Handsome cards turn handsome profit for UNICEF relief work
Most companies would be ecstatic over a 20 percent profit margin. But one multinational seeks and often attains a 50 percent return. The ''company'' is the greeting card subsidiary of UNICEF. Last year, this nonprofit arm of the United Nations pulled in $50 million by hawking 115 million cards. The funds support children's relief work throughout the world, including troubled Lebanon and Chad.Skip to next paragraph
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Of course, UNICEF has some unique business advantages: no advertising costs, a product welcomed worldwide, and some 50,000 unpaid but highly motivated workers.
Marjorie Porosky is one such worker. She has peddled UNICEF cards for 10 years. During the holiday season, she plants her display tables between the salad bar and convenience counter at the Stop & Shop supermarket in Salem, Mass. The store manager gives her the space, and it pays off handsomely for UNICEF. In two months, Mrs. Porosky made most of the $12,000 she contributed last year. This year's gross earnings will top that, she believes.
''People are out of the recession mode,'' affirms Glenda Wilson, director of UNICEF's US committee for greeting cards and gift program. Mail orders (which accounted for 55 percent of sales in 1982) are up 10 percent, but it's too soon to tell how volunteer sales efforts are doing. Nonetheless, the current retail surge bodes well for UNICEF.
American Greetings, the largest publicly held card manufacturer, expects a 15 percent boost over 1982's year-end sales.
One would think UNICEF's competitive advantages might irritate commercial card retailers. UNICEF has artwork donated by artists and museums from around the world, an underpriced product, and occasionally free direct mailings (a local bank sent out 20,000 stuffers in Mrs. Porosky's area). Also, UNICEF has distribution points that are often closed to profitmaking card companies. Besides grocery stores, bank lobbies, and sidewalk stands, UNICEF cards can be purchased in Europe from bank and post office tellers.
Gary K. Smith, of the US National Association of Greeting Card Publishers, says there's no animosity, simply because ''greeting cards beget greeting cards.'' And he says, ''UNICEF is not only a fine charitable organization, its quality products reflect well on the entire industry.'' Or perhaps it's because UNICEF bites off less than 1 percent of the total market.
In any case, some retailers that carry UNICEF cards even say the nonprofit ''competitor'' enhances business.
Bill Montague has a gift shop in Concord, Mass., and figures that for many customers, UNICEF put him on the map: ''People that buy UNICEF cards will go to the ends of the earth to find them.''
He sold $6,500 worth of cards last year and took the 10 percent cut that UNICEF allows to cover costs (retailers usually get 50 percent on commercial cards). He didn't make money on the UNICEF cards, but he remarks, ''People spend thousands of dollars a year on advertising. You can't buy the kind of goodwill this generates. It is really free advertising.''
UNICEF does generate more than goodwill and greeting card sales. For 37 years it has been giving aid to underprivileged mothers and children of the world. The - including those of 130 governments - brought the total budget to $378 million last year. Funds were spent on emergency food, water, and shelter for children in the war-ravaged countries of the Middle East and Africa. UNICEF also supports ongoing child health and nutrition, water sanitation, and education programs.
Because of the nature of its mission, UNICEF sells cards in parts of the world where it's unprofitable. In Europe, it makes a clear 50 percent profit on every card sold. But cards are sold in some developing countries not so much to generate income as to create name recognition.
Despite all the economic advantages inherent in the setup, there are problems. As with any multinational, the strong dollar eats away at overseas profits. Sales in Europe pull in 70 to 75 percent of the total greeting card revenues, according to Ejgil Christensen, director of the greeting card operation. But last year the exchange loss reached $6 million.
And while the dedicated volunteer sales network is invaluable, it can be a handicap, laments Marianne Balazs, head of marketing. ''One of our biggest problems (in the United States) is that people don't know where to purchase the cards year to year. We would love to have some kind of national or regional chain - a store, a bank, anything - so we could say, 'Go to your local blank.' '' In Canada, the Safeway Stores grocery chain carries the cards. Ms. Balazs is trying to arrange a similar setup with a US grocery chain. Until then, a toll-free number (1-800-228-1666) to the New York headquarters must suffice.