Why Fundraising Profit Percent is Overrated

When selecting a fundraiser, many sponsors automatically go with the company that gives them the highest profit percent. Sometimes it’s the first question we get asked when someone contacts us. They’ve reviewed the information provided by all of the school fundraising companies and most likely feel that there’s not much that distinguishes one from another.

Some companies anticipate this and in an attempt to get the business they increase the percentage amount. Let’s face it, everyone wants to raise as much money as possible, and one way to accomplish that is by getting a larger share of the gross sales. So why then is fundraising profit percent overrated?

Limited Fundraising Options

If you're receiving a higher profit percentage, you can expect to have a limited number of programs that the company will be able to offer. For example, you may not be able to sell items like frozen food, cookie dough or candles. These items are typically higher quality items that people like, but must be offered at a lower profit percentage.

Groups usually make more money selling more desirable items as opposed to lower quality items that can be offered at a higher profit.

Student Motivational Factors

In addition, you won't be able to motivate your sellers with better prize programs like a super party, sportswear or cash. By offering more exciting prize programs you will motivate more students to sell additional items out of their brochure.

Money is Better than Profit

You’ve seen the ads on Google. Get up to 95 or even 100% profit! But how much do you end up raising with their fundraiser? Most of the time, it’s not very much. Which scenario would you rather have?

  1. Raise $500 and receive 90% profit?
  2. Raise $3,000 and receive 40% profit?

Higher Profit Percent Breads Complacency

Many groups somehow think a higher profit percentage automatically leads to a successful sale. Unfortunately these groups usually don't put the necessary time into promoting their sale and end up not raising very much money at all. Regrettably, they figured they would make more money, simply because they received a higher profit percent.

When considering a fundraiser that will maximize profits, groups should instead focus on 2 things:

  1. How well your product will be received by your community.
  2. How you plan to motivate your group to sell.

Concentrating on these types of things will make you more money than just focusing on fundraising profit percent. You always get out what you put in.

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