Over yonder in the Fog Signal Building, JC proposes a special HL edition depicting Cape Hatteras as it is moved to its new location.

Suggested is a 6500 edition size for this special piece at $125 each.

Also suggested is a special limited edition glass domed base for the piece, replete with extra trees, outbuildings etc. This special base could have an edition size held to 1500 and sold for $250 each. $200 out of each base going to help fund a "Harbour Lights' Lighthouse Trust Fund". The proposal suggests the $300k goes toward lighthouse restoration and maintenance. Somewhere along the way HL themselves kicks in $50,000 of their money.

Let's look at these numbers. (We gotta do sumthin in this forum!)

First the 'Special Domed Base' (SDB). 1500 of these puppies at $250 each is $375,000 from which $300,000 goes to the Trust. That leaves $75,000 for Harbor Lights. I don't have a clue how much it costs to make such a SDB, but if all costs total no more than $50 each, then they break even but make no profit. Anything less than $50 per base is profit. Since the base is something of value each buyer receives, will HL disclose their costs (or structure the deal in a way) to allow the difference to be tax deductible?
(Note: I'm assuming the base is not sold through the dealer channel.)

Now, lets look at the 'Hatteras on the Move' (HOTM) piece itself. 6500 of these at $125 is a tidy $812,500 going somewhere. Assuming these are sold through the normal dealer channel at the standard 50% markup, thats a casual total of $406,250 pocketed by retailers.

This leaves another $406,250 to HL for design, production, and distribution costs. Again, I'm clueless on what it costs on a per piece basis to make any model, much less the HOTM. If their margin is 50% that puts it around $31.25 per piece for 6500, if 25% their per piece cost is twice that. After 'donating' $50,000 to the Trust, based on these figures, they'd end up with somewhere between $50,000-$150,000 profit. Anybody have a better guess on per piece cost?

So out of over a million dollars ($1,187,500) spent by collectors approximately 30% goes toward preserving and maintaining our nation's lighthouse heritage. Hmmm... I've always heard the general rule of thumb is only to give to charities where the overhead is no more than 50% and at least 50% goes directly to the charity recipients.

Granted the HOTM piece is not directly tied to the Trust (except in people's minds) so here I am guilty of connecting the two. But I think it helps put things in perspective.

If one is really serious about lighthouse preservation and establishing a Trust Fund, why not just ask for $125 and $250 donations instead of wrapping it together with model collecting? Would HL dare go outside their dealer network for distribution of HOTM and cut the price in half to yield the same deal? Or keep the price the same and put what would have gone to the dealer channel into the Trust - $750k could make a pretty good splash in the lighthouse restoration pond?

I don't know if these are the right questions but somehow I think they're worth asking. Its not the warm fuzzy side of the hobby but hey, Fog Signals go everywhere. :-)

Rgds,
__
/im

[This message has been edited by JTimothyA (edited 12-13-98).]