Thursday, January 6, 2011

Charity Begins at Home

A recent printer’s email was lamenting the fact that non-profit organizations were always beating on him to lower his prices. He was complaining that because they were “non-profit” he felt obligated to provide a lower price because they weren’t in the business to make money.

I have to disagree. Being a non-profit organization means that an organization does not distribute its surplus funds to owners or shareholders, but instead uses them to help pursue its goals. The organization is also exempt from paying some local, state and federal taxes. It doesn’t mean the organization is poor or that its employees work for free.

In a new book entitled Death to the BCS, the author studied tax records of bowl organization for college football’s end of the season wrap up and found that nearly two dozen bowl directors earned more that $300,000 a year. Most of these organizations are non-profit organizations. I wonder how many printers “donated” printing to their local bowl game?

Of course, there are some organizations that work with volunteers and need the community support from local businesses to do their good deeds, but too many printers believe that any organization that is non-profit has to get a special deal.

It is easy to find out if a non-profit organization really needs help. Most state governments keep records about non-profit groups that show how much money and services really make it to the cause in need. You can also check out legitimate organizations at The Guidestar site gathers and publicizes information about nonprofit organizations. Visitors to the site can even access an organization’s IRS Form 990. This is an annual reporting return that certain federally tax-exempt organizations must file with the IRS. It provides information on the filing organization's mission, programs, and finances. You can even find out how much the organization spent on printing for that tax year.

Discounting is just another way to avoid having to do the hard work of getting out and talking to customers and asking for the order. Discounting might be a selling strategy if the printer was making money and could afford it.

One of the main reasons that printers are going out of business is that they don’t charge enough. I see print owners working 60 to 70 hours a week and still not making any money. They use price as their selling tool and figure the only way to get new business is to be the cheapest vendor.

Non-profit organizations can be top customers for printers. If you are going to discount to a non-profit organization, make sure you still make a profit. A non-profit organization can provide enough printing on a regular basis that a printer could adjust prices because of the large volume of steady work.

If you are going to discount to a non-profit organization, make sure there is something in it for you. You can offer a lower price if the non-profit organization will guarantee a certain sales volume or a certain volume of work.. Don’t lower your price unless the customers is going to give you something in return.

I recommend that every printer be a good neighbor and help sharable organizations when they can. But remember, charity begins at home and we can’t help our neighbors if our house isn’t in order.

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