The I Do Foundation S Charitable Wedding Services Venture

The I Do Foundation’s Charitable Wedding Services Venture

The I Do Foundation’s Charitable Wedding Services (CWS) venture develops powerful cause-related marketing programs for major wedding retailers that generate greater revenues for retailers while capturing a percentage of wedding sales for charity. Intense retailer competition, high product margins, and high couple spending in the $70 billion wedding industry create a unique and lucrative market opportunity for CWS’s cause-related marketing programs.

CWS already has proven the potential for its cause-related marketing services through pilot programs with major national retailers. CWS has the opportunity to expand these successful pilots to national programs for its retail clients. Over the next three years, CWS will generate over $18 million in charitable donations for charitable organizations across the country.

CWS helps major retailers develop Charitable Registry Programs through which stores offer to donate a percentage of registry spending to charity. With each gift purchase raising donations for charity, a Charitable Registry Program creates powerful incentives for higher gift spending and provides stores with a compelling sales tool for attracting bridal customers.

CWS has conducted successful online pilot Charitable Registry Programs with 9 major stores (including Target, JC Penney, and Linens ‘n Things) and 500 couples. Retail clients experienced increases of 40%-60% in spending on registries in the pilot and over half of the stores raised their donation rates. CWS is now poised to expand to develop in-store program integrations for retail clients and has set the following goals for 2004:

1. Close online pilot program contracts with 1-2 new retail clients (2 new clients already closed).
2. Begin first Regional Store Integrations of the Charitable Registry Program for 1-2 clients.
3. Extend CWS’s cause-related marketing services to national bridal boutiques and florists.

CLIENT PHASE 1: CLIENT PHASE 2: CLIENT PHASE 3:

Over 2.4 million couples get married each year spending over $70 billion at their weddings. Of those couples, 91% register for gifts, generating $19 billion in gift registry spending annually. With almost $30,000 of spending at the average wedding, bridal customers represent one of the most coveted market segments in the retail industry. Retailers view bridal registries as the perfect opportunity to begin a life-long relationship with a couple.

The once-in-a-lifetime aura of weddings lowers engaged couples’ price sensitivity, allowing vendors to garner extremely high sales margins and fueling intense competition for customers. With retailers constantly seeking compelling sales tools for their bridal services, the wedding industry presents the perfect opportunity for CWS’s cause-related marketing programs.

• Increased Registry Purchases: Charitable Registry Programs encourage couples to inform their guests about their registry and motivate guests to buy from the participating retailer.
• Compelling Marketing and Sales Tool: Charitable Registry Programs are a powerful customer acquisition mechanism for stores that are constantly seeking to differentiate their registry services.
• Positive Public Relations Benefits: Charitable Registry Programs create numerous opportunities for retailers to brand themselves in the media as good corporate citizens.

CWS seamlessly integrates the Charitable Registry Program into retailers’ existing bridal services. CWS provides retailers with a streamlined service package that includes:

1. Program Setup Consultation
2. Technical Systems Integration
3. Customer Support
4. Associate Support and Training Materials
5. Donation Management and Disbursement

The retail clients manage all ongoing program materials development, associate training, and program promotion, which enables CWS to avoid costly integration and maintenance expenses.

CWS’s experienced and passionate management team has worked closely with its advisors to develop a highly specialized product for major wedding retailers. Key competitive advantages include a solid first-mover advantage, established nonprofit partnerships, a robust technical infrastructure and an existing public relations platform. The most likely competitive threat to CWS comes from the retailers developing in-house Charitable Registry programs. CWS will capitalize upon scale advantages and growing brand legitimacy to keep retailers from undercutting the venture.

Peter Murray – Executive Vice-President – Founder and former President of a Philadelphia-based business development center with over 20 staff; Co-founder of the I Do Foundation; strong wedding industry knowledge/contacts and a proven sales record with major retailers.

Larry Miller – Director of Technology – Former project manager for DigitalWave, CDNow, and Aquent Consulting; has lead the Foundation’s technology team for over two and a half years.

In addition, the Foundation’s Executive Director, Bethany Robertson, and several board members are heavily involved in leading the CWS venture. CWS will hire five additional staff members over the next year, including a CEO and Sales Director.

CWS’s revenue structure centers on service relationships with retail clients. In addition to the donated percentage of sales, retailers pay a 1% fee to CWS for program support and donation management. These fees are the sole revenue stream for CWS (100% of the retailers’ donations go directly to couples’ selected nonprofit organizations).

As a targeted and simple cause-related marketing service, CWS maintains a streamlined cost structure – the majority of CWS’s expenses come from salaries for sales and program integration staff and an experienced CEO. To date, CWS has raised $163,000 ($93K on hand) and requires an additional $220,000 before becoming cash flow positive in the summer of 2005.

Summary Projections

FY 2004 / FY 2005 / FY 2006
Management Fee Revenue* / $68,330 / $1,183,200 / $1,635,075
Cost of Sales / $39,860 / $1,041,515 / $1,450,845
Operating Expenses / $235,058 / $761,179 / $1,134,882
EBIT ($ in thousands) / ($195,198) / $280,336 / $315,963
Operating Margin / NA / 24% / 19%

* Only includes the 1% management fee paid by stores, not the donations made to nonprofits

Charitable Donations Raised by CWS

FY 2003 / FY 2004 / FY 2005
$438,340 / $7,594,050 / $10,449,900

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Charitable Wedding ServicesBusiness Plan

Business Description

I. OVERVIEW

Charitable Wedding Services (CWS) helps major wedding retailers develop cause-related marketing programs that enable retailers to increase customer spending and attract new bridal customers while generating resources for charities. Over the next three years, CWS aims to enable 3-5 major retailers to develop Charitable Gift Registry Programs in stores across the country. In addition, CWS will expand its cause-related marketing program into the floral and bridal gown markets, serving at least one bridal boutique chain and one major florist company by 2006. Over the next three years, these programs will raise over $18 million in charitable donations. CWS is a revenue-generating project of the I Do Foundation, a national nonprofit organization dedicated to encouraging charitable giving through weddings.

I Do Foundation History

The I Do Foundation is a Washington, DC-based nonprofit organization founded in 2001 to encourage charitable giving at weddings. Working with national media sources and wedding industry leaders, the I Do Foundation educates engaged couples about opportunities to have a socially-conscious wedding. The Foundation has developed an online system that enables couples to select donations in place of traditional wedding gifts and provides grant management and donor services. Couples can also create charitable guest favors, where the couple makes a donation in honor of each of their guests in place of traditional wedding favors.

While the Foundation’s media and online efforts have been extremely well-received, the real opportunity for social change within the wedding industry lies in capturing a share of the $70 billion spent on items ranging from wedding dresses to gift registries. In recognition of this opportunity, the I Do Foundation began developing the CWS model in 2002 in an effort to apply cause-related marketing strategies to the wedding industry.

The CWS program is closely aligned with the I Do Foundation’s mission, and the income earned will contribute significantly to the long-term sustainability of the organization. In addition, the program will greatly increase traffic on the I Do Foundation website, creating opportunities to encourage couples to use the Foundation’s other charitable wedding services.

The Creation of CWS

CWS replicates the successful charitable wedding registry model pioneered by The Wedding List, a retailer purchased by Martha Stewart in 2002 with stores in NYC, Boston, and London. During the two years in which this program was offered, the Charitable Registry program was an enormous success for The Wedding List, increasing registry purchases by up to 50% and creating a powerful tool for attracting new couples to register with the store.

After Martha Stewart bought the The Wedding List at the beginning of 2002 (The Wedding List folded soon thereafter), the I Do Foundation contacted Gregg Renfrew, The Wedding List’s former CEO, to assess the possibility of replicating the innovative model with other major retailers. Working closely with Ms. Renfrew and other wedding industry advisors, the I Do Foundation reached out to retailers across the country to develop pilot Charitable Registry Programs through the I Do Foundation’s website.

After securing donation agreements with several major retailers, the I Do Foundation created the technical infrastructure and web interface to conduct online pilot Charitable Registry Programs for each retailer. In the second half of 2003, the I Do Foundation worked with 9 retail clients to create Charitable Gift Registries for over 500 couples. These retail clients experienced increases of 40%-60% in spending on registries in the pilot, and over half of these clients have already raised their donation rates. In the first three months of 2004, the I Do Foundation has added two new retail clients, Marshall Fields and REI, and has created Charitable Registries for an additional 400 couples.

Building on Success: Expanding the CWS Pilot Program to Retailers’ Stores and Websites

The mission of CWS is to integrate charitable giving programs into retailers’ existing in-store and online wedding services. In the pilot phase, the Charitable Registry Programs are run through the I Do Foundation’s website. CWS’s growth model is predicated upon integrating Charitable Registry Programs into retailers’ stores and websites in order to capture couples at these points of sale.

CWS has conducted online pilot programs through its website ( for major national retailers including Linens ‘n Things, Target, JC Penney, Ross-Simons, and Kitchen Etc. These online pilot programs have enabled the I Do Foundation to streamline its systems for couple services, donation management and disbursement, and store interfacing.

In the fourth quarter of 2004, CWS will build on the pilot programs to begin the first in-store Charitable Registry Program integrations for 1-2 retailers on a regional basis (current pilot programs are exclusively operated through the I Do Foundation’s website). Over the next three years, CWS will develop national in-store Charitable Registry Programs for 3-5 major retailers. In addition to helping stores set up these charitable registry programs, CWS will provide ongoing back-end program support, including managing nonprofit selection by couples, customer service, and donation disbursement.

Over the past nine months, CWS has begun assessing the opportunity to expand these charitable giving programs into other segments of the wedding industry. CWS’s market outreach and analysis have shown a strong demand for charitable programs in the bridal boutique and floral segments.

Growth Opportunities: Adding Bridal Boutiques and Florists

The I Do Foundation has received strong interest from national bridal boutiques and florists who are eager to develop charitable programs. CWS will extend its charitable wedding services to enable these retailers to offer prospective clients the option to have a percentage of their wedding purchases donated to charity. This charitable program will differentiate participating boutiques and florists from their competitors and enable them to close valuable, high-margin wedding contracts.

In the second half of 2004, CWS will begin pilot charitable giving programs with bridal boutiques and florists with the goal of expanding these pilots into national programs in 2005. CWS will first focus on national clients to establish a solid operations platform. Once established, CWS will open up its services to local bridal boutiques and florists across the country. Through its streamlined donation system, CWS will enable any store to easily create “I Do” charitable giving programs.

NOTE: Throughout the rest of this plan, the discussion focuses on the Charitable Registry Programs because they represent more than 90% of projected revenue in the near term. The sales and operations process for boutiques and florists is nearly identical to that of CWS’s gift registry retail clients. For an example of a program integration proposal for these retailers see Appendix F.

The Role of CWS in the I Do Foundation

The CWS venture is a top priority for the I Do Foundation. CWS’s cause-related marketing programs are a critical part of the I Do Foundation efforts to create lasting change in the wedding industry. The Foundation is raising significant funding resources ($163,000 to date) and operational support in the form of office space, phones, web hosting, and Internet connectivity for CWS. In addition, several members of the Board of Directors have been heavily involved in the planning and fundraising for the venture. In 2003, CWS’s budget represented about a third of the total I Do Foundation budget and the venture will represent approximately 50% of the 2004 budget.[1]

Operational responsibilities are divided as follows:

As this chart indicates, CWS will be responsible for developing and maintaining retail client relationships. The I Do Foundation will then manage all stages of the grant-making process using the Foundation’s existing donation management systems.

II. CHARITABLE WEDDING GIFT REGISTRY PROGRAMS DETAILS

Through a Charitable Registry Program, retailers offer to donate a percentage of gift purchases to charity for couples who sign up for the program. Retailers offer the program to engaged couples through their stores and websites. Charitable registry programs create powerful incentives for attracting new bridal customers. The primary value proposition for stores, however, is the Charitable Registry Programs’ proven increase in per registry spending. With couples registering for gifts at an average of between two to three stores, Charitable Registry Programs give retailers an edge over competitors as they push to get guests to purchase from their stores.

Below is an outline of CWS’s cause-related marketing model.

How a Charitable Registry Program Works

1. Stores Offer to Donate a Percentage of Gift Purchases

Through their stores, retailers offer engaged couples the opportunity to sign up for a charitable wedding registry. Under the program the retailer donates a percentage of the couple’s gift registry sales to charity. CWS consults with the retailers on the development of program information sheets and store promotional materials. The retailer chooses the donation rate for the program. In addition to the donation rate, retailers pay an additional 1% to CWS for managing the donations.

2. Couples Choose Charitable Options

When a couple signs up for a charitable registry program at a participating retailer’s store or website, they automatically receive an account with the I Do Foundation that allows them to choose their charitable organization(s). Couples have the option to select a nonprofit from a list of charitable organizations in the store, or to view a broader range of charities later through the I Do Foundation’s online charitable options system. Couples can access their charitable options through the retailers’ website or directly at The I Do Foundation’s system enables couples in the retailers’ charitable wedding registry program to select or change a charitable recipient and manage their donation options online.

3. Couples Inform their Guests

Guests will hear about the registry through the usual means: word of mouth, bridal showers, and registry enclosure cards. Couples enrolling in the charitable wedding registry program can send registry enclosure cards (see inset) with their wedding or bridal shower invitations to inform guests about their charitable gift registry. The Wedding List was able to get almost 100% of couples to send enclosure cards. Guests make purchases online or at a local store and a percentage of the total amount spent on gifts is donated to charity.

4. Donation Payments

Each month, CWS provides retail clients with statements containing the names and registry IDs for all couples enrolled in the charitable registry program. Each partner then returns a report of registry spending for those couples. CWS invoices the retailers for the donation percentage plus the 1% management fee and disburses donations to couples’ selected nonprofits on a quarterly basis.

NOTE: Although retailers will offer the Charitable Registry Program to all couples in their stores and on their website, couples will need to sign up for the program in order to raise donations. No donations will be made on the registries of couples that have not signed up for the program in the store or online. CWS assumes that 15% of a retailer’s bridal customers will choose to sign up for the program, however, it is likely that many more couples will choose to participate.[2]

Charitable Wedding Programs for Florists and Bridal Boutiques

CWS is extending its service offerings to enable florists and bridal boutiques to create Charitable Wedding Programs. These programs will offer retailers the same opportunity to attract customers by offering to donate a percentage of sales. A detailed program proposal for KaBloom, one of our potential 2004 floral clients, is included in Appendix F.

Program Phase

/ Retailer Details / CWS Details / Timeline

Phase 1 Pilot Program

CWS creates Charitable Registry Programs for retailers on the I Do Foundation website. / Value Proposition: Low-risk opportunity to test the potential for Charitable Registry Programs to increase registry sales rates.
Fees: Retailer sets donation rate. Additional 1% fee paid to CWS.
Set-up Costs: Virtually no technical or operational costs. / Services Provided: Attracts couples to site, provides links to client’s registry services, manages charity selection and donation disbursement, provides customer service for all users
Staff Requirements: Adding new pilot clients requires no additional staff. Currently two technical staff and one service staff member are easily able to manage the pilots. / Currently, CWS has 10 pilot clients.
New Clients:
2004: 3
2005: 2-3
2006: 2-3
Phase 2 Regional Store Integration
CWS helps retailers offer Charitable Registry Programs in stores in a single region. / Value Proposition: Increased registry sales will drive clients to start regional store integrations.
Fees: Retailer sets donation rate. Additional 1% fee paid to CWS.
Set-up Costs: Stores will develop in-store program materials, train associates, and sign couples up in their stores. Stores will also promote and market the program. / Services Provided: Consult with clients on in-store program setup, manage charity selection and donation disbursement, provide donation-related customer service for couples and guests.
Staff Requirements: Each regional integration will require 4 months of full-time work by 2 staff members (1 tech, 1 service). If the regional integration is successful, then stores will integrate nationally. / Clients Moving from Pilot to Regional:
2004: 1-2
2005: 3-4
2006: 2-3
Phase 3 National Store Integration
CWS helps retailers offer Charitable Registry Programs in all of their stores across the country / Value Proposition: Continued proof of increased registry sales and a smooth regional store integration process for the Charitable Registry Program will push clients to expand nationally.
Fees: Retailer sets donation rate. Additional 1% fee paid to CWS.
Set-up Costs: Stores will develop in-store program materials, train associates, and sign couples up in their stores. Stores will also promote and market the program. / Services Provided: Consult with clients on national expansion, manage charity selection and donation disbursement, provide donation-related customer service.
Staff Requirements: Expanding the program nationally will require 3 additional months of full-time work by one tech and one service staff member. Ongoing customer support costs for the program will equal approximately $2.60 per couple (compared with per couple revenue of $25.00, not including donations) / Clients Moving from Regional to National:
2004: 0
2005: 2
2006: 2

IV. CWS PRODUCT AND SERVICE OFFERING FOR RETAILERS