How are fundraising profit percentages determined?
The goal with most fundraisers at the end of the day is to raise the most money possible for your organization. As a company who has worked with thousands of groups helping raise millions of dollars, we get it! We understand the industry and our fundraising programs are designed to maximize the profit that goes to our fundraising groups. Each fundraiser that we offer has a specific profit percentage that goes back to the group. These percentages are based on a whole variety of factors that we will explain in greater detail below. An unfortunate trend that has developed in the industry is that fundraising groups are demanding a specific percentage from the fundraising company. Below are the consequences of these demands and how it’s affected the fundraising industry as a whole.
How are fundraising profit percentages determined? Each fundraising company has their own policies in place for how they determine the profit percentages. I can tell you that the margins dictate the terms for us and how we determine what percentage we can offer our groups. There’s a cost to produce the product. There’s a cost to package and ship the product. There’s a cost for the fundraising materials (brochures, order forms, envelopes, etc.). Plus, when it’s all said and done, there has to be a reasonable retail cost as well. We strive to offer a quality product at a fair price to the consumer. The margins to the fundraising group will be dictated by a fair retail price and the cost of the product.
What happens when a customer demands a profit higher that what we’re offering? This is always a delicate situation. We try to explain our process in determine the profit percentage hope they understand that much of the process is out of our control. The bottom line is that they want something that is going to sell. Would they want a 50% profit of an overpriced piece of junk or 40% on a quality product that is fairly priced? Many of our programs have a 50% profit (and higher), some of our other programs do not. There is a reason for this. For the companies that offer a 50% profit on program where the margins don’t support it, something has to give. And most times it’s the product quality and an inflated retail price. I can’t tell you how many times we’ve heard this generalization about the fundraising products in the industry as a whole: “The fundraising products are way overpriced and the products are junk”. Now you know the reason why! Many in this industry feel this topic is taboo and should not be discussed, we beg to differ. We feel it’s important for fundraising groups to understand this process and see the direct cause of over inflated pricing and sub-standard quality of their fundraising products
Here at School-Fundraisers.com, we pride ourselves on the profit percentages we offer to our groups. They are some of the best in the industry. At the same time, the product quality of our fundraising ideas is also the top in the industry. How do we do it? We stick to the high quality products that work and have fair margins. The programs that have gotten out of whack (gift wrapping anyone?) are the ones we avoid. We are in this for the long haul and our fundraising groups are our partners!