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Purpose & Impact

How Much Should You Donate Per Sale?

Compare fixed and percentage donations with hypothetical break-even examples, VAT and rounding assumptions, binding caps or minima and UK claim cautions.

· Zenko Protocol · 14 min read
Zenko fox crossing stones labelled fixed amount, percentage of price and percentage of gross profit.
Hypothetical worked examples, not measured campaign results or approved advertising claims. Open the full-size illustration for small labels. The article below explains the details in accessible text.

There is no single right figure. Set the donation from your own unit economics and break-even point, then describe the promise so a customer can check it. A generous-looking donation that consumes the available contribution is not a sustainable campaign.

This guide compares three donation bases, works through three hypothetical scenarios, explains when caps and minimums affect the arithmetic, and covers UK wording requirements. It is part of our wider guide to cause marketing. Use the free Cause Marketing Calculator for planning, not as approval of its generated advertising wording.

A benchmark, and why it is not a target

The verified abstract of a 2024 field study reports 63 cause-related promotions across 20 fast-moving consumer goods categories, an average donation of 3.2% of product price, average weekly sales lift of 4.9% and average campaign duration of 11 weeks. These are sample averages, not forecasts or a recommended donation rate. In a separate AMA interview, the researchers stress wide variation, with some campaigns substantially outperforming the average. This summary uses the original abstract and that public interview, not a full-paper methods review.

If a donation and discount launch together, a simple before-and-after comparison cannot separate their effects. If volume permits, randomise customers or stores between no offer, donation only, discount only and both. Otherwise report the combined offer's result. The researchers found that price promotions could complement cause promotions; that does not mean the whole combined lift came from the donation.

Three ways to set the donation

Basis Example Planning advantage Watch out for
Fixed amount per sale £1 per item Simple to cost and explain Can consume a large share of a low-priced item's contribution
Percentage of price 5% of a clearly defined price Unit amount varies with price; total also varies with units sold Ignores costs and can consume much of a thin gross contribution
Percentage of gross profit 10% of clearly defined gross profit Contribution varies with the chosen gross-profit basis Customers need a clear definition; it does not guarantee net profitability

The England and Wales section 58 statutory test can encompass different sale-linked donation bases. It is not enough simply to mention a charity: assess the business, promotional venture and representation of charitable contributions, including the exclusions for fundraising businesses and connected companies. Choosing a fixed amount rather than a percentage does not remove the need to check the rules. Equally, the three bases do not produce identical disclosure or calculation requirements.

The break-even formula

These are hypothetical planning examples, not campaign results. Prices exclude VAT and sales tax. Gross margin is a percentage; multiplying it by net price gives estimated gross contribution per sale before campaign costs, overheads and tax. The calculator rounds that contribution and each percentage-based donation to the nearest penny per unit. It treats donations as straight costs with no tax adjustment. Its percentage-of-gross-profit option uses this simplified unit-contribution estimate, not a full set of company accounts.

With no binding cap or guaranteed minimum:

Extra sales needed = (campaign cost + donation on baseline sales) ÷ (gross contribution per sale − donation per sale), rounded up to a whole sale.

This assumes positive unit contribution after the donation, unchanged unit economics and baseline sales that would have happened anyway. Donations on those baseline sales are still campaign costs. If unit contribution after donation is zero or negative, this uncapped formula cannot establish a finite break-even for positive campaign liabilities.

For a cap or minimum, use a piecewise calculation. Define:

  • B = baseline units without the campaign; N = total units with it, with N ≥ B.
  • g = estimated gross contribution per unit, rounded to pennies.
  • d = donation per unit, rounded to pennies.
  • K = other campaign costs.
  • m = guaranteed minimum; c = donation cap, with 0 ≤ m ≤ c. Use m = 0 for no minimum and c = ∞ for no cap.

D(N) = max(m, min(c, d × N)). Equivalently:

Region Total donation D(N)
d × N < m m
m ≤ d × N ≤ c d × N
d × N > c c

Incremental campaign contribution = (N − B) × g − D(N) − K. Find the smallest whole N ≥ B for which this is at least zero; extra sales are N − B. This is a simplified contribution comparison, not net profit or a tax calculation. A cap changes the donation, not the number of products you can sell. A minimum above a cap is an invalid set of assumptions for this model.

Three worked scenarios

All prices below are net of VAT. Scenario B is a hypothetical budgeting scenario, not approved for advertising. No capped every-sale claim is offered as usable customer copy.

A B C
Net price £40 £25 £60
Gross margin 50% 40% 55%
Estimated gross contribution per sale £20.00 £10.00 £33.00
Baseline sales without campaign 5,000 2,000 800
Other campaign cost £2,000 £1,500 £500
Donation basis £1.00 per sale 5% of net price 10% of estimated gross contribution
Calculated unit donation £1.00 £1.25 £3.30
Cap or minimum None Modelled cap £3,000 Guaranteed minimum £1,000
Unit contribution less unit donation in proportional region £19.00 £8.75 £29.70
Donation at baseline sales £5,000 £2,500 £2,640
Donation plus other campaign cost at baseline £7,000 £4,000 £3,140
Extra sales to break even 369 458 uncapped; 450 capped 106
Lift on baseline 7.38% (7.4% rounded) 22.9% uncapped; 22.5% capped 13.25%

Scenario A. £7,000 ÷ £19 = 368.421..., so 369 extra sales. Baseline gross contribution is 5,000 × £20 = £100,000. With the campaign, 5,369 × £20 − £5,369 − £2,000 = £100,011: incremental campaign contribution is £11. At 368 extra sales it is −£8. The threshold is therefore 369 whole extra units, before overhead changes and tax.

Scenario B. Without a cap, £4,000 ÷ £8.75 = 457.142..., so 458 extra sales. At 458, incremental contribution is £7.50; at 457 it is −£1.25. With the hypothetical £3,000 cap, the donation reaches that amount at 2,400 total sales. At 2,450 total sales, 450 × £10 − £3,000 − £1,500 = £0. At 2,449 total sales it is −£10. Thus the capped threshold is 450, not 458. At 2,400 total sales incremental contribution remains −£500, so the cap binds before capped break-even. This shows a budgeting effect, not permission to advertise an every-purchase donation that stops benefiting the cause.

Scenario C. £3,140 ÷ £29.70 = 105.723..., so 106 extra sales. At 906 total sales, the donation is £2,989.80 and incremental contribution is 106 × £33 − £2,989.80 − £500 = £8.20. At 105 extra sales it is −£21.50. The £1,000 floor is nonbinding at 800 baseline sales, where the donation is already £2,640, and at break-even. It binds at 303 total sales or fewer: 303 × £3.30 = £999.90; 304 × £3.30 = £1,003.20. It protects the charity at low volume but does not change this scenario's break-even.

A genuinely binding minimum. At a £40 net price, 50% margin, 100 baseline sales, £500 campaign cost and £1 per sale with a £1,000 minimum, break-even is 75 extra sales. At 175 total sales, the floor still applies: 75 × £20 − £1,000 − £500 = £0. At 74 extra sales, the result is −£20. Applying the simple proportional formula would give the wrong answer because it would ignore the binding minimum.

These results match the live calculator checked on 11 October 2026 and independent whole-unit boundary calculations. They are not actual campaign outcomes.

Caps and guaranteed minimums

A cap limits the modelled donation, not every possible campaign loss. A guaranteed minimum sets a contribution floor. Either affects break-even only if it binds; Scenario C demonstrates a minimum that does not.

CAP 8.33.4 requires the contribution calculation basis and whether the promoter's contribution is limited. Rule 8.33.5 separately says not to impose a cut-off for consumer contributions where an amount is stated for each purchase, and that money collected above a stated target should benefit the cause on the same basis. Disclosing a cap does not automatically make a capped per-purchase promise acceptable.

Treat Scenario B and the calculator's cap feature as budget modelling, not approved customer wording. Ask CAP Copy Advice or a qualified adviser about the exact mechanic before launch. Describe any guaranteed minimum accurately as well. A minimum is not shown by these sources to be inherently unlawful, and the sources do not impose a universal donation percentage or minimum amount.

Price, VAT and the words "margin" and "profit"

Enter the price before VAT or sales tax. A £25 VAT-inclusive price at 20% VAT becomes £20.83 when entered to the nearest penny. At 40% gross margin, the calculator uses £8.33 gross contribution per sale. A donation of 5% of that net price rounds to £1.04 per unit. These are per-unit penny amounts, not an unrounded aggregate calculation. Using Scenario B's other assumptions with these net-price figures gives 492 extra sales; the £3,000 cap is not binding there. At 492 extra sales the incremental contribution is £6.68; at 491 it is −£0.61.

If the public promise instead means 5% of the VAT-inclusive £25 selling price, the donation is £1.25. Enter that fixed amount and make the basis explicit. Do not silently reduce the customer's promised donation when removing VAT for the margin calculation. Ask your accountant which treatment applies.

Gross margin is a percentage. Conventional gross profit is revenue excluding VAT less cost of goods sold, not revenue less every cost of making and selling a product. Here, "gross contribution per sale" is the calculator's planning estimate from net price × gross-margin percentage. It is not net profit. A public profit-based promise needs an agreed accounting definition and treatment of returns, discounts and relevant costs, not the ambiguous phrase "10% of gross margin".

Wording the claim under UK rules

For a promotion within England and Wales commercial-participator rules, section 60 requires the beneficiary identity, applicable allocation between institutions and the notifiable charitable amount: actual if known, otherwise estimated as accurately as reasonably possible. This charitable sum is not the business's own remuneration. The prescribed signed written agreement must precede the qualifying representation. A charity mention alone is not the section 58 trigger, and a charitable institution need not be a registered charity.

CAP 8.33–8.34 separately require a named beneficiary and evidence of a formal agreement; specify the nature and objectives if it is not a registered charity. Explain the benefit, calculation basis and relevant limits, do not exaggerate, and provide the current or final total if asked. Where part of the price is donated, CAP expressly accepts an actual amount or percentage of price. Other charity-linked promotions must state the total contribution or a reasonable estimate. The statutory notifiable-amount requirement must also be met.

A percentage of the customer price is not a percentage of gross profit. Fundraising Regulator guidance illustrates a profit-percentage promise accompanied by an expected minimum sum. This does not make a percentage alone universally sufficient, or every percentage claim legally unsettled. Have the actual calculation, estimate and wording checked. That guidance's older England/Wales £100 remote-payment passage should not override the £150 statutory change from 30 September 2026 and its transitions.

Rather than copy unfinished advertising templates, prepare a review brief:

Scenario Information the adviser and charity need Status
A, fixed amount Named beneficiary and eligible product; £1 per sale; period, returns/eligibility terms; no cap or minimum; estimated total £5,000 at the stated 5,000-sale baseline, updated as appropriate Planning facts, not approved customer copy
B, price percentage and cap 5% of the specified net-price basis; £1.25 unit amount; proposed £3,000 cap; beneficiary, period and all eligibility terms; baseline estimate £2,500 No usable capped every-sale template. Review the mechanic under CAP 8.33.5; adding "up to £3,000" alone does not make it acceptable
C, gross-profit basis and minimum Defined accounting basis; modelled £3.30 per unit; beneficiary, period and eligibility terms; £1,000 guaranteed minimum; £2,640 estimated baseline contribution distinguished from the guarantee Planning facts, not approved customer copy; the estimate is not the guaranteed minimum

Scotland has its own agreement and information rules. Northern Ireland's equivalent provisions remain prospective, with England/Wales or Scotland practice recommended by the Fundraising Regulator. Advertising, consumer protection and applicable fundraising standards still matter. See Commercial Participators: The UK Rules for Charity-Linked Sales. Final CMA207 explains the DMCC unfair-commercial-practices provisions applying from 6 April 2025: a false or materially incomplete charity claim can breach the applicable misleading-action or omission tests, including likely effect on the average consumer's transactional decision. It is not approval of any donation template.

Tax

HMRC guidance on company gifts and the Company Taxation Manual explain relief for qualifying company charitable donations. Relief depends on the payment and relevant conditions; it is not automatic for every charity-linked commercial arrangement. Ask your accountant about the actual agreement, any benefits received, Corporation Tax and VAT. The calculator and worked examples do not model tax relief or certify the tax treatment of commercial-participator payments.

Setting up the test

Before launch, record baseline assumptions, dates, unit economics, the donation basis, any minimum or proposed cap, and the agreed measurement design. Comparing observed sales with a forecast alone does not establish causation. A randomised holdout, or a defensible quasi-experimental design where randomisation is not feasible, needs adequate volume, suitable analysis and uncertainty reporting. HM Treasury's evaluation guidance explains the counterfactual problem.

Compare estimated incremental sales and their uncertainty with break-even. If an uncertainty interval spans the threshold, the test does not clearly establish payback. How to Measure Cause Marketing Without Fooling Yourself and rewards campaign measurement explain the approach. Delivery evidence and commercial return are different measures.

The Cause Marketing Calculator models these donation bases, caps and minima. Its output is a simplified contribution plan, not net profit, a causal forecast, tax advice or approval to use generated wording in advertising.

FAQs

How much should I donate per sale?

There is no universal figure. Model unit gross contribution, baseline sales, the donation and other campaign costs. The 2024 field-study abstract's 3.2% average donation is context, not a recommendation or forecast. Check affordability and whether the promised support can be evidenced.

Should I donate a percentage of price or a percentage of profit?

A price percentage is simple to describe but ignores costs; state whether its basis includes VAT. A gross-profit percentage responds to that accounting basis but needs a clear definition and does not guarantee net profitability. A fixed amount is easiest to cost. CAP 8.34 permits an actual amount or percentage of price where part of the price is donated; separate statutory information requirements still apply.

How do I work out how many extra sales I need?

With no binding cap or minimum and positive unit contribution after donation, divide campaign cost plus donation on baseline sales by unit gross contribution minus unit donation, then round up. The hypothetical £40 net-price, 50%-margin product with £1 per sale, 5,000 baseline sales and £2,000 campaign cost needs 369 extra sales. For binding limits use D(N) = max(minimum, min(cap, unit donation × N)) and find the first whole total sales N where (N − baseline) × unit gross contribution − D(N) − campaign cost is nonnegative. The calculator rounds contribution and percentage donations to pennies per unit; its output is contribution, not net profit.

What do the UK rules say about stating a percentage donation?

CAP accepts a stated percentage of price where part of that price is donated. England and Wales commercial participators must also give the information required by section 60, including the applicable actual or carefully estimated notifiable charitable amount. Profit-based claims need a clear definition and calculation basis. Fundraising Regulator guidance illustrates a profit-percentage statement with an expected minimum amount. Check the actual promotion rather than assuming one template fits every model.

Can I put a cap on my donation?

Do not assume a disclosed cap is acceptable for an every-purchase promise. CAP 8.33 requires limits on the promoter's contribution to be stated, but rule 8.33.5 also prohibits a consumer-contribution cut-off where an amount is stated for each purchase. Treat the calculator's cap as a budgeting scenario, not approved advertising wording. Ask CAP Copy Advice or a qualified adviser about the exact promotion.

Can a company claim tax relief on charity donations?

HMRC provides for relief on qualifying company charitable donations, subject to the applicable conditions. Do not assume a payment under a commercial-participator arrangement qualifies in the same way. Ask your accountant about the actual agreement and VAT; the calculator does not include tax adjustments.

Sources

Checked 11 October 2026. Hypothetical calculations are planning illustrations, not campaign results or legal/tax approval.

This article is general information, not legal, tax or financial advice. Check current rules and obtain campaign-specific advice before launch.