Is Scrip Fundraising Right for Your School?

Scrip is a term that is used for the substitution of legal tender such as currency. Since its inception in the late 1980’s, scrip fundraising has had its ups and downs. The idea is to move people away from having to go out and make sales.

People instead purchase gift cards that can be used at places they ordinarily shop at while the school makes a small profit. So they don’t have to change their behavior other than using the gift card in place of their credit card.

Cards are purchased by the consumer at face value from the school who in turn makes a profit because the school buys them from a scrip fundraising company at wholesale.

This sounds good on paper; however how practical is it, and more importantly, does it work? Many schools, both public and private, have made this work quite well, but there are things to consider before deciding if it’s right for your school. Here is a list of advantages and potential disadvantages to doing a scrip fundraiser that may help:

Advantages to Scrip Fundraising

  • Families don’t have to sell anything to others.
  • Consumers can use gift cards to make normal purchases from stores that they would ordinarily shop at anyway.
  • Items can be purchased with gift cards at the same price as credit cards.
  • Schools benefit when people make these normal everyday purchases.
  • Done correctly, organizations can create a steady income stream over the course of the school year.

Disadvantages Worth Considering

  • Schools make a lower profit (2-15%).
  • Appears to work best when people are able to plan ahead on their purchases as opposed to impulsive buying.
  • Requires that a substantial amount of people use the gift cards on a consistent basis in order for the school to really benefit.
  • May be difficult to get people to modify their behavior and use gift cards instead of credit cards.
  • Most scrip companies don’t offer an effective tracking system to keep track of gift card orders.
  • Many people choose credit cards for the added benefits, like earning free airline travel, so they may be less apt to use a gift card instead.

Profits usually start off low but if organizations can get increased participation over time, the money earned can be substantial. In other words, how effective the program becomes depends on the number of families that the organization is able to sign up, and how religiously they use the scrip program. For example, an organization of 150 families can easily spend upwards of a million dollars a year on food. This can translate into $40,000 for the organization without people having to spend any more money than they ordinarily would.

The key though is finding ways to convince people to use the program over time. Unfortunately, breaking old spending habits can be difficult. Once the program builds up over time, and you have a couple of experienced people to run and manage the orders, scrip fundraising can work quite well.

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