Raising money for a cause is challenging – as most of you already know. As a fundraising professional you want to both hit all your goals and build a trustworthy nonprofit or charity brand. One way to do this is by staying on top of industry trends and exploring newer avenues of fundraising (such as online raffles) that have the potential to provide a higher return on investment (ROI).
In this article, let’s briefly review different types of fundraisers — both in-person and online, and dive into the shift to online fundraising while zeroing in on online charitable gaming-based fundraisers and their incredible potential to raise money. Finally, we’ll end with a few ways that you can position your nonprofit or charity to stay ahead in the fundraising game.
Raffles and lotteries: The new era of nonprofit fundraising
For decades, nonprofits and charities across various industries have raised funds through multiple channels, such as direct mail, events (concerts, galas, auctions, etc.), sponsorships, grants, door-to-door asks, phone solicitations, online fundraisers, email marketing, crowdfunding, and more.
Software Advice surveyed nonprofit event planners to better understand the types of events that have the highest return on investment (ROI). Here’s a snapshot of a key finding from the survey:
The key takeaway: Fun runs and walks were the easiest events to plan, generating moderate to high revenue for nonprofits of all sizes.
Most traditional events demand more resources for planning and marketing, and require higher upfront costs — which are usually limited. Additionally, these events are focused on one-time donations instead of turning supporters into repeat donors. Direct asks (whether done door-to-door, telephonic, direct mail, or via email) are not engaging, require time and people, and generally, aren’t the most effective of ways to ask for donations.
The recent shift from physical to online fundraising addressed most of these issues and yielded a much higher ROI. The COVID-19 pandemic in 2020 was a key catalyst in driving the adoption of digital versions of many in-person events.
The Global Trends in Giving Report highlighted that 63% of donors in Canada and the United States prefer to give online with a credit or debit card. And among all online fundraising events or programs, most of the donors (47%) gave through online raffles and sweepstakes – highlighting the rise of an engaging and fun-filled online fundraiser.
The shift in public perception: A win-win scenario for nonprofits and their supporters
Until the late 1990s and mid-2000s, charitable gaming was associated with gambling — primarily as a public policy issue, and due to its effect on society. Luckily, this perception has since evolved and people see charitable gaming as a credible donation option.
In Canada, for example, a national survey conducted by the Canada West Foundation (CWF) in the year 2000 found that 63% of Canadians agreed that gambling is acceptable overall. Respondents believed that it reduced the overall tax burden, provided a source of entertainment, had important economic development benefits, and helped fund worthwhile causes.
Four key takeaways from the CWF survey were:
- Raffles and lotteries stood out as the most popular types of charitable games.
- Charitable gaming-based fundraisers can produce a high return on investment (ROI).
- 36% of respondents (who used charitable gaming for fundraising) identified it as the fundraising method that generated the most revenue for their organization, while another 24% reported that it was their second most significant source of revenue. A breakdown by industry showed health organizations were at the top (22%), followed by culture, art, and recreation (19%), social services (16%), education and research (12%), others (5%), and religion (2%).
- Charitable gaming is a cost-effective fundraising method. Three quarters of respondents agreed to this statement.
Further, the survey highlighted that religious organizations were the least likely (8%) type of nonprofits to use charitable gaming to raise funds — this trend, too, has now changed. For instance, consider an Ascend client, the Knights of Columbus. They are a worldwide faith-based organization with over two million members and approximately 12,000 members in British Columbia, Canada. Since moving their raffles online, they witnessed remarkable results: 300 to 400% return on actual spend and paid social.
Despite the growing popularity of charitable gaming, there are many fundraising professionals who are (understandably) unfamiliar with the concept and thus, skeptical to try it out at their respective organizations. So, before we dive further into why you should consider online raffles for your next fundraiser, let’s look at what exactly are charitable gaming-based fundraisers.
What is an online charitable gaming-based fundraiser?
Demand and supply: Why online raffles should be your top choice for a fundraiser
The demand perspective: There’s an appetite for charitable raffles and lotteries
Raffles and lotteries as in-person fundraisers have existed for the longest time and are very popular.
According to a Gallup poll, about half of Americans take part in lotteries. This means each year, there are at least 163 million people ready to take part in your lottery or raffle.
Additionally, research from the NonProfit Source shows that 69% of the American population gives to charity, which indicates that most of the population is already donating. Online charitable gaming incentivizes the giving. When people buy tickets, whether they win or not, their money goes towards a charitable cause. So, winning is like a bonus. This has proven to be a powerful motivator for people who already take part in raffles as well as those who donate.
These two statistics collectively suggest:
- There is a huge donor segment that can easily be approached for participation in online charitable raffles; and
- The target audience is willing to participate in raffles and lotteries.
The supply perspective: Stand out from the crowd
As per data from the National Center for Charitable Statistics (NCCS), there are more than 1.57 million tax-exempt 501(c) organizations in the United States. Most donors receive dozens of emails, invites to fundraiser events, phone calls, and in-person pleas asking for donations. So, they must choose which events to attend and which nonprofits they should donate to. In this scenario, standing out among donors can be challenging. This is where raffles and lotteries excel — they aren’t a direct appeal for a donation. Instead, you ask donors to play a game for a chance to win. The more they play, the better their chances of winning, and the more money you raise.
How online raffles or lotteries strengthen your revenue stream
Physical tickets aren’t highly effective when you think of scaling operations and capturing the attention of a larger audience. Online raffles help fill this gap by providing sustainable, easy-to-implement programs that can take your fundraising initiatives to the next level. Here’s how raffles can help you strengthen your revenue stream.
1. Online raffles are efficient, repeatable, and scalable
Online raffles are technology-based, so tasks such as ticketing, marketing and promotions can be managed and executed fully online, making them more efficient than in-person fundraisers. Technology and the virtual nature of the event makes it easier to automate processes, track ticket buyer data and review analytics and reports. The information collected from a virtual fundraiser can be used to make informed decisions for the next campaign and can also help predict outcomes. The characteristics of online raffle-based events make them repeatable — week after week or month after month — ensuring a steady inflow of funds at a push of a button and without reinventing the wheel every single time.
|With our regular fundraising events such as galas and silent auctions, it was the same people doing the same things all the time. It’s a lot of logistical work and involves approaching businesses on the regular. And these people give so much to the community that you always feel some guilt in approaching them repeatedly. The online 50/50 program alleviated a lot of that stress. I had the time to focus on other aspects of my job. It helped streamline our fundraising plan and allowed us to engage a broader potential donor base — which was huge for us.|
|Chuck Schmitt, |
Recruitment and Fundraising Manager, Dryden Regional Hospital Foundation
An article published by the Canadian Medical Association stated that “there is little doubt among researchers that well-run lotteries raise funds effectively. Canadian hospitals have been running them for more than a decade and some, like the Princess Margaret Hospital, have been successful every year, even during recessions. And, as one Princeton University study indicated, lotteries outperform voluntary giving as a means of generating revenue.”
2. The revenue from online charitable lotteries is unrestricted
Unlike government grants or direct donations, the revenue from charitable raffles and lotteries has no strings attached and there are no restrictions on how the money can be used. Organizations may choose to allocate the funds to any area of expenditure such as infrastructure, equipment, advocacy, building brand awareness, etc. and are not required to commit to a specific cause. Lottery/raffle ticket buyers trust that the nonprofit or charity will put the funds to good use. If you have a line item that is stuck due to lack of funding, the revenue from online raffles/lotteries will help you get it off the ground.
|Generally, fundraising is always aligned to the highest priority, but it doesn’t always work like that. Many times, the largest donations or gifts go to something that’s not a priority. So, we still need to raise funds to support the hospital’s priorities. My job is to find new revenue streams. Especially ones that can be automated — meaning, low resource, high revenue. Lottery was a natural choice. We decided to try the online 50/50 and we’re happy with it. We created a new unrestricted revenue stream and allocated those funds to the highest priorities at the hospital.|
|Dan Hadad, |
Executive Director of Innovation Philanthropy, Sinai Health Foundation
3. Raffles and lotteries are high engagement events that can aid in reactivating lapsed donors
Online raffles and lotteries often run over several weeks or months and the growing jackpot is usually a magnet for high engagement and individual participation. The element of fun combined with substantial amounts that can be won by buying a mere $10 or $20 ticket is an excellent way to attract lapsed or inactive donors, while also reaching a much larger audience (who could be future donors). Online charity raffles are an excellent way to develop relationships, build a supportive community of donors, and foster engagement.
A 2018 survey conducted among 115 organizations by NextAfter and Salesforce, titled The Nonprofit Recurring Giving Benchmark Study, highlighted that giving $25 per month (often the price of a raffle ticket) is much easier on a donor’s budget, and is an easier amount to give upfront (when compared with large sums). Spreading a donation out over time (as with monthly raffle draws) allows the donor to give more than what they may have been able to give in a one-time transaction while also earning a chance to win. This allows donors to have a greater impact on causes they care about.
Positioning your nonprofit to stay ahead in the fundraising game
Now that you’re familiar with the potential of online charitable raffles, it’s time to put this knowledge into practice. If you’re looking for a starting point, we have not one, but three:
1. Stay on top of emerging trends
Audience behavior and market conditions are always evolving. Hence, it’s a good idea to soak in all the updates from authentic and reliable industry sources so you’re always on the top of your game. One way you can immediately do this is by subscribing to the Ascend newsletter. Our team carefully curates news, ideas, insights, and best practices in the nonprofit industry and delivers it to your inbox once a month.
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2. Convince your board and key stakeholders to try online raffles and lotteries
We’ve hopefully convinced you that online raffles are worth a shot. But this journey to fundraising success doesn’t end here. We get that you still may have to get buy-in from board members and/or key stakeholders at your organizations — and we want to help you! We’re confident that the information, statistics, and data provided in this article combined with some of our outstanding case studies and client testimonials will help you build a compelling case. Need more help? We got you.
3. Schedule a call with an Ascend representative
At Ascend, we take pride in being true partners, standing shoulder to shoulder with our clients and helping them navigate everyday challenges in the world of nonprofit fundraising. So, we’re here for you every step of the way — schedule a call with one of our representatives and they’ll be happy to answer any questions that you might have. It is our mission to help you succeed.
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Nonprofit fundraising doesn’t have to be synonymous with monotony, stress, unforeseen challenges, resource crunch, and big budgets. Experimenting with creative, out-of-the-box fundraisers such as online 50/50 raffles or Catch the Ace programs can not only add the fun back into fundraising but also provide your organization with a sustainable stream of unrestricted revenue to support its philanthropic activities.