The Difference Between Sales and Proceeds
Before we dive into why donating 1% of sales is more generous than 10% of proceeds, let's take a quick look at the difference between these two terms. Sales are the total amount a company earns from its products or services. On the other hand, proceeds refer to the profit that remains after all costs associated with running a business have been paid.
For example, if a company sells $100 worth of product but has $80 in expenses related to producing and selling that product, then their proceeds are only $20 ($100 - $80). Therefore, if they donate 10% of their proceeds ($2), they are only giving away 2%. However, if they donate 1% of their sales ($1), then they are actually giving away 5%.
Why Donating 1% of Sales Is More Generous.
Now that you know what each term means and how it affects your donation amount, let's discuss why donating 1% of sales is often better than donating 10% of proceeds. First and foremost, it's essential to understand that businesses typically have many expenses—from production costs to overhead—and these can quickly eat into profits. Donating a fixed percentage (i.e., 10%) out of one's profits can mean virtually nothing when those expenses are taken into account. However, donating a fixed percentage (i.e., 1%) out of total sales ensures that charities will always get something regardless of what the business' costs may be for any given period. This helps ensure that charities receive consistent donations without fail instead of having some months where no money is donated because there were no profits made during those periods due to high operating costs or other factors.
Donating to charity is an incredibly rewarding experience both for businesses and donors alike! We hope this blog post has helped shed some light on why donating 1% out of sales rather than 10% out proceeds makes sense for many businesses looking to give back while still ensuring their own financial health and security. Ultimately, it comes down to each donor's personal preference; what works for one may not work for another! Whatever path you choose, though, know that even small donations can make a big difference in someone else's life!