Fundraising fallacies you should avoid
We’ve seen a lot in 20 plus years of fundraising. From a technology standpoint the industry has changed significantly. But one thing remains constant over time. Schools will always need money to pay for extracurricular activities.
When it comes to school fundraising, everyone has their opinions. What works for some may not work for others. For example, socioeconomic conditions vary which affects what people can afford to buy.
There are lots of ideas floating around about the best ways to raise money. Working with many groups, we learned a lot. We’ve developed a pretty good sense for what’s needed to succeed. As much as we want fundraising to be easy, it's not. Regardless of what you've heard, if you want to reach your goals you have to put the work in.
Technological advances, like what’s happening with online fundraisers, have streamlined the process. But the same basic principles apply. Like taking the time to monitor your sales progress.
Many sponsors have misconceptions that they bring to the table. And they assume these beliefs will help their sale. In reality they have not made a difference the vast majority of the time.
The challenge is getting people to understand that their opinions may not work. It’s important to share what we’ve learned although in the end it’s up to the sponsor to decide.
Here are 3 common school fundraising fallacies that you definitely need to be weary of.
1. A Higher Profit Percentage Means More Profits
What? This sounds like an oxymoron. You might be scratching your head on this one. Why won't a higher profit percentage always lead to more money in the bank? Many fall into the same profit trap.
This might be the case if fundraising took place in a vacuum. But unfortunately, there are other variables that must also be considered. It’s been said that you don’t take profit to the bank, you take money. This seems obvious but at the same time it's hard for some to grasp.
Companies understand how people think and are thus promoting higher profit percentages. Their goal, to attempt to lure you in. What you may not know is that in exchange for a higher profit percentage you may receive:
- The same product but at a higher price.
- A cheaper prize program in exchange.
What’s even more important than percent profit? Ensuring that you:
- Pick the best possible product based on what will sell in your community.
- Select an effective incentive that will motivate your group to sell.
You may receive a great profit percentage but if your students don’t sell, it won’t matter. Many groups with a higher profit percent make less than those who offer better prizes. It may be because groups receiving a higher percent profit don’t feel that they need to work as hard.
At the end of the day, receiving a high profit percentage off meager sale results is not very rewarding.
2. Lower-Priced Items Means More Profit
This might be true in some cases. But again, it depends on your area. It’s definitely true that more people will be able to afford to buy items that cost less. But some may be able to afford to pay more.
Instead, your focus should be on finding a product that will appeal to more supporters. There are disadvantages to selling less expensive items:
- You'll make less money off lower priced items so you will need to sell more to make the same amount.
- Your sellers will need to work harder to make more sales.
- More expensive items may offer better value.
- Only offering lower priced items may limit buyer options.
3. Longer School Fundraising Sales Make More Money
If your group sells a certain amount after a couple of weeks; won’t they sell more if you give them a month? The answer is in most cases not necessarily. Sales typically happen during the first 3-4 days. Allowing more time than normal won't always bring in more sales. The law of diminishing returns definitely comes into play. The reason why you might want to avoid this strategy is that your students might:
- Lose focus.
- Have a lower sense of urgency.
It's easy for people to think these 3 fundraising fallacies offer an advantage. But unfortunately, it usually doesn't work out that way in the end. We have lots of evidence that supports that the opposite is true in most cases.