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Girl Scouts Launch Cookie Sales Drive; Other Nonprofits Seek Revenue, Too

Posted on: Tuesday, 17 January 2006, 21:00 CST

By Debbie Kelley, The Gazette, Colorado Springs, Colo.

Jan. 18--If you haven't already gotten the sales spiel for Girl Scout cookies, you undoubtedly will. This year's effort kicked off Saturday, and it's hard to escape the doorbell, grocery store booth or solicitation at work.

Girl Scout cookie sales, which totaled 199 million boxes in 2005, have been part of Americana for so long (they started in the 1930s) that it's easy to overlook the underlying premise of the business transaction: nonprofits operating profit-making ventures.

"It's becoming more of a trend in the nonprofit sector to have taxed, earned income that's not a donation or tax deductible," said Charley Shimanski, president and chief executive officer of the Colorado Association of Nonprofit Organizations.

The retail movement has grown because when the economy is down, so are contributions -- but demand for many nonprofit services increases. Thus, "Having retail activity helps nonprofits offset declining contributions," Shimanski said.

Some nonprofits sell products for a short time each year, and others decide to make retail sales a permanent setup.

But when nonprofits take on the persona of for-profits, they also take on the headaches. Market downturn has led to a painful business decision for Cheyenne Village Inc., which helps adults with developmental disabilities secure employment, housing and transportation.

The organization's 17-year-old antiques and collectibles consignment storefront in Old Colorado City, The Villagers, will close Feb. 18.

"The shop contributed funds to our programs with varying degrees of success, until the last four years, which have seen steadily declining sales," said Ann Turner, executive director.

Cheyenne Village has leased space in a busy shopping district, tucked in between gift shops and restaurants, paying normal business expenses of rent, phone, utilities and insurance. Over the years, the store has worked with more than 300,000 consignors and competed with for-profit antique dealers.

"There's no difference because we happen to be a nonprofit when you're running a store. We have to compete like any other business," Turner said.

Nonprofits do have a few advantages. Forty volunteers have staffed The Villagers, which saved on wages and benefits.

As another expense-reducing measure, many rely on donated merchandise from individuals or even for-profit businesses.

Ace Hardware, Lowe's Home Improvement Warehouse, Kwal-Howells Paint and Rustic Floor Covering are among those donating damaged or discontinued building materials to the fledgling ReSTORE business benefiting Pikes Peak Habitat for Humanity.

Merchants are willing to help for the same reason that customers may be swayed to spend their money at a nonprofit store: the money is going to a good cause.

"We've been fortunate to be in business for 30 years, and we like to give back to the community," said Mike Wetta, owner of Rustic Floor Covering, which donates carpet, vinyl, tile and area rugs.

ReSTORE banks on Habitat's reputation for building homes for people in need as a selling point.

"We have an advantage of being well-known. Everybody wants to be a part of Habitat," said store manager John Veteto.

Located on South Wahsatch Avenue, ReSTORE has expanded and now occupies 12,000 square feet brimming with recycled light fixtures, kitchen cabinets, carpet, lumber and other building supplies. Veteto said sales are increasing, with this year's projected net income at $100,000.

Second-hand stores have become lucrative for many nonprofits. The nation's 2,054 Goodwill Industries thrift shops realized 12.5 percent growth in 2005, said Laura Marth, spokeswoman for Goodwill Industries of Colorado Springs.

Eight regional stores generate about one-third of the organization's $34 million annual operating revenue, she said. Ninety-two percent of store revenue supports the organization's work of helping people with disabilities.

"Everybody appreciates a good bargain," Marth said, "and we've created an upscale shopping experience at significantly discounted prices."

Stores run by nonprofits often promote cost savings to attract shoppers. ReSTORE's merchandise is discounted up to 70 percent off retail, Veteto said.

The Bargain Box, a thrift shop that opened 26 years ago in downtown Colorado Springs to support Assistance League projects benefiting local children and families, is known for its good buys, said Joyce Hammons, chairman of the store.

"We get a lot of new items donated, which in the last several years has made the store more successful," she said. Sales at the Bargain Box total about $100,000 annually, 98 percent of which buys new school clothes for 2,700 children each year.

Growth is leading the organization to expand its retail activity. The Assistance League is in the early stages of buying a larger site, with plans to build a thrift shop twice the size of the current store at 211 E. Costilla St.

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Copyright (c) 2006, The Gazette, Colorado Springs, Colo.

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Source: The Gazette

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