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What is sales fundraising and why is it so powerful?

Sales fundraising is everywhere and although it’s been happening since the eighties, in 2022 it is more meaningful and powerful than ever.

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In the last few years there has been a rise in ethical consumerism, and a massive leap in social enterprise. And as we announced in our recent research Unlock The Power Of Sales Fundraising, alongside this, there has been huge, exciting growth in the number of small and medium enterprises who are embedding sales fundraising into the heart of their business.

From 2020 to 2021, we saw a 60% increase in businesses launching sales fundraising campaigns.

But what exactly is sales fundraising?

It's simple: sales fundraising is a form of charitable giving which happens when a business - small or large - raises money for a charity and donates a portion of the sales of a product or service e.g 10% from the sale of a t-shirt or 10% from monthly invoices.

Before the friendlier term ‘sales fundraising’ was introduced by us at Work for Good, it was better known as ‘cause-related marketing’, a phrase first coined in 1983 by American Express when they were raising money for the Statue of Liberty’s restoration.

Cause-related marketing is associated with corporate and charity partnerships and happens when a business supports a charitable cause or issue and receives marketing benefits from it.

As time went on more corporates started to partner with charities and introduce cause-related marketing into their strategies. And in the 1992 Charities Act, a legal agreement was introduced called a Commercial Participation Agreement (CPA) to protect charities and businesses (read more about the importance of a CPA here).

The 2022 business landscape is very different from the 80s and cause-related marketing is a term that does not fit with the growing number of SMEs who put purpose alongside profit.

Sales fundraising alongside ethical and socially impactful business is growing.

“I’ve always believed it’s not governments that will change the world, it’s businesses." - Holly Tucker, MBE

Times have changed, with the rise in conscious consumerism, B Corps and social enterprises, it is no longer that business exists just because they only care about the money they make.

Like nonprofits, many businesses are now created to make a positive difference and find more socially impactful ways to make a change. For example, during the pandemic, there was a record-breaking rise in new social enterprises and there are now 100,000 social enterprises in the UK, contributing £60bn to the UK economy.

And it's not just social enterprises, in general, SMEs (sole traders to medium-sized enterprises) are finding ways to embed social impact into the heart of the business. And if you consider that there are 5.5 million SME's in the UK, making up 99% of UK businesses, that makes for a powerful community that collectively has the potential to make a big difference.

Furthermore, the drive for every type of business to make sure they are making a positive, social and environmental impact is underpinned by consumer expectation.

In 2021 Deloitte found that ethical and sustainability issues remain a key driver for almost a third of consumers, who claim to have stopped purchasing certain brands due to related concerns. However, they also found that consumers want businesses to take the lead and provide ethical solutions. Businesses of all sizes must therefore continue to find ways to show consumers that they are socially and environmentally responsible.

By fundraising for charity through their sales and turning the work they already do into good, the very smallest to the biggest corporations, can ensure they are making a difference.

Collectively small businesses and social enterprises are already making a difference and as socially impactful business grows, so can sales fundraising. It’s now that charities can seize the opportunity and open the door to its impact.