How Fundraisers Work

Students around the country are raising money for their school.

Last year, teachers at Elliott Elementary, in McKinney, Texas, wanted to buy new iPads and computers for their students, but they didn’t have enough money in the budget. They decided to hold a fundraiser. Students were asked to collect donations in exchange for running laps around the school track. Fourth grader Bennett Webster, 10, asked friends and family to sponsor × sponsor PATRICK FOTO/GETTY IMAGES to agree to give money to someone who is going to take part in a charity event (verb) Aunt Charlotte agreed to sponsor my cross-country bike trip for charity. each lap she ran. Many agreed, and Bennett ran 46 laps to raise $100. In total, the school raised $41,000, and was able to purchase the new technology it needed. “I love that we used our money for something the whole school can enjoy,” Bennett says.

Supporting Your School

Bake sales, car washes, and pizza-for-lunch days are common school fundraisers. But it’s also become common to contract with large companies that take care of the planning and products. And raising money for new band uniforms, playground equipment, or other needs has become big business. According to a study by the National Association of Elementary School Principals, 94% of schools in the United States hold fundraisers. This raises about $1.4 billion annually.

There are several kinds of fundraisers. Donation fundraisers ask people to pledge money to a student for doing something like jumping rope or volunteering. Sponsors donate money and expect nothing tangible × tangible JOHNER IMAGES/GETTY IMAGES capable of being touched (like an object) (adjective) The contest winner will receive a tangible reward, such as a trophy. in return. In contrast, product fundraisers involve selling something, like candles, baked goods, or wrapping paper during the holidays.

Who Gets The Money?

Schools don’t get to keep all the money. They have to subtract their overhead × overhead MASKOT/GETTY IMAGES the amount of money it costs to operate a business, organization, or event (noun) To reduce overhead, the business moved to a new building where rent is less expensive. . They must also pay the companies that provide fundraising services and products. Typically, schools keep between 50% and 90% of profits, according to Chris Carneal, founder of Boosterthon Fun Run. Here’s an example. A school buys candles for a fundraiser for $10 each. Students then sell the candles for $20 each. So the school makes $10 for each one sold. If 500 students sell three candles each, the school makes $15,000.

Choosing whether to participate in school fundraisers is up to you and your parents. But think of fundraising as another way to celebrate school pride, like wearing your school colors. It can be a fun group activity and a way to try out some of your sales and math skills as you tally your donations.

Stay Safe

Keep safety in mind when selling products for a fundraiser. Some schools don’t allow door-to-door sales. If they do, make sure you’re accompanied by an adult. The same is true if you plan to stand outside a store or in a residential area and wait for customers to approach you. Check your school’s fundraising rules before you get started. You’ll also need to know what forms of payment you can accept, such as checks, cash, or credit cards.

Family Challenge

Ask your parents if they’ve ever participated in fundraisers. What kinds of items did they sell, and what techniques did they use? Then make a list of the most important qualities of an effective salesperson.

—By Kathryn Tuggle

Click here for the Grade 4 Teacher’s Guide.

Extra! Click here to read a related article from TIME for Kids.