Nonprofit retailers tune into fair trade: coffee dominates the market but other product are also certified.

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Although general economic slowdown will probably crimp World-Crafts' torrid sales growth of the past three years, including 50 percent in 2007 alone, director Andrea Mullins is still plotting some aggressive promotional moves.

To tap further into the surging popularity of imported merchandise labeled "fair trade," WorldCrafts' niche, Mullins plans to nearly double the number of catalogues mailed to top customers, find more partners for customized products, step up email blasts to shoppers and roll out a line of items priced at $9.99, a concession to tighter consumer spending.

But as a part of the Birmingham, Ala.-based WMU, formerly the Woman's Missionary Union, WorldCrafts must do more than turn in a good financial performance. "If I don't run WorldCrafts right, it will hurt artisans around over the world," said Mullins.

Fair trade is a hybrid of commerce and charity designed to raise the prices paid to and improve the lives of artisans and growers in poor countries. While it has been around in some form for more than for six decades, sales accelerated sharply after the turn of the millennium. This followed the sharp spike in demand for specialty coffee, far and away the largest fair trade product, plus several organizational initiatives during the 1990s that helped define and attract prominence to a movement that was only weakly understood and a desire by some consumers to shop philanthropically.

"We think the growth has come primarily from two factors, better product design and marketing intelligence, as well as a general growing interest in fair trade" said Douglas Dirks, spokesman for Akron, Pa.-based Ten Thousand Villages, which is credited with launching fair trade in 1946. "There is more interest among consumers in where they can go to spend their money to help the artisans and growers, buying things like sweat-free clothing and green coffee."

Still, growing pains have become increasingly obvious as more and more groups and companies, for-profit and nonprofit, pile into fair trade. One of the emerging flash points has been trying to define what exactly what earns a product fair trade status.

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"There is currently an attempt to water down the principles of fair trade to focus on a trendy market strategy, forgetting the primacy of the well-being of the producer," said James Goetsch, the administrator of the Friends of the Third World in Fort Wayne, Ind. To try to counter this, he has taken to call the products in his nonprofit shop "fair trade plus."

Although originated under a different name by religious missionaries--labels such as good stewardship, alternate marketing and alternate trade have been used over the years--fair trade has come to be dominated by for-profit companies such as Starbucks, Ben and Jerry's and Cost Plus World Imports. Still, nonprofits have upped their presence mainly through small shops, Web stores or onetime sales staged by churches or educational groups.

The Washington, D.C.-based FairTrade Federation (FTF), a group of companies and organizations pledged to practice fair trade principles, estimates that one-third of its 275 members are nonprofits. The federation does not break out the estimated $160 million in sales, mostly crafts, by sector, but calculates they have tripled since 2002.

Nor does TransFair USA estimate how much of the estimated $750 million in 2006 sales, a fivefold increase from 2002, of agricultural commodities that it certifies were grown and marketed on a fair trade basis flowed through nonprofits. Of that total, all but $30 million came from coffee.

Ten Thousand Villages, a separately incorporated wing of the Mennonite Central Committee, opens a window into how fair trade has flourished. Widely viewed as the largest fair trade retailer and distributor among nonprofits, it has more than doubled its revenues since 2000 to $23.5 million in fiscal 2007 ended March 31 and plans to double purchases from artisans again by 2011. In the process, it has built its network to 85 stores nationwide, 23 of them company owned, plus acts as the wholesale distributor to another 65 independent shops and nearly 300 events.

When examining what constitutes fair trade merchandise, the outward answer looks simple. Fair trade involves production that pays producers, whether as individuals or organized into co-operatives or small companies, above-market prices in return for commitments to abide by certain workplace and environmental standards while encouraging worker participation in major decisions. The key premise is to pay "a fair wage in the local context," enough to allow workers to feed their families, put their children through school, afford health care and generally live better than at a bare subsistence level. Although the details vary some among the different organizations, the overall thrust is consistent.

A fair trade brand comes from two sources. Ten agricultural products, of which coffee accounted for 95 percent by dollar value in 2006, but also include tea, sugar, cocoa and, recently, flowers, can receive a certification label from TransFair. The group, working in conjunction with the Fairtrade Labeling Organization in Bonn, Germany, maintains direct relations with growers and responsibility to see that fair trade production standards are enforced.

In addition, retailers and wholesalers can belong to the FTF or the International Fair Association (IFAT)--sometimes both--based in the Dutch town of Culemborg. Membership in the federation involves disclosing financial statements, suppliers, references and general information, plus paying a $50 fee.

FTF Executive Director Carmen Iezzi, the federation's only full-time employee, said the ranks have been growing rapidly, up 65 last year alone.To carry out the screenings, she said she relies heavily on a volunteer committee of six people and other people friendly to the group with contacts in developing countries. In the end, 40-50 percent of the applicants are turned down, she said.

Once in, members must submit annual updates about their business practices and are subject to more in depth random reviews. However, she said, the reviews cover only 10-14 percent of the members a year, so that some could go for years without being rechecked.

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As a practical matter, that means nonprofit retailers or groups staging sales events often rely on the fair trade credentials of groups like Ten Thousand Villages or SERRV International, which recorded $10.5 million revenues in 2006 mainly through it's A Greater Gift crafts and farm goods. SERRV, which operates out of New Windsor, Md., started in 1949 as part of the Church of the Brethren by importing German cuckoo clocks to the U.S. to help post-war Europe rebuild.

Worldly Goods, a single nonprofit shop in Ames, Iowa, that rang up $230,000 in revenue in 2006, relies on Ten Thousand Villages for about half its merchandise, said Manager Tina Newton. Besides what business they generate during regular hours, they will stay open late a few times a year as a benefit to various nonprofits, donating 20 percent of the sales to the group.

Without the staff or budget to conduct on site inspections, Worldly Goods still tries to conduct due diligence on its two dozen other suppliers. "You just need to know the right questions to ask, and we think we can do that after being in business for 21 years," said Newton. In particular, she wants to know how long a supplier has dealt with the artisans, the specifics about working conditions, photos and ways to contact the artisans directly.

"You just have to be careful," she said. "You need to double check things on your own."

Catholic Relief Services links to certain suppliers, including SERRV for crafts and a network of 17 independent coffee roasters, through its fair trade Web site. The organization relies on their ties to the federation or selling on TransFair certified commodities, rather than checking itself, said program advisor Katy Cantrell.

"We've seen among the Catholic community more and more people interested in fair trade," said Cantrell.

For its part, the program raised nearly $200,000 last year through a combination of contributions and referral commissions, running from 1 to 8 percent, on Web sales closed by others. Total sales that started at the CRS site jumped 54 percent last year to $2 million, she said.

Fair trade still has a significant faith-based tenor to it, in part, because far-flung church organizations can screen farmers and artisans for the program. Ten Thousand Villages taps its Mennonite connections to find people who are under-employed and will live up to fair trade standards, regardless of denomination. WorldCrafts works similarly, although it seeks out shops where at least the leadership, if not all the workers, are Christian.

Still, questions arise regarding the indefinite nature of fair trade standards, in particular what fulfills the key requirement of a fair wage by local standards. World of loom to create a Fair Trade run by SERRV International. Good Development Organization, the nonprofit arm of the for profit retailer World of Good based in Emeryville, Calif., has put together a Web site with wage data for dozens of markets worldwide to help standardize the answer. But none of the fair trade organizations has anointed it as the guiding authority, so fair trade standards vary from group to group.