A debate often heard in Units is “Should we participate in the Council Prize Program or take the Cash Out Option”.
There are really two questions in this statement:
- Do we want to do something different from the Council Prize Program?
- Do we want to increase our commission percentage to Scouts and have and no prizes?
Let’s talk first about why there is a ‘incentive program’ with most fundraisers. The purpose of any incentive program is to motivate the seller to sell to more. There are two ways prize programs are typically structured.
- Increasing the percentage value of the prize as the levels increase
|$250||$10 Gift Card or prize||4%|
|$500||$25 Gift Card or prize||5%|
The percentage of the value of the prize goes up the more you sell encouraging Scouts to sell more to get more. This has been the more common approach with popcorn especially at the higher sales levels. This system is more about the value of the prize than ‘getting to the next level’. It is more difficult to estimate the average percentage of the sale this program will cost.
- Tiered so it is easier to get to the next level
|$250||$10 Gift Card or prize||4%|
|$375||$15 Gift Card or prize||4%|
As you can see it takes $250 to get to the first level. However, it only takes an addition $125 to get to the next level. One often sees this program with elementary school fundraisers like cookie dough or wrapping paper. The advantage with this system is it is easy to predict the prize program will cost no more than 4% of your sale.
If the delta, or distance between sales levels, are the same and the percentage is the same, it is no longer an incentive program. It is a reward program. In other words, it is just a bonus for based on the amount the Scout sells.
Council prize programs nationwide ran on average of 3.7% from 2007 to 2012. In 2012, Trail’s End encouraged the use of the Keller Prize program which allowed multiple prizes. For example, if a Scout sold $400, they could get a prize from the $150 level and the $250 level (totaling $400 in sales). With the gift card program, a Scout would only get one prize at the $350 level because the next prize level was at $450. While this appeared to be a better deal for the Scout, the prizes were often of a lesser quality and the total cost of the prize program to the Council increased to an average of 4.7% nationally. Because of this, many Councils give Units the option to do their own prize program. Many Councils are giving 3-4% in an ‘Opt-Out’ Bonus because it costs less to the Council and it takes the financial burden off the Council on return of damaged or faulty prizes. Other Councils are going back to the Gift Card Program to lower their overall prize cost.
Units who opt out of the prize program tend to budget their incentive program to the percentage given to them by the Council or 3-4%. However, this may not be enough.
In a survey conducted in 2015, the Top 100 Units in each of the four Scouting Regions were asked to complete a survey. These Units averaged just over $28,000 in sales. In this survey, the question was asked, “Outside of the Council Prize Program or other Council sponsored prizes, did your Unit offer additional prizes or gift card incentives to Scouts for the Popcorn Sale?” Of these Units, 82% stated they offered their own Unit-level prizes. In this same survey, a follow-up question was asked. “If Yes, what percentage of your Gross Sale did your Unit spend for these additional prizes?” The results were surprising.
Most Units allocated 1%-2% of their sale toward Unit prizes. Remember, these Units sold on average $28,000. This means even these Units allocated $280-$560 for Unit Incentives on top of the Council Prize Program.
At the other end of the spectrum, there were 12% percent of Units that allocated 5% or more of their Gross Sale toward Unit Prizes. This equates to $1400-$1960.
Remember, an Incentive Program is designed to increase the sales of individual Scouts. Giving Scouts an additional amount in their Scout Accounts, which may have tax implications, does nothing to incent a Scout to sell more with one exception. The exception is the activity which is out of the norm of the regular Scouting calendar and requires additional funding. Examples of this could include National Jamboree, World Jamboree, one of the National High Adventure Bases or a trip to Hawaii (check out this article on a Troop that did just that).
If you want to get as many Scouts (and parents) motivated about the Popcorn Sale and you opt out of the Council Prize program, I recommend setting aside a minimum 5% of your Gross Sale for Unit Prize Incentives. These incentives could be Individual Scout Incentives, a large Unit-wide incentive or a combination of both.