Nonprofit bartering for scholarships

Before the recession, Tony DelDotto leaned on his connections as a commercial real estate broker to raise money for the scholarships given away by his tiny nonprofit, Mind the Future.

But the ailing real estate market forced DelDotto to get creative. He'd always loved the story of Kyle MacDonald, the Canadian wonder-trader who in 2006 swapped his way from a single red paper clip to a white-sided house in Kipling, Saskatchewan.

So DelDotto launched the Big Trade Up -- a fundraising campaign where items of increasing value are traded until a final big-ticket item will be sold to fund 10 scholarships and hire an executive director.

"[MacDonald's] idea reminded us all that with enough creativity anything is possible," he said.

Since MacDonald's success, there have been several copycat traders. Most recently, a California teen had his 15 minutes of fame for listing an unwanted cell phone on Craigslist and trading up to a 2000 Porsche Boxster S in two years' time.

But other trade-ups have been charitable endeavors. A group of Ohio teens raised money for the Red Cross using the method, and a New Zealand man with a liver disease did the same to support a nonprofit that conducts medical research on auto-immune diseases.

The Mind the Future campaign started with a used No. 2 pencil donated by 16-year-old Frank Rypa of Minneapolis, the third student selected for a college scholarship.

"People love it. Everyone knows how hard it is to raise money in this economy," DelDotto said.

From online contests where individuals vote to support particular causes to cram campaigns that raise millions in a single day, the lingering economic slowdown is forcing charities large and small to become adventurous money-raisers. Charitable donations fell 3.6 percent in 2009 and 2.0 percent in 2008, according to the annual Giving USA report.

In Minnesota, four in 10 of the nonprofits participating in the Minnesota Council on Nonprofits' Current Conditions report said revenue from individuals declined in the first half of 2010.

The report also points out that small nonprofits tend to be hit harder than bigger organizations, because it is rare for them to have cash reserves and because they're so reliant on volunteers, another area where a nonprofit may see decreases in rocky times.

Mentoring teens

DelDotto and Mind the Future's current president, Chad Commers, picked college scholarships because they wanted to help kids have the same opportunities that they did as young people.

"The thought of a kid not having a chance purely because of his economic status is disheartening to me," DelDotto said. "Just having that mental image in your head that you are going to college, that by itself will take you there."

But with the tough economy and the program's time-consuming nature, shutting it down had been a very real possibility.

DelDotto and Commers hope that the Big Trade Up will raise $250,000 to fund ten $10,000 scholarships and a paid executive director for two years.

The swaps started between family and friends. The pencil for a reusable shopping bag. The bag for some soup bowls. Then word-of-mouth, Facebook, Craigslist and bigtradeup.com helped keep the momentum going.

There were a few times when DelDotto thought the trades were done. Like the Country Music Association Festival package that just sat there until a flash flood in Nashville converted it to cash value.

"Then all of a sudden out of nowhere, something new happens.... Everybody seems to be pulling together and coming up with creative ways to make things happen, and that collective energy certainly helps propel new trades," he said.

Kim Snyder, principal of fundraising strategy firm Excelsior Bay Group, said organizations sometimes neglect to turn fundraising gimmicks like the Big Trade Up into sustainable strategies. "They just get a donation and move on and sort of focus on acquisition instead of really converting people from one-time donation giver to donors that will support and sustain the organization over the long haul," she said.

Catering for a car

Jerry Kane was watching the news one night when the muscle car enthusiast and owner of Kane's Catering in St. Paul learned about the project and saw Trade No. 17 -- a smokin', two-toned 1972 Gran Torino -- flash on the screen.

Plus he liked the idea of owning a Gran Torino without having to buy one. So the muscle car enthusiast sent an e-mail at midnight offering a catered wedding for 250 people worth $21,000 in return for the car valued in the $10,000 to $15,000 range. By 8 a.m. he had a reply, beating out a dump truck, $20,000 worth of die-cast model cars and a trade of several vacation time shares.

Today several other vendors have signed on, adding a hot air balloon ride, rings, dresses and more to the Big Wedding Package valued at close to $54,000. DelDotto said there have been some discussions about what trade No. 18 will be, but nothing is firm yet.

In an e-mail, Kyle MacDonald of red-paper-clip fame said that once a trade enters big-money territory, finding the next trade is "somewhat" harder because "it takes certain people out of the game." But he also pointed out that higher trades tend to generate more media attention and buzz, "resulting in amazing trade offers."

Even if a more valuable trade doesn't materialize and they have to sell the wedding package on eBay for a discount, DelDotto said the experience would be a win.

"Even if we got 50 percent of the value, it would still fund a couple of scholarships and be an overall success."