Advertising and shipping costs must be subtracted from the fundraising proceeds.
Calculating fundraiser profits is usually as easy as calculating money earned from selling items at a profit. A person can start by finding out how much it costs to make or buy the product that will be sold at the fundraiser. Once a person calculates this cost, he can use simple subtraction to calculate the profit from the fundraiser. Basically, you can subtract the cost of manufacturing or producing the item from the total selling price; The answer to this basic math problem is profit. In some cases, however, there are other expenses that must be included in the cost of a fundraising product or service, such as advertising, organizing the fundraiser, and shipping or delivery. To correctly calculate profit, these expenses must also be subtracted.
A person who needs to calculate fundraiser profits might start with a basic math problem. For example, if the leader of an organization starts a fundraiser for gourmet cookies, he will need to determine the cost involved in making the cookies. If it costs him $2.00 US dollars (USD) to make a batch of cookies, and each batch sells for $5.00 USD, the fundraising profit for each batch is $3.00 USD. If the people participating in the fundraiser sell 1,000 batches of cookies, you can use multiplication to find the total profit. In this case, she could multiply 1,000 by $3.00 USD to arrive at the total win of $3,000 USD.
Simple subtraction problems work well when all the organization needs to consider is the cost of making or buying an item. In some cases, however, there are other costs involved that must be considered in fundraising calculations. If, for example, an organization starts a fundraiser involving the sale of coupon books for $20 USD and the books cost the organization $10 USD, the profit would be $10 on each book. If the organization has to pay shipping to get the books, this can change the profit figures.
If the same organization pays $50 to ship 500 books, you can divide $50 by 500 to determine the cost of shipping each book. The cost per book would be $0.10 USD in this case. So the cost of getting the fundraiser would be $10.10 each and the profit, if the books sold for $20, would be $9.90. If 500 of these books were sold, the profit would be $4,950 USD. This method of calculating fundraising profits can also be used if an organization has advertising, organizational, or labor costs to include in its calculations.