On March 18, 2009, Giftco Inc. did not receive their bank financing as was forced to close their doors at 12:00 p.m. Since 1975, Giftco Inc. has been the leading supplier and importer of goods to the fundraising industry.
As of our correspondence on March 18, there are no employees working at the company and their offices were closed abruptly. What is clear is that without the bank financing in place the company cannot remain in operation.
While Giftco was not a household name, the impact on the fundraising industry will be felt nationwide. Giftco created, manufactured and warehoused many items sold to the fundraising industry. Over 95% of fundraising companies will be affected in one way or another.
The consolidation of the fundraising industry has been happening for years and we have witnessed a dramatic consolidation in just the last few years. 10 years ago, there were approximately 1200 fundraising companies - today less than 250. With the news of Giftco closing, we will likely loose an additional 150 or more.
As I write, I realize how fortunate Believe Kids is. We have been very concerned about this consolidation and insulated ourselves approximately 2 years ago. We increased our products with US manufacturing, imported our own products and diversified our catalog to source from numerous vendors. We will not miss a beat.
Our hearts go out to the many employees, vendors and companies affected by the news. This is a difficult time as many find themselves out of work. We anticipate some strong partnerships forming soon and we hope everyone finds a way to make finding new employment as smooth a transition as possible.
---------------------------------------------------
What does this mean for other fundraising companies?
---------------------------------------------------
Right now, it is hard to say how exactly fundraising companies will take this news. Nearly all fundraising companies sell products from Giftco that may not be available for sale. Really, it is too early to tell what will happen but we predict that many companies will no longer be able to offer their product fundraisers this year. Unfortunately, others will close altogether. We predict that a few companies; Like Believe Kids; will favorably respond and help shape the future of fundraising.
----------------------------------------------------
How does this news affect schools and parent groups?
----------------------------------------------------
It will be important to check with your fundraising company to see how they will be dealing with the situation. Again, it's too early to say what the right way to look at this is but what is certain is that these times are ripe for mis-information and schools will be told half-truths in order to get business.
Regretfully, some companies will use this as a marketing tool which we feel is negative selling. Basically, selling on fear. (side note - we would be interested in knowing who is willing to do this type of sale so please report back if you notice anything). We believe that companies will work expecially hard to make the best of the situation so that schools, groups and end customers do not notice any changes.
For companies that sell a lot of items from Giftco will have a difficult time. Find out how your fundraising company plans to handle things and go from there. We will certainly introduce new information when it comes available but any pto, pta or ptsa parent group with questions can contact us anytime. We will let you know what we know without pretense.
---------------------------------------------------
How does this news change the fundraising industry?
---------------------------------------------------
We know that 10 years ago, anyone who wanted to could get into the fundraising world. Right now, the economy has taken it's toll on quite a few fundraising companies and offerings. To make a long story short, it looks like the industry now has a very high barrier to entry. Anyone wanting to be involved will need a lot of resources and because the industry gives so much profit away, anyone considering fund raising may choose to enter a different industry. There may be more consolidation as the economy takes it's toll.
-------
Summary
-------
Giftco has helped the fundraising industry grow over the years so this news is very sad to all of us involved. Our industry is rather close and so our thoughts are with the numerous employees we have counted on to make us look good over the years that are now without a place to call home.
We know that we can move on making the best of it and yet, it feels like the entire fundraising industry has lost a great mentor.
--------
What Now
--------
We will update this as any new information becomes available. In the meantime, if any PTO, PTA, or a fundraising company affected by this news and would like to discuss opportunities or have questions answered, we are here to help.
Label - NEW GOODY'S GIFTCO, LLC
