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Distinguish between costs, revenue, and profit
Explain how profits keep a business viable
Explain why it is necessary and desirable for
some businesses to be not-for-profit
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Bequests
Cost
Endowment
Not-for Profit
Organization
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Profit
Profit Margin
Revenue
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Profit
Cost
Revenue
These will be the answers to the following
questions
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The school football team is discussing a possible fundraising
event. They have decided on a school wide barbecue. Hot
dogs, buns, and condiments will run the team about $400
and the local grocery store has agreed to donate water and
sodas.
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Teachers and parents have offered to volunteer their time
and grills to help with the event, and the barbecue will be
held on the school football field during lunch.
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(Cost)
The team decides to sell tickets for $4 per person, and 350
students have prepurchased their tickets.
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(Cost)
(Revenue)
The event is a success! After subtracting the amount that is
spent on supplies, the team earns almost $1,000.
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(Profit)
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Cost is the expense required to acquire or
produce something. Think about compact discs
(CDs). The company that produces the CD
pays employee salaries, rent, equipment, and
resources needed to produce the finished
product. If the expense required to make 50
CDs is $300, the cost to make one CD is $6
($300/50).
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Sales revenue is the money a business receives
when it sells a product or service.
For example, if a company that produces CDs
receives $9 for each CD it sells to your local
music store, that $9 is considered sales revenue.
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(Of course, your local music store sells it to you for
considerably more since they have their own costs to
cover.)
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Profit is sales revenue less cost.
The profit for our CD company is $3 per CD,
which we calculate by subtracting costs from
revenue ($9 - $6 = $3).
Profit is also sometimes referred to as net
income.
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Profit margin is a measure of a company’s
profitability, usually measured as a percentage.
In the example above, the profit margin is 33%
(profit divided by revenue).
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If you owned a sporting goods store, what types of
costs would you incur?
How would you calculate your revenue? Your
profit?
What can you list as the benefits of profit?
Profits enable businesses to prosper and grow, which
provides jobs for employees, allows needed goods and
services to be produced, helps suppliers get more
business, creates tax revenue for cities, counties, states,
and the federal government, etc.
 Profits are essential for a healthy business and a healthy
economy!
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One of the goals of most companies is to earn a
profit
The football team from the previous example
did so well with the school barbecue that they
are thinking of selling hot dogs every Friday
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Download- Worksheet: What’s the Profit?
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Which groups thought that Friday barbecues would
be a good money-making venture for the school
football team?
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Download- K-W-L Chart: Profit
Download- Reading: Profit
One thing this reading taught us about profit
is…
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Download- Assignment: Planning a Fundraiser
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Each group needs to choose a club, team,
organization, or charitable cause for which to raise
money.
Work as a group to identify a way to raise the money
and evaluate the costs, revenue, and potential profit
so that they can determine if the fundraiser will be
successful
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Choose four or five different plausible
fundraising activities
Work together to predict revenue and profit for
each of the activities
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It is very important to be as accurate as possible with
costs, because they have such an impact on the profit
margin.
Use the results of their predictions to decide which
fundraiser would be most effective for your cause
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Which cause did you chose to work on?
Which fundraiser did you decided on?
What is your estimated cost, revenue, and
profit are for that fundraiser?
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Not-for-profit organizations are very important
to the US economy.
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Not-for-profit groups have no shareholders.
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[True]
[True]
Not-for-profit organizations must pay taxes.
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[False]
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Religious organizations do not qualify as notfor-profit organizations.
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[False]
The ultimate goal of any not-for-profit
organization is to make money.
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[False]
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Make predictions on what a not-for-profit
organization is.
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not-for-profit-often those formed to provide a public
service—are intentionally set up to not make a profit
 American Lung Association, Engineers Without
Borders, Seeds of Peace, Salvation Army, Shriner’s
Hospital for Children, NAACP, National Audubon
Society, United Way, etc
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You are going to learn about not-for-profit
organizations, their financing methods, and the
difference between not-for-profit and for-profit
organizations
Download- Reading: Not-for-Profit Organizations
Read and list the article subheadings in their notebooks
 Read the article
 Review the text and list three to four key words from each
subheading
 Write one to two sentences summarizing each
subheading, using at least two of the key words
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If you had the choice to work for a for-profit or
not-for-profit organization, which one would
you choose? Explain your reasoning.
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Research non-profit organizations in the south
jersey area
Create a PowerPoint presentation describing the
non-profit organization
Work in pairs
Include
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Name
Purpose
History
Current state of the organization
Predict what would happen if this organization were
forced to turn a profit.
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Conduct additional studies of not-for-profit
organizations in the community
Write individual reports or create a PowerPoint
sharing key information about the
organizations.
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Research what is needed to form a not-forprofit or a for-profit company
Create posters detailing what is required.