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Higher Fundraiser Profit Percent or Better Prizes?

By Clay Boggess on Nov 27, 2013
Higher Fundraiser Profit Percent or Better Prizes?

Is a higher profit percentage your best option?

More organized groups offer better incentives and work to promote their sale, usually outperforming schools focused on profit percentage. So why doesn't a higher fundraiser profit percentage guarantee you more money?

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

He failed to realize that the total money would probably be lower even with a higher profit percentage. 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 you're better off looking for better prize programs to 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 must start offering better incentive plans to increase student participation, even if they have to accept a lower profit percentage. We've witnessed great results from schools that have bought into this approach for years.

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Author Bio Clay Boggess, Author

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.

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