Fundraising treats

Fundraising treats

Fundraising Treats

A school plans a fundraising event, for which it has a sponsor and an equipment supplier (benches, tables etc). The sponsor agrees to pay an amount equal to 20% of the proceeds obtained, and the school agrees  to pay the supplier 10% of the proceeds.

Does it matter whether the equipment supplier is paid before the sponsorship money is obtained – or vice versa?  

Approach to solution

Suppose that the total takings are $1000.

(a) Pay supplier first

Amount to school after costs = $1000 x (90/100) = $900

Final amount to school          = $900 x (120/100) = $1080

(b) Obtain sponsors money first

Amount to school after sponsor = $1000 x (120/100) = $1200   

Final amount to school = $1200 x (90/100) = $1080

Solution and interpretation

From the school’s point of view – No ($1080 both ways).

From the viewpoint of the supplier and the sponsor – Yes.

(a) Supplier gets $100 and Sponsor pays $180

(b) Supplier gets $120 and Sponsor pays $200.

In (b) the sponsor has subsidised the supplier as well as sponsoring the school.

General insights 

  • The best solution to a problem may depend on the perspective of different persons involved: school? supplier? sponsor? all three?
  • Key terms need to be defined clearly up front – are “proceeds” to be determined before or after subtracting costs?
  • Is sponsorship to be applied to gross or net profit?
  • Team approaches can ensure that the interests of all players are  considered.


Go to the Starting Points Forum to join the discussion or find more Starting Points

developed with DB Informatics