How do I Calculate Fundraising Profit?

Usually, calculating fundraising profit is as easy as calculating the money earned from selling for-profit items. An individual can start by figuring out how much it cost to make or buy the product that will be sold in the fundraiser. Once a person has figured out this cost, he can then use simple subtraction to calculate fundraising profit. Basically, he can subtract the cost to make or produce the item from the total sale price; the answer to this basic math problem is the profit. In some cases, however, there are other expenses to include in the cost of a fundraising product or service, such as advertising, organization of the fundraiser, and shipping or delivery. To properly calculate a profit, these expenses must be subtracted as well.

An individual who needs to calculate fundraising profit may start out with a basic math problem. For example, if the leader of an organization starts a fundraiser of gourmet cookies, he will have to determine the cost involved to make the cookies. If it costs $2.00 US Dollars (USD) to make a batch of cookies, and each batch is sold for $5.00 USD, the fundraiser profit for each batch is $3.00 USD. If the people participating in the fundraiser sell 1,000 batches of cookies, he can use multiplication to calculate total profit. In this case, he could multiply 1,000 by $3.00 USD to come up with the total profit of $3,000 USD.

Simple subtraction problems work well when all the organization has to consider is the cost to make or purchase an item. In some cases, however, there are other costs involved that have to be considered in fundraiser calculations. If, for example, an organization begins a fundraiser that involves selling 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 for shipping to obtain the books, that could change the profit numbers.

If the same organization pays $50 USD to have 500 books shipped, it can divide $50 USD by 500 to determine the shipping cost of each book. The cost per book would be $0.10 USD in this case. As such, the cost of obtaining the fundraising product would be $10.10 USD each and the profit, if the books were sold for $20 USD, would be $9.90 USD. If 500 of these books were sold, the profit would be $4,950 USD. This method of calculating fundraising profit can also be used if an organization has advertising, organizational, or labor costs to include in its calculations.