The Winning Ticket – “Impact a Life” Scholarship Essay

A “tip ‘o the hat” to University of Notre Dame accounting major, Mike Schneider for his insightful and business oriented look at using a raffle to bring in needed funds for a non-profit organization. Mike not only examines the topic from a business perspective, but also as someone who has organized and promoted raffles for causes he is involved with. Thanks Mike, and good luck!

A Comprehensive Proposal for Non-Profit Raffle Fundraising

the-winning-ticket

Although non-profit organizations function without shareholder-based ownership, corporate income distributions, or multi-level IRS taxes, they remain obligated to conduct external fundraising. Church groups, civic groups, and youth sports organizations must seek efficient ways (as in all business transactions) to maximize their respective revenue accounts without creating extensive liabilities. For example, the Knights of Columbus must finance its nationwide Catholic education network, the American Red Cross must purchase various pieces of medical equipment to provide disaster relief, and the National Alliance for Youth Sports must buy the football pads it issues to aspiring athletes. Unfortunately, these organizations typically rely on fundraising vehicles like direct donations and membership fees, oftentimes overlooking the favorable prospects of conducting raffles.

When considering any fundraiser, non-profit organizations must understand the tangible benefits of a raffle relative to, for instance, a run-of-the-mill restaurant co-op. For one, raffles produce a unique, lottery-like sensation within participants, giving them the chance to win big ticket items for a fraction of the cost. Not only that, but these prizes can be solicited free-of-charge from corporate sponsors in exchange for event advertising. Raffles also reduce the psychological burden of directly asking for money, make economic sense in terms of general and quasi-linear utility functions, and can incentivize donors to attend fundraising events. Nevertheless, prior to making the raffle fundraising decision, non-profit organizations must investigate whether state regulatory agencies prohibit them from conducting raffles without licensure. Any form of fundraising, of course, would be counter-intuitive should it result in a host of penalties or state-imposed fines.

After accepting the benefits of raffles and verifying any legal restrictions, non-profit organizations must brainstorm ways to maximize ticket sales. Through personal experience and extensive analysis, Iíve noticed that ticket sales stem principally from consumer awareness and an effective marketing strategy. When it comes to consumer awareness, creating posters, webpages, flyers, and maps (indicating selling locations) is critical. However, in the era of widespread multi-media communication, non-profits can easily use word-processing software, e-mails, social networks, and even traditional word-of-mouth to disseminate their message. The emphasis, then, should be on timing. To optimize returns, non-profit organizations must advertise and sell tickets well before their keynote event. Not only will this generate revenue immediately, but it will remind anyone attending the event to bring their wallets.

Next, when it comes to an effective marketing strategy, the ticket price, sales medium, and promotional approach must be scrutinized. Based on previous raffles or any relevant benchmark, ticket prices should take into consideration the size and buying power of the target audience, the value of the grand prize, and the overall fundraising goal. Finding an optimal ticket price may require trial-and-error, yet general price ranges should be easy to quantify in possession of the information above. Just like the ticket price, though, the sales medium also bears contingencies. Should tickets be sold door-to-door? Should mail-in tickets be sent out? Should participants travel to selling locations? Answers to these questions depend on the scope of the raffle, whether the recipient must be present to win, and the size of the sales force. Finally, promotional support should go beyond typical quantity discounts. Non-profit organizations should seek creative ways to push sales further by offering side-prizes to those who purchase the most tickets, by teaming up with local celebrities to endorse their cause, or by wearing memorabilia (shirts, wristbands, hats, etc.) that advertise their event.

Though fronting the awareness effort and marketing campaign may culminate in widespread exposure, individuals will not be incentivized to purchase tickets without a highly desirable prize. No one, for example, would waste their time travelling to a game show should they only offer first-generation Macintosh computers or run-down automobiles. To stimulate ticket sales, prizes must be oriented towards customer demographics and their perception of risk-and-reward. Should the target audience be the general population, generic prizes (such as money, gift cards, or electronics) would work best. These items possess fairly universal demand, so they are likely to draw in bigger sales from all walks of life. However, should the target audience represent a niche market (such as youth golf families or members of a particular parish community), highly-specialized prizes may generate greater revenue. Youth golfers, for instance, would probably prefer a new high-end golf set over a Starbucks gift card. Aside from demographics, though, the target audienceís perception of risk-and-reward must not be overlooked. High-rollers will likely desire a grand prize worth $5,000 and a $20 ticket price over a grand prize worth $500 and a $2 ticket price. The latter, of course, would be a raffle more risk-averse customers would appreciate. This trade-off between prize value and ticket price must be carefully analyzed to maximize contributions.

Yes, our focus has been placed primarily on the customer up to this point, but non-profits should never neglect their sales force. In order to motivate volunteers to sell more tickets, non-profit organizations can offer incremental incentives for anyone who achieves a particular sales quota (20 tickets, 50 tickets, 100 tickets, etc.), divert a fixed percentage of proceeds to the leading salesperson, or boost confidence through sales pitch training. If conducted properly, raffles have the potential to not only generate notable proceeds, but to infuse excitement for these volunteers into the otherwise daunting task of soliciting funds.

Throughout my collegiate career at the University of Notre Dame, I have utilized raffles in both fun and creative ways. As the captain of our universityís bowling team, I have held merchandise raffles at our annual Blue and Gold Classic (the nationís largest intercollegiate bowling tournament). As the treasurer of my residence hall, I have conducted campus-wide 50/50 raffles to support our spring semester Wake Week Extravaganza. Aside from the money these raffles generate (oftentimes exceeding $5,000), participants gain a deeper understanding of our mission and purpose. They appreciate the affordability that raffle fundraising provides and enjoy the culmination of anticipation as the winning ticket is drawn.

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