Higher Fundraiser Profit Percent or Better Prizes?

Groups that are more organized, offer better incentives and work to promote their sale usually out-perform schools that are focused on profit percent. So why doesn’t a higher fundraiser profit percent guarantee you more money?

We recently worked with a high school group where the sponsor wanted more profit but he wasn’t willing to offer an additional incentive to inspire more sales. In other words, he didn't want to put any more work into his sale than he had to.

What he failed to realize up front was even with a higher profit percent, the total money brought in was probably going to be lower. And even though we told him this, he persisted.

Sure enough, his sales results ended up being lower than he expected. Here are some reasons why you're better off looking for better prize programs that will increase student participation.

Higher Profit but Lower Sales

As a result, even though they received a higher profit percentage, their gross sales amount was lower. In other words, they should have focused on how to make their fundraiser stronger:

  • Example #1: 45% profit x $2,000 total sales = $900 profit
  • Example #2: 40% profit x $3,000 total sales = $1,200 profit (even at a lower profit percent, the amount of money made was higher)

Schools are Used to Average Prize Programs

Most school fundraising companies are alike. Instead of offering better prize programs that motivate more students to sell, they continue to market mediocre incentive plans. The tradeoff is to offer more profit. Unfortunately, this is what groups have come to expect. Yet the result often leads to students and parents being dissatisfied with the quality of the prizes, and schools achieving average sales results.

Students Drive Fundraising Results

The bottom line is your students are the engine that drives your fundraiser. They don’t care what profit the school makes. They want to know what’s in it for them. So, how can schools make more money? Schools need to start offering better incentive plans that will increase student participation; even if they have to accept a lower profit percentage. We’ve been witnessing great results from schools that have bought into this approach for years.

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