National Scrip Center Will Pass Full Discounts Through to Customers

This business innovation will simplify and revolutionize scrip fundraising.

SANTA ROSA, CA (PRWEB) November 8, 2003 -- National Scrip Center (NSC) announced that beginning November 12, 2003 it will pass through to its customer nonprofits the full discounts for gift cards and gift certificates those charities use for fundraising.

Some people will immediately ask how we can do this," said David C. Carrithers, CEO & President, NSC. What weve done is critically scrutinized the cost of doing business and developed a sustainable model that reflects what we do. The core of our business is negotiating discounts with merchants and processing cards and certificates. From our perspective, it shouldnt matter whether a nonprofit purchases a $2 ice cream certificate or a $50 retail store card, the process is the same."

Therefore, our costs will be recovered via a fee assessed per gift card or certificate. For example, if a charity buys 1,000 gift cards from NSC, they will be charged a fee of $.15 per card or $150 and they will receive the card at the full discount NSC receives from the merchant, which ranges from two to 50 percent. In this example, if the merchant gives a 10% discount on those 1,000, $50 cards, thats $4,850 to the charity. Were calling this the GivingMore program, because thats exactly what were hoping it will do. We estimate that this new approach will give back an additional $10 million dollars to charity each year", said Carrithers.
           
NSC is a nonprofit organization that helps schools, service clubs, charities and other nonprofits raise necessary funds by providing innovative fundraising products, programs and services. During its 15-year history, NSC has processed more than $2 billion in gift card and gift certificate sales. It has helped more than 15,000 nonprofit organizations nationwide raise more than $183 million net in critical funding.

Despite all the great things NSC has accomplished, it has become under-capitalized," according to Carrithers. Especially since it is a nonprofit company, NSC cannot operate with liabilities exceeding assets. To produce adequate working capital we must build our costs plus a small reserve into a reasonable fee structure that makes sense for our customers."

Until now, NSC has kept a small percentage of discounts and passed on the remainder to the customer charities. For example, if the total discount was seven percent, NSC retained one percent and the customer charity could earn six percent. The danger in that business model was that many of the highest volume merchants gave the smallest discounts and NSC could not retain enough of the discount to break even. In some cases, every certificate processed cost more than it returned. Also, many of the merchants demanded cash up front and volume purchases of their scrip. This not only added to NSCs operating costs, it also caused confusion, inventory management nightmares, significant swings in revenue, and backorder problems. The more NSC grew, the more difficult it became.

Why had the business structure worked in the past?

It never worked," Carrithers continues. Some factors obscured balance sheet reality. For one thing, until NSC amicably severed ties with the Diocese of Santa Rosa in July 2001, the company had access to a substantial off-the-balance sheet de facto credit line."
             
After that, the company had to fund its operations using the float between the time it was paid by customers and the time it paid merchants. Faced with challenges this year, NSC underwent a thorough audit of its financial practices and the core business model. As a result, the companys management team has developed an entirely new business model to simplify and strengthen the business for NSC and for its customers.

Were committed to service and stewardship," says Carrithers, and we would not be good stewards if we continued to try and operate with negative working capital. As the auditors told us, we were 'performing a high wire act with no safety net. The company could not go on that way. To continue to serve, NSC must thrive."

Based on customer needs, desires and the mission of this company, NSC will introduce this new way to offer services for all types of nonprofit organizations and their fundraising needs. By launching the first program in the scrip industry to pass the full merchant discount through to the nonprofit organization, NSC will bring clarity and simplicity into what has been an increasingly complex industry! Now the costs for NSC to run its business will be upfront and translated into a per card or certificate processing fee. This new model is a win for the charities, the merchants and NSC.
                        
About NSC:
Based in Santa Rosa, Calif., National Scrip Center (NSC) is a nonprofit organization that helps schools, service clubs, charities and other nonprofits raise necessary funds by providing innovative fundraising products, programs and services. During its 15-year history, NSC has processed more than $2 billion in gift card and gift certificate sales. It has helped more than 15,000 nonprofit organizations nationwide raise more than $183 million net in critical funding. NSC is unique in offering a complete line of gift certificate and gift card products, a comprehensive selection of merchants and multiple communication channels to customers.

Contact Information:
www.nationalscripcenter.org
1-800-538-1222

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