When a Lower Fundraiser Profit is Actually Better

Why profit percent is not what it's cracked up to be.

Have you ever heard the saying, "You don't take profit to the bank; you take money?" Elementary school sponsors often make the mistake of focusing too much on receiving a higher profit percentage.

Many won't consider working with a school fundraising company unless they receive 50% of the gross sales. In some cases, competing companies have had to go even higher to get the business.

But are schools making a sacrifice to get a higher profit? The short answer is yes. If the first question you ask a company is, "What is the percent profit we are getting?" you may not see the entire picture.

So what we're getting at is, is it possible to take more money to the bank with a lower profit percentage? Here are three different scenarios to consider. As you'll see, it's not as straightforward as you might think.

1. Offer more Targeted Merchandise to Customers

Consider the following scenario:

A company offers a gift item brochure at 50% profit or a frozen food brochure at 40%. Which one will make you more money?

Gift item brochure at 50%:

• People are tired of the same gift item brochure every year.
• You know that many nearby schools are also selling this type of brochure.
• The pricing seems slightly high, and you've received complaints about value.

Frozen food brochure at 40%:

• You have heard people suggest frozen food.
• People find consumable products useful.
• Frozen food may have a higher perceived value.

By better meeting your customers' needs, you raise more money because more people will buy.

2. Sell more with a Better Prize Program

A company offers you a choice between a traditional prize program at 50% profit and a more exciting one at 40%. Which program raises more money?

Traditional prize program at 50%:

• Your older students have seen this type of prize program before and are not excited about it.
• Your students figure out that it's much harder to win the better prizes.
• Your parents can go to the dollar store and buy a similar quality prize.

More exciting prize program at 40%:

• Your students are excited about participating in something new and different.
• They're offered better prizes for selling fewer items, encouraging them to sell more.
• More students are excited to sell, so participation increases.
• Your parents seem more interested in it as well.

A better prize program gets more students to sell additional items. Thus, your gross sales will increase.

3. Having a Stronger Fundraising Coordinator

A weaker coordinator at 50% profit:

• Doesn't promote their sale consistently.
• Doesn't believe that additional incentives will make that much of a difference.
• Allows negativity and barriers to affect them.
• Doesn't delegate to others.

A more effective coordinator at 40% profit:

• Reminds students to sell every day.
• Sees value in incorporating additional incentives to boost sales further.
• Has established a sales goal.
• Realizes the importance of getting parents, teachers, and staff involved.
• Knows they can't do it all themselves.
• They're problem solvers.
• They've successfully established and promoted their purpose.

Good leadership at the top is essential to experiencing a successful sale. People tend to follow a good leader.

Asking for a higher fundraiser profit without considering other important factors is like purchasing a cheap car with no upgrades. It was once said that "a fast nickel beats a slow dime!"

See our brochure fundraisers.

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.