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How Fundraising Incentive Programs Work

There are basically 2 things to consider if you want to know how fundraising incentive programs work and how students are rewarded for selling. One is the basis used to reward sellers. Students can either win prizes based on the dollar amount, or number of items sold.

The second consideration is how prizes are actually won. Students can either accumulate prizes for selling additional items, or they can move up to higher prize levels and win a bigger and better prize as the number of items sold increases. This is commonly referred to as a noncumulative or pick-a-prize program. Let’s look at this more closely.

Dollar Amount Raised

When students are rewarded for the total amount of money turned in, the advantage goes to the students who are able to sell more of the higher-priced brochure items. A prize brochure that uses this format may work something like this:

  • Sell $100 worth of merchandise and win prize level A.
  • Sell $250 worth of merchandise and win prize level A + B.
  • Sell $400 worth of merchandise and win prize level A + B + C.

Brochure Items Sold

When students are rewarded based on the total items, the advantage goes to those who are able to sell more of the lower priced items. Here is an example of a typical prize brochure based on items sold:

  • Sell 1 item and win prize a participation prize.
  • Sell 5 items and win prizes from the first 2 levels.
  • Sell 10 items and win prizes from the first 3 levels.

Cumulative vs. Noncumulative Incentive Plans

Another consideration is whether or not the prize program is cumulative. In other words, are students rewarded with more prizes when additional items are sold, or do they get to pick a prize? Many think the cumulative prize program is better; however this may not always be the case. Here are some advantages and disadvantages:

Advantages to Cumulative Prize Programs:

  • Students win more prizes as they reach higher prize levels.
  • As they sell additional items, they get more prizes.

Disadvantages to Cumulative Prize Programs:

  • In order to be able to offer more prizes the quality of each individual prize is lower.

Advantages to Noncumulative Prize Programs:

  • Even though students are only able to pick one prize, the quality is usually better.
  • Students usually get to choose which prize they want.

Disadvantages to Noncumulative Prize Programs:

  • Students are often disappointed that they only get one prize
  • Students must indicate their prize choice on the order form, otherwise a default prize is chosen for them.

The Hybrid Prize Program

Many companies are now combining the cumulative and noncumulative method into one prize program. For example, the first 4 or 5 prize levels may be cumulative, and then above a certain point students win only the prize from the highest qualified prize level. For example, if a student sells 80 items and qualify for level H, they would receive the prizes from levels A through E and then only the prize at level H. They would not receive level F and G prizes. Many students like this option because it combines the advantages of both types of prize programs into one.

When choosing a prize program it's important to consider how achievable the prize levels are going to be for your students as well as the quality of the prizes. Because all students should be encouraged to sell, the lowest prize levels should be obtainable. However, choosing a good prize program is only the first step. Consistently promoting it throughout your sale is where you really make your money.

See our prize programs