What raises more money – product sale fundraisers or major fundraising events? The short answer is… major fundraising events, but it depends on the type of event.
Product sale fundraisers are the most common types of fundraisers used by schools and small youth organizations – from church youth groups to cub scouts and sports teams. From cookie and popcorn sales to Krispy Kreme doughnuts, product sale fundraisers are typically the first type of fundraising opportunities people consider when needing to raise money.
Pros and Cons of Product Sales Fundraisers
Product sale fundraisers are often good solutions to meeting small fundraising needs. They typically raise $500 to $2,500 within a short period of time for small groups and up to $20,000 for larger organizations. The most common product sale fundraisers in schools involve selling chocolate/candy bars, cookie dough, pizza dough, gift wrap, magazines and catalog products. In addition to these, many schools sell seasonal items including oranges, pecans and poinsettias.
Product sale fundraisers have positives and negatives. On the positive side, they can be done quickly, they can meet small fundraising needs fairly well, they require little up-front money or investment, and they are easy to understand and implement. They are ideal for small groups of people, especially youth-related organizations like school clubs (cheerleaders, band, debate), school sports teams, non-school youth groups and youth athletics.
On the negative side, product sale fundraisers often raise far less than expected. They are usually not able to raise significant money to meet larger fundraising needs – this is understandable when you consider a typical $1 profit on candy bars and the need to sell 2,500 candy bars just to raise $2,500. Product sale fundraisers are also very expensive (typically costing 50¢ to 65¢ of every dollar raised), they tend to be over-priced for their value in order to provide more money to the charity, they are transactional in nature, and they are not able to attract new people to be involved in the host-charity or school organization…and unfortunately, they aren’t very much fun.
Because schools and other organizations often have much larger financial needs than what can be raised in a single product sale fundraiser, many organizations (schools in particular) find themselves conducting numerous product sale fundraisers to try to accomplish their goals. This tendency toward multiple fundraisers can lead to volunteer burnout and overwhelming the very supporters they are trying to serve (especially parents in schools).
So what about fundraising events – can they raise more money than product sales? Absolutely… but to get the best out of your event, you have to do it right.
Most Common Fundraising Events
The most common fundraising events are sports tournaments (golf, bowling, fishing, softball), walkathons, 5K races, banquets, auctions, art shows and concerts. Two other fundraising events that are growing quickly are color runs and sporting clay shoots.
Fundraising events also have positives and negatives. On the positive side, fundraising events have the capacity to raise significant money (sometimes over $200,000), they cost less than product sales (in terms of percentage of expense of the total raised), they excite and energize supporters to be more involved with the host organization, they create visibility in their communities, they attract new people and, very importantly, they are usually FUN! Fundraising is difficult enough; creating a FUN factor is very important.
On the negative side, fundraising events take more time to organize (typically about 3-4 months), they can be vulnerable to bad weather if they are outdoor events, they require more volunteers to organize and they are often more complex to organize than a simple product sale.
Your Event’s Fundraising Model Makes All The Difference
The most important factor in how much a fundraising event can raise is the fundraising model or structure of the event. Most sports tournaments raise money from participant entry fees and corporate sponsors. Most banquets, auctions and concerts raise money through ticket sales, donation appeals and item sales at the event.
The problem with charging entry fees in tournament events is that most of the entry fee is spent on event costs, leaving very little for the organization. Consider charity golf tournaments where the most common entry fee is $100 – but by the time you pay for that golfer’s green fees (typically $50 - $65), gift package ($20 - $40) and meal, the net profit from that $100 entry fee may be just $15 - $20. Even if you have 100 golfers in your charity golf tournament and make $20 profit on each one, you’ve only made $2,000 in net profit! The entry fee model is very inefficient – and is the primary reason why the average charity golf tournament in America makes less than $5,000 in net profit.
Without question, the most effective fundraising model for fundraising events is personal-sponsorship fundraising where your participants raise money from their friends and family. Think of a simple walkathon… each walker raises money through friends and family anywhere in the country. People are giving because of the relationship with the walker, and they give even if they don’t know about the organization or care about the cause. In fact, the most important principle in fundraising is that people give to people they know – it’s all about the relationship!
In fact, the personal-sponsor “walkathon” fundraising model can be applied to almost any event you conduct. Instead of asking a golfer to pay a $100 entry fee that results in just $20 of profit, why not ask that golfer to try to raise $1,000 or $2,500 through personal friends and family. Can this approach actually work with an event like a golf tournament?
Yes it can – and it can work exceptionally well. I’ve personally been involved in helping conduct over 1,500 fundraising golf tournaments throughout the U.S. using this model – and the average golfer in these events raised $1,750 before expenses, resulting in over $1,600 profit PER GOLFER. In other words, one personal-sponsor fundraising golfer at $1,600 profit can produce the same net-profit to the charity as 80 entry fee golfers at $20 profit apiece. And we’ve effectively applied this personal-fundraising model to a variety of events with similar fundraising results – from 5K races to bowling events and clay shoots as well as nontraditional events including fall festivals, carnivals and community-service events.
So what raises more money – product sale fundraisers or major fundraising events? The answer will ALWAYS BE major fundraising events… if they are structured well. Allow your participants to raise money, not just pay an entry fee. In addition, leverage the energy and excitement of your event to get media attention, corporate sponsors, underwriters and maybe even matching-fund donors. Make it fun, engage your participants in actual fund-raising versus product sales, and you should be able to raise anywhere from $20,000 to over $200,000.