Whether at garage sales, bake sales, car washes, book fairs, or elsewhere, most Americans old enough to have a piggy bank have either bought or sold something on behalf of a charitable organization or nonprofit. Selling goods and services is particularly valuable for small nonprofits such as schools and churches, in order to attract support from outside their membership.
Let's look at both the practicalities and the legalities of selling goods.
It's perfectly legal for a nonprofit group to sell goods at a profit; even an exorbitant profit, if you can get buyers to go for it. The only limitations are the IRS requirement of 501(c)(3) groups that their sales activities not take over the purpose of the organization and your nonprofit's willingness to pay some taxes on the profit (only under certain circumstances). For details, see Tax Concerns When Your Nonprofit Corporation Earns Money.
It gets a little more complicated if you introduce a game of chance, such as a raffle or rubber duck race, into the scenario. You'll need to check your state's law on whether such games are legal, and if so, whether the nonprofit needs to get a permit before proceeding. (See Special IRS Gambling Rules for Nonprofits.)
Fundraising sales work best if you have:
Many nonprofits' sales efforts fall down when it comes to marketing. It's easy to think, "Everyone will sell some to their friends!" But will they really follow through? Ask questions ahead of time, and get actual commitments as well as estimates of numbers.
To predict whether your sales plan will work, figure out your likely:
No matter how great your items to be sold might be, you've got to have someone doing the selling, or showing up to wash the cars, sit in the booth, and so on. A group training can be a good start, where you cover the following important issues.
Build some buzz around your sale, with signs, advertising, and email notifications. When drafting emails, do so with the idea that your emails might—and hopefully will—be forwarded, to people's friends, relations, and so forth. Provide enough explanation of your group, and how sales of your product will help it, that even Grandma in Peoria will get enthused enough to buy.
A variety of companies seek to make the organizing process easier (and make a nice profit themselves) by having nonprofits sell candy, wrapping paper, popcorn, wreaths, gifts, tchotchkes, and so on, under their auspices.
In the words of one volunteer parent, "It can be such a game with these vendors, many of which make a ton of money off of nonprofits. A few seem downright exploitative, like one magazine company that pestered our buyers to renew their subscriptions until eternity, and sold their names to mail order companies. But I have to say, if you find the right kind of company, it solves a lot of problems for you—providing food that meets health code requirements, helping deal with tax rules, providing slick flyers and websites, and all-around making it easy to orchestrate the sales process."
Ask around to get recommendations on companies, choose a product that won't have people rolling their eyes, and look carefully at your profit percentage.