Basics 101: Effort to Profit Ratio for Your Fundraiser

Many different studies have been conducted for the purpose of showing comparisons between various fundraising methods. These fundraising methods have been analyzed for total effectiveness in accomplishing their intended objective – To Raise Money. Naturally, the only way to truly compare apples to apples, in the fundraising sense, is to analyze similar variables such as size, type, regional demographics, socio-economic makeup, etc., of the groups and organizations used in the test study.

One could spend hours reviewing the findings of these studies, but one point has markedly stood out in the various studies relating to school and youth fundraising – On average, Product Fundraisers won hands-down over event and donation fundraisers. When we say “Product Fundraisers”, we are referring to fundraising activities where product items are purchased by the fundraising groups in order to be resold to their customers. Classic examples of Product Fundraisers include fundraising cookie dough, fundraising candy items, flower bulbs fundraisers, fundraising jerky, meat snacks fundraisers, fundraising scratch cards, candle fundraisers, etc. In contrast to product fundraising, event and donation fundraising activities include fundraisers such as bake sales, carnivals, car washes, raffles, benefits, programs, etc. Although there are times when specific schools or youth groups have very profitable event/donation fundraising projects, the majority of event/donation fundraisers will not produce revenues that are comparable to those produced through product fund raisers.

Event and donation fundraising is often undertaken under the assumption that outside participation by moms, dads, relatives and other friends will lessen the group’s fixed costs and expenses, and will give them a huge percentage of profit, particularly since no product has to be purchased. Many times, however, the amount of time and work involved with the full scope of the planned fundraising project is almost overwhelming, particularly when just a few volunteers often wind up doing a disproportionate amount of the work. Booster club mothers may spend many hours, in addition to absorbing considerable costs, making cookies, pies and pastries to donate for an organization’s fundraising activity, yet make very little money for all of their efforts. A fundraising group may spend hundreds of dollars setting up a carnival, along with the donation of hundreds of hours of work, and see the carnival fall through because there was another conflicting activity taking place on the same evening, or because a rainstorm dropped two inches of rain, just an hour before the carnival was to have started.

Event/donation fundraisers are often conducted for a two-fold purpose - 1) to unify and bring people into networking types of relationships, and 2) to raise needed funds while the networking is taking place. Everyone gets involved; the dads are busy building “stuff”, the moms are busy arranging and creating, the fundraising group’s sponsor(s) and officers are helping to link communications between the students and adults, and everyone (at least hopefully) is busy with their particular part of the project. A lot of work and a lot of planning are going on – Sometimes too much work for the amount of profit the fundraising organization ultimately receives.

As the examples in the above paragraph show, there is not necessarily always a positive correlation between the amount of work expended on a fundraising activity and the amount of profit received. Not always, but most of the time, the simple philosophy of, “sell the product, get your money in hand, and go on with your group’s main objectives ”, is the wisest and most profitable way to handle your group’s fundraising needs.