Which one did you use this fall?  Which one is the best choice for your group?

This is always a big discussion on our message boards and in our PTO Today community, mainly because the differences are so stark.  I recently received an email about this topic from an expert that brought a fundamental new concern into the debate.  I’ll explain below.

First, to set the table what we’re talking about here,  is whether you should run your fundraiser so that all sales are paid for up-front (pre-pay) or whether you should take orders and then collect money only at delivery time (post-pay).

I can give you three facts in this debate:

1. Almost all group will make more profit with post-pay-- usually a lot more.

2. You will likely have a bounced check or two or get beaten in another way in post-pay (though #1 still applies).

3. There’s some extra work involved with post-pay, as sellers need to go back and collect money at delivery time.

This expert I heard from – a long-time salesman in the fundraising business – gave this perspective:

“A postpay sale is going to generate some "no pay" sales.  That's a given as "the cost of doing business."  It is also true that a postpay sale generates approximately double the sales volume of a prepay sale.  As an example, (one of my schools) had a total sales of about $4,500 on their prepay fall fundraiser in 2007.  They switched to postpay in 2008 and had a total sales of over $20,000.  They more than quadrupled the fundraiser profit that they could spend on behalf of the children, and did it with the same size of enrollment.  Yes, it takes a little effort to collect all the money, but they liked the additional money so much that they are doing a postpay sale again this fall.

A second reason relates to the issue of trust.  When parents are told they must have the money up front, they are reluctant to ask their co- workers to buy, lest the co-worker be insulted, thinking that the parent doesn't trust them.  An even worse situation is one where a school will not accept checks at all. This indicates a severe lack of trust and is pretty much guaranteed to make parents decide not to participate at all.   If you have less than half the parents participating on a fundraiser, you have a lack of trust on the part of the parents in the school administration, simply because the parents feel that they are not trusted."

The new factor for me was a discussion of how our credit card and debit card and online banking society has made prepay so difficult. Years ago in a prepay sale, the neighbor or co-worker or aunt or uncle pulled out a check and paid for their order on the spot.  Today, I haven’t carried a check in my wallet in several years, and I rarely have more than $20 or $30 in cash in my pocket. Many days, I couldn’t help the prepay seller, even if I wanted to.  The stats show that I’m far from alone in using plastic and online banking (and few paper checks) in my daily routine. This is a huge factor making prepay so difficult.

Hadn’t thought of that.

I’m interested in your take and your experiences on this. Did you prepay or postpay this year? Seeing any trends at your school? Love to hear ‘em.

PS – Are you following us on twitter yet?  @TimPTO and @ptotoday.