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02/12/2008 08:34:44 AM · #26 |
I think you're just getting caught up in the wording. You approached a board member, who approached the director, who then said one of the guys in the past donated 10% back to the Y, and then that board member translated it back to you. Its not an uncommon practice, at least around me. Even the photographers that shoot Little League, donate 10-15% back to the leagues.
If you're donating it back to the leagues, the Y, etc.. you're helping the kids involved, even if its a stipulation in the contract. And being a donation, you can claim it come tax time.
A kickback would be going to the director himself.
If they're being legit, i'm sure they wouldn't have an issue giving you a reciept for your donation. |
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02/12/2008 09:07:11 AM · #27 |
in the real world of photography, it's rather simple.
a KICKBACK is an under-the-table payment to an individual in return for the individual influencing the outcome of the vendor selection.
revenue-sharing is just that: a predetermined split of the proceeds.
i don't do kickbacks, but i do revenue-sharing with almost every organization i work with. it's nothing but win-win. i get jobs, more jobs, and marketing support, the organization gets a little revenue that they may not have otherwise. there's nothing 'shady' about it. actually, it's quite the opposite. people know before they purchase that part of their purchase is going back to the organization, which gives them more incentive to buy. |
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02/12/2008 09:12:06 AM · #28 |
| Revenue sharing is common with school photographs. School PTAs, for example, get a small percentage of the take thus allowing them to pay for needed school supplies etc. If one vendor offers a better percentage, then that vendor might well get the job if their photography / printing is good enough. Non profits like YMCAs and schools need funds and this means of profit sharing helps with their need. |
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02/12/2008 09:37:41 AM · #29 |
Originally posted by pineapple:
Revenue sharing is common with school photographs. School PTAs, for example, get a small percentage of the take thus allowing them to pay for needed school supplies etc. If one vendor offers a better percentage, then that vendor might well get the job if their photography / printing is good enough. Non profits like YMCAs and schools need funds and this means of profit sharing helps with their need. |
This type of this is quite common all over. it's not really a kickback at all. If you will see it as a cost of doing business and deal with it in a couple of ways.
a) don't offer it
b) offer the 10% (or whatever they were asking) and factor that into you package price
c) offer a cheaper package price and less than 10% back.
I'm trying to get into doing they same sort of thisn and I'v found that it's become something that just expected. |
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02/12/2008 05:53:04 PM · #30 |
THANKS EVERYBODY FOR THE INFORMATION! Thanks to those that debated it out in the beginning, offered up legal definitions, straightened out what a kickback is and isn't, gave real world examples, and everyone else for their input. I hope this thread will be looked upon by people starting out and wondering the same things...because now they (and I) have pretty definitive answers.
I am going to run numbers so I can decide if/how to propose revenue-sharing with the organization and if I do, will definitely advertise that fact to all customers.
Thanks again,
-drew
Maybe I could get an SC member to change the thread title to: "kickbacks vs. revenue sharing" Edit: Thanks for the quick action,  frisca.
Message edited by author 2008-02-12 18:07:30. |
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02/13/2008 11:58:26 PM · #31 |
Originally posted by Skip:
people know before they purchase that part of their purchase is going back to the organization, which gives them more incentive to buy. |
For the most part I agree with you when we are talking about charities and/or it's public information but this is where my problems start.... For example: We know it's common in school photg (my kids school included) BUT most (closer to all) parents don't, so they (we) are basically paying higher prices without knowing that they are in effect giving $ to the school in exchange for higher prices... then the school asks for $ in a number of other ways. Now most parents would have no issue if they knew BUT I just find the hiding of the kick-back / rebate / profit-sharing / marketing-strategy (pick one or several) by the school dishonest... it's never mentioned anywhere by the photg or school.
Sorry... a rambling response by anyways.... |
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02/14/2008 03:54:00 AM · #32 |
Originally posted by robs:
Originally posted by Skip:
people know before they purchase that part of their purchase is going back to the organization, which gives them more incentive to buy. |
We know it's common in school photg (my kids school included) BUT most (closer to all) parents don't, so they (we) are basically paying higher prices without knowing that they are in effect giving $ to the school in exchange for higher prices... then the school asks for $ in a number of other ways. Now most parents would have no issue if they knew BUT I just find the hiding of the kick-back / rebate / profit-sharing / marketing-strategy (pick one or several) by the school dishonest... it's never mentioned anywhere by the photg or school. |
that's a really good point. i know it bugs the heck out of me when we start to get nickle-and-dimed by our school and pta, knowing they are amply funded...
personally, though, my prices are the same across the board; here is how i implemented revenue sharing (you know, what goes around comes around...). |
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02/14/2008 04:39:21 AM · #33 |
I fully agree with  ClubJuggle in his statements.
It seems, some people want to look too deeply into the issue and cause fault where there is no fault.
From what I gather from the OP is this,
The Y, is looking for a photographer. They contacted a 'NEWER' photographer and discussed what has 'Previously' been done. The Directory, in one of the 'Previous' examples stated that 'ONE' of the former photographers offered monies back to the Y (in the form of a percentage).
Now, I didn't see where the Director made it a stipulation, or even said it had to be done. From what I understood in the OP, is that it was brought up. Granted, the Y would love to see this type of deal happen again, but they can't ask for it. persay.
Anyway, We need more details about exactly what happen during this meeting to really understand this particular situation.
Now, I for one can not understand what the big deal is over 'giving something back'. Since the first long-term business transaction occurred business/people have given gifts in exchange for good will. Think about the President of the US, He receives gifts all the time, Expensive lavish gifts, only difference is, he can't keep them, they go to the next President L()L. (less they were specifically personal)
Once I have my studio open I plan on giving back to the community with or without business dealings with them. To me, its just the right thing to do.
Now, who has heard the term 'Greasing the Palm'? Now, if that was what was occurring here, then yes that is wrong. Because the gift shouldn't go to the individual, as pointed out earlier, but to the business entity.
So, if you are thinking about how 'Morally' right or wrong it is, if you are 'undercutting' the competition, well, the thing is, they have the same opportunity you have, and as long as it isn't an attack on the competition then you are in the clear legal'. Business is about money, check your morals at the door.
I just don't understand this argument.
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02/14/2008 04:40:48 AM · #34 |
Originally posted by Skip:
personally, though, my prices are the same across the board; here is how i implemented revenue sharing (you know, what goes around comes around...). |
I like that, its a really good idea.
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02/14/2008 12:55:24 PM · #35 |
 littlegett, the problem pointed out in my original post wasn't that I was looking too deeply into anything that was or wasn't said. I have contemplated profit-sharing with the local parks and recreation department, as well as the YMCA. The problem was that I didn't know what profit-sharing was. For some reason I had it in my head that if I cut a deal with the organization as part of being selected for the work, then I was doing something illegal (kickbacks). I asked the people here if I was correct, or if there was some way of going about this legally. After reading through all the help that was offered up in this thread, I now have a better understanding of how these things work and the difference between kickbacks (greasing a palm) and revenue-sharing (or other similar term).
On a personal level, I still have to make the decision about how to approach both the YMCA and Parks and Recreation Department (separate contracts I am hoping to reel in). I have to make the decision about bringing up profit-sharing or just negotiating the contract without the organization(s) getting anything except pictures out of the deal.
After having my questions answered by the folks here, I can make better business decisions and contract negotiations. So once we had things straightened out as far as kickbacks vs. profit sharing, I asked for the thread title to be changed and added a few edits so that anyone wondering along could see what the general consensus is on the issue. When I first questioned this topic, I searched the DPC forums for "kickbacks" as that was the only term I knew. I came up with a few threads, but none that specifically answered my question (thus the new thread). By having the thread renamed, I hoped that folks in the future searching for "kickbacks" with the same general questions I had, could find this thread and figure out that giving money back to an organization as part of a contract is not illegal, and furthermore, is widely accepted and practiced.
-drew |
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02/14/2008 02:06:12 PM · #36 |
Originally posted by drewbixcube:
... giving money back to an organization as part of a contract is not illegal, and furthermore, is widely accepted and practiced.
-drew |
Where you could still run into a problem is if you try to deduct your contractual obligation (fee, revenue-sharing, whatever) as a charitable contribution on your taxes. |
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02/14/2008 03:58:42 PM · #37 |
Originally posted by GeneralE:
Where you could still run into a problem is if you try to deduct your contractual obligation (fee, revenue-sharing, whatever) as a charitable contribution on your taxes. |
Yeah, I think Terry and Scott read up on the "legaleze" and said you can't deduct it as a "donation" but maybe can list it as a "business expense". |
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02/14/2008 10:06:35 PM · #38 |
I'd consider the revenue sharing as rental of a place of business, or as an admission fee. It also is a guarantee that you are the one pro photographer there (be sure to put that in your contract).
If you were to set up a portrait booth in a mall, or at a county fair, you'd have to pay for the space. This is a similar situation--its like paying rent.
As far as taxes go, the fee should be a business expense. This is better than a charitable deduction becasue it reduces your income. If your total income is too high, you lose charitable deductions, so taking the fee a business expense is at least a wash, and may work out better. |
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