Why Better Prizes Mean a Higher Fundraising Profit

How to ensure a great return on your prize investment.

If your students and parents aren't motivated to sell, you won't raise as much money as you'd like, regardless of your percent profit. Chances are your students are becoming bored with the same type of incentive plan while you continue to listen to complaints from your parents about the lack of quality in the prizes.

If you're open to considering better prizes for your fundraiser, you may need to rethink your profit strategy. In other words, should you continue to offer a cheaper prize program at a higher profit or consider offering a better incentive at a slightly lower profit?

More Traditional Prize Programs

Historically, elementary school sponsors have selected more traditional prize programs with less expensive prizes at the lower levels. Students must sell more items from their brochures to reach better prize levels. The prizes at the higher prize levels initially get students excited about selling, but most will only end up winning prizes from the lower levels. The problem with these types of prize programs is that although groups may receive a higher profit margin, they tend not to motivate as many students to sell. There have also been complaints about the quality of the prizes. Many sponsors are thus more motivated to choose better prize programs because students tend to bring in more sales.

Unique High School Incentives

Sportswear prize programs allow students to win sportswear for selling instead of the more traditional prizes most schools are used to. The advantage of earning sportswear is that parents and students find the quality and usability to be better than traditional prizes; however, the profit percentage that groups make can also be lower. Sportswear prize programs are most popular with high school groups.

Cash Prize Programs, like bands and cheerleaders, are also more familiar to high school students. Older groups like cash because it motivates them to sell more, and sponsors don't have to deal with prizes. The company will issue a check to the sponsor for the cash earned once their bill has been paid in full.

Newer Incentive Options for Elementary Schools

A newer type of prize program that's starting to catch on is where students earn admission to a fun activity like a party or show to reach a specific fundraising goal. The advantage of these prize programs is that students and parents seem more motivated to sell because they appear fresh and fun. Students can attend the event by selling a minimal number of items. This tends to increase overall participation, which can lead to increased sales.

Compared to a traditional prize program where most students only win cheap prizes, getting to go to a fun activity instead is more appealing. These programs also encourage students to sell more because of higher prize levels. The potential drawback is that certain sales minimums usually need to be reached to receive these events for free. Some school fundraising companies offer a prorated chargeback on their invoice for groups that don't reach their minimums.

Prize Programs Determine Fundraising Profit

Generally, if a school picks a traditional prize program for their fundraiser, there is more flexibility on what profit they can receive. This is due to the overall cost of the prize program from the company's standpoint. More expensive prizes like sportswear and event programs generally offer a lower percentage as a tradeoff. However, the tradeoff can be well worth it.

Sales vs. Profit Percentage

When selecting a prize program for your school fundraiser, it's essential also to consider how you can impact sales rather than just focusing on what percentage of retail you'll get. Schools can bring in less money even with a higher share of the gross. Remember, you don't take profit to the bank; you take money.

Prize Programs Should Increase Sales

When selecting a prize program for your fundraiser, the crucial factor is how well it motivates your students and parents to get out and sell. You can receive the highest percentage in the world, but if your prize program doesn't bring in sales, it won't matter. Better prizes may mean a lower percentage of gross sales but a higher fundraising profit. What you ultimately take to the bank should be the most critical factor.

See our prize programs.

Author Bio

Clay Boggess has been designing fundraising programs for schools and various nonprofit organizations throughout the US since 1999. He’s helped administrators, teachers, and outside support entities such as PTAs and PTOs raise millions of dollars. Clay is an owner and partner at Big Fundraising Ideas.