Selling groceries might keep our stores in business, but giving back to our community is at the heart of what co-ops do. Whether it’s collecting donations for the local food shelf or handing out bananas at a 5K run for charity, it’s important to budget both time and money for different forms of community giving. NCG’s 2018 consumer research indicates that shoppers expect co-ops to champion causes like hunger/food access, food/agriculture, local neighborhood issues and the environment. This can help inform co-op donations and community involvement

“Round up” at the Registers

Although technically a “pass through” donation and not a direct co-op donation, this program reaps big rewards for community nonprofits and reflects favorably on your store. The most successful programs (like Seward Co-op’s SEED program) allow shoppers to round their transaction totals up to the nearest dollar, or add any amount to their total. Keys to success:

• Changing out recipient organizations monthly and educating cashiers in advance.
• Clear expectations for cashiers, agreed upon between marketing and operations, to ask every customer if they wish to round up.
• Keep a running monthly total somewhere, visible from the registers.
• Each month invite the organization to come in and receive a giant check (and a real check); invite cashiers who helped raise the money. Share the moment via website, social media and/or press release.

BYOB Donations

Even 100 percent recycled grocery bags use resources and cost money, so why not reward shoppers who bring their own shopping bags? Keys to success:

• Budget for this expense. The marketing or paper goods supply (bags) budget typically covers this donation.
• Determine recipient organization, or allow shoppers to choose from options. If allowing shoppers to choose, position options away from the registers. Dropping a token or bean into a jar allows kids to participate in giving and feels more ‘real’ than a virtual give, but requires someone to count the beans each month! Limit choices to three for best results.
• Consider earmarking a specific donation amount each month and have shoppers who bring bags vote to determine how to divvy up the donation. For example, “We’re donating $1,000 this month! Bring your own bag to choose which organization benefits.”
• Try to match your competitors if donating by the bag (5-10 cents is common).
• Reward programs are generally preferable to bag fees, but be mindful of any local requirements to charge for bags as they may restrict BYOB donation programs.
• Keep records! Check out how La Montanita Co-op shares their impact.
• Require that recipient organizations spread the word about your donation through their communication channels, such as an e-newsletter or on their website.

Cash Donations

There will never be a shortage of community organizations asking for donations! Follow Alberta Co-op Grocery’s example and make applications available on your website and at a service desk, with clear criteria for eligibility and timelines for processing. Other keys to success:

• While applicants often ask for gift baskets or catering trays, gift cards allow recipients to purchase exactly what they want, or they can use the gift card itself as a prize. Include a sticker, newsletter or brochure with the gift card and a “Donated by (your co-op’s name)” sign for the recipient to display at events.
• Pick a standard unit of $25-$100 for the gift card value for easy budgeting each month. Work with your accountant to determine if these gift cards should be treated as marketing expenses (likely) or deductible donations.

Patronage Refund Donations

Instead of issuing patronage refunds as paper checks, most co-ops’ POS systems allow them to issue a refund as an electronic store credit to be used for groceries, a cash refund or a donation. Depending on your bylaws and state or incorporation, you may be able to donate unclaimed patronage refunds after a certain period, check with your attorney. This is a great opportunity to publicize your giving and highlight cooperative business practices!

Donations Reflect on Your Store – Choose Carefully

For all donation programs, remember that the receiving organization will reflect on the co-op’s brand. Clearly define which organizations are eligible to apply and what criteria are considered – it may vary by type of donation. For example, you might allow churches to apply for gift cards for fundraisers but you wouldn’t choose a religious organization for a highly visible BYOB donation program.  

Contact David Waisman, Finance Project Manager, with accounting questions related to donations.