NEWS & INFORMATION

Swag, Gifts, Printing
& Drop Shipping

By Dan Hubbard

Not too long ago, we began writing blogs about fundraising, to wit: “Gen Z Nonprofit Donors Are a Force to be Reckoned With”, and “Improving Tech in Non-profits – Part I – Influencing Platforms”.

As many of you may know, we are in a ton of social media groups, and it never fails that two question categories are brought up each week – at least two-dozen times:

1 Other than grant funding recommendations;
Covered by both blogs hereinabove!

&

3 Swag, gifts, products;
That’s what we’re writing about today!

Offering swag or gifts is an increasingly popular strategy for nonprofits to entice donations. When implemented correctly, it can enhance donor engagement, build loyalty, and increase contributions. Swag—such as branded merchandise, personalized gifts, or exclusive experiences—serves as a tangible expression of gratitude and encourages donors to feel more connected to the cause.

First, The Rules!

Selling a ‘product’ or ‘swag’ is often a bad idea because it complicates your 501 status and filing. Likewise, giving a high-value ‘gift or ‘swag’ in return for a contribution comes with its own IRS and donor issues because donors can only deduct the fair market value of the gift – the value of which you must disclaim – and your margins will likely be lower.

The goal is to provide a gift that meets IRS Rules as to the “Token Exceptions,“ and for which there is no need to tell donors the fair value amount, and allows them to fully deduct their contribution.

Rule #1:

The gift must bear your logo. The word logo is specifically used in the rules, but their have been IRS determinations evaluating logo to also mean “a substantially identifying mark,” which can be your website, or other “mark,” as defined by the United States Patent and Trademark Office.

Rule #2:

The contribution and gift must come as result of a fundraising campaign.

Rule 3#:

The exact dollar amounts of what constitutes "token" or "low-cost" must meet rules found in “IRS Pub 1771”. There are some silly complexities, but the rule is best understood as the value of the donation must be at least 5 times the value of the gift (what it costs the nonprofit to purchase, and this value does NOT include shipping costs, if incurred by the non-profit).

Let’s Do This!

For the purposes of this blog and your next awesome and IRS blessed campaign, we are going to design and offer as a gift a beautiful Christmas ornament that will cost us $2.25, for which five times would require a donation of $11.25, leaving a margin of $9.00

Now, that’s not nearly enough money to ask for, nor does it meet our campaign needs, so we are going bump that up to $20.00 per ornament -- not including shipping -- leaving us a margin of $17.75.   Or, we can ask for a $25 dollar donation, that INCLUDES shipping, and our margin will average to a slightly better $20.00.

First, we need to find an affordable and trustworthy SaaS drop shipping company for which we will rely on to customize, or double customize (because that’s the real value) tons of gifts for your donors.

I give you “Printify”, and 4Amanda.org “xMas Fighting & Remembering Campaign (we are not paid in any way by Printify; we just love them)!”

Look at the following two ornaments for 4Amanda.org.

Either of these ornament designs takes about two minutes to customize, order, and arrange shipping. Is that worth $20.00 to your nonprofit, especially at volume?

Could you gift an item that requires no customization and have it shipped with any data entry time? Yes, this can be in a fully automated pipeline if that's what you want to do, but you will be losing the novalty of customization.

Is that the only ornament? No; lots of shapes, sizes, and materials. Can we print on both sides on some of the ornaments? Yes, many options for both side printing, but you’ll need to recalculate your costs, fair market value, and margins. Are there color and image, and text options? Yes, of course.

What if it’s not cancer? Well, that doesn’t matter; choose any cause! What if we don’t want to use an Xmas approach? Cool, choose ton’s of other things besides Xmas ornaments!

How would we offer these as gifts?

Well, you could integrate or publish them to your website through Shopify, or Woo, or with a proprietary CMS.

Or, you could use an information page, form, and gateway as does 4Amanda.org. Their donation form integrates with Square, but you could use Stripe, PayPal, and dozens of others.

But let us think more about the personable and therefor impactful nature of this particular gift!

4Amanda.org is a cancer charity and those donating often know or have known someone very special to them that is fighting cancer or someone we have lost to the disease. This gift memorializes a loved one and commemorates a timeframe in all our lives that will be remembered every year, and for which monies will help others in their battle against cancer.

And that’s really what you want to accomplish with the gifts your nonprofit offers in recognition of donations. You want to provide the value of memories, the value of individual recognition, and the value of being part of your mission.

The same approach, albeit with varying vernacular and styling, can be utilized for child hunger, animal rescue, social justice, and so on.

Swag and gifts can be a lot of fun! Be creative, listen to your 'donors' as though they are 'customers,' and give them things they want.

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Need help with filings and documentation, help with technology in your nonprofit, or help with grants and donor outreach? Contact us today!