You may have heard it said before. You don’t take ‘profit’ to the bank you take ‘money’. Fundraising coordinators often make the mistake by focusing too much on obtaining the highest profit percent possible for their school fundraiser when negotiating with a fundraising company. Some people won’t even consider working with a company that offers less than 50% profit. In some cases competing fundraising companies have had to go even higher in order to get the business. Is the school sacrificing in order to get a higher profit? The short answer is definitely. If the first question out of your mouth when interviewing a fundraising company is, “What is the percent profit I am getting?” then you are definitely missing out on some other important aspects that could end up making you more money than if someone offered you a higher percent profit. Is it really possible to take more money to the bank when all is said and done even though you are making less profit?
What follows are three different scenarios that you need to also consider when choosing a fundraiser for your school. It’s not as straight-forward as you might think.
1. More Appropriate Brochure
Consider the following scenario:
Gift item brochure at 50%:
Compared to a frozen food brochure at 40%:
The take home message is if your product lines up better with the needs of your customers then it might end up raising you more money because people will buy more
2. Better Prize Program
A school fundraising company offers you a choice between a standard prize program at 50% profit and a more exciting prize program at 40%. Which one will net you more money?
Standard prize program at 50%:
More exciting prize program at 40%:
It has been proven that by offering a better prize program, more of your students will sell additional items and thus your gross sales will usually be higher. Your net sales are often higher as well and the important thing to keep in mind is that people are more satisfied. As a result your participation may increase even more next year because the word will spread.
One question might be why can’t we have the higher percent profit and the better prize program? The fact is that all fundraising companies have to work within a certain budget. The better prize programs cost more so you have to give something up in order to get it. A lot of schools that have been used to getting 50% profit with a standard brochure aren’t even aware that there are other more exciting prize programs out there that will do a better job of motivating their students to sell.
3. Stronger Fundraising Coordinator
Weaker fundraising coordinator is doing a fundraiser at 50% profit:
Stronger Fundraising coordinator is doing a fundraiser at 40% profit:
The most important aspect to experiencing a successful school fundraising sale is good leadership at the top. If everyone knows that you have bought into the program and are giving it your all, they will more than likely follow your lead.
So there is a lot more involved than just looking at percent profit. Asking for the highest percentage possible without considering other important factors is like asking for the cheapest car with no upgrades. A friend of mine once said that a ‘fast nickel beats a slow dime – every time!’