Why a Higher Profit Percentage is no Guarantee

Why there's more to fundraising than higher profit percentages.

Groups that offer better incentives that motivate their students to sell will almost consistently outperform groups primarily focused on obtaining a higher profit percentage. We recently talked with a school seeking a 5% increase in their profit percentage. Yet, they weren't interested in offering additional incentives to motivate their students to sell more.

This school failed to comprehend that sales performance was more important than profit percentage. Even with a higher profit, the total money they brought was lower because they didn't do enough to increase student participation.

As a result, they made a higher percentage off a much smaller gross sale. Instead, they should've focused on ways to make their sale stronger.

Fundraising profit can be deceptive.

Many fundraising companies are alike. Instead of attempting to offer more effective programs that motivate more students to sell, they continue to market average-quality products with the same mediocre price programs. As a tradeoff, they offer a higher profit percentage. This is what schools have come to expect. Yet the result often leads to dissatisfied customers, disappointed students, and schools that are content with average sales results.

There's a price to pay for a higher percent profit.

There is always a price to pay. More profit given to the school usually means a lower-quality fundraiser program. Fewer customers will buy due to poor product quality. Plus, older students cease to participate because they become accustomed to how the prize program works. Therefore, less participation and fewer supporters lead to only one thing: lower sales.

Complacency with a higher profit percentage.

Some sponsors feel that if they get a higher percent profit, they won't have to work as hard on the sale. We've seen this time and time again. The mentality is to sell the same amount of items but make even more money. Plus, even if they don't sell as much, they'll still receive more profit from the items they sell. This mindset will lead to fewer students participating.

In reality, your students are the engine that drives the success of your fundraiser. They don't care what profit the school makes, but what's in it for them? So, how can schools make more money? Increase participation by offering a more robust incentive plan even if you accept a lower profit percentage. This approach has yielded great results for many schools for years.

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.