensee or two that weren’t as successful. NPT