Are Fundraising Companies Really a Necessary Evil?

Why school fundraisers benefit by using companies.

It depends on who you talk to. Many sponsors feel that fundraising companies add value to what they’re trying to accomplish. A National Association of Elementary School Principals study indicated that 94% of schools relied on fundraisers to supplement depleting financial support from district, state, and federal sources.

Robert Channick with the Chicago Tribune states that the fundraising industry generates $3.3 billion in annual sales, of which $1.4 billion goes to schools and other nonprofit organizations. And therein lies the rub. Some opposed to fundraising companies getting involved feel that schools are simply raising money for the companies instead of the schools themselves.

Furthermore, many feel schools shouldn’t send their students and parents to the community to make sales. A few are even asking why schools should even have to fundraise at all. Some groups have attempted to raise money in other ways, like getting parents to write a donation check. But despite the opposition, why are fundraiser companies still so popular?

Fundraising Companies Offer a Proven Business Model

Just ask any volunteer group who has taken the time to set up a school carnival or silent auction. It’s hard work. Sure, if items are donated, groups can make 100% profit; however, think about the people who invested their own time to get the businesses to donate in the first place.

On the other hand, companies help make raising money easier by allowing schools to plug into a built-in system. The company provides Step-by-step instructions that allow the school to navigate the fundraising procedure easily.

Schools receive student packets that provide information about how to proceed. Parents merely follow the steps and take orders. The seller preps the merchandise so the school doesn’t have to sort it. This ultimately makes it easier for the school to distribute the products to the end customer.

A Misconception of Fundraiser Company Profit

Who profits more from the sales, fundraiser companies, or the schools? The schools keep the majority of the profit, not the companies. How can this be? Let’s look at an example. If a school gets to keep 40% of its gross sales, many feel the company pockets the 60%.

Out of that 60%, companies must pay their expenses then. For example, companies must purchase and stock the items sold in brochures from various suppliers and manufacturers. The brochures also have to be designed and printed. Personnel who provide customer support to the schools have to get paid. So one can see that the 60% is only the gross profit.

It used to be that fundraiser companies only helped schools raise money for non-essentials, like field trips and end-of-the-year parties. This is no longer the case, as much of the money raised is now helping to fund everyday necessities that the school districts can no longer cover. Does this make companies evil, or should the blame fall on the rest of us for not making the funding of our children’s education a higher priority? You be the judge.

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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.