Josiah Laney essay

  Describe how non-profit organizations, (including church groups, civic groups, youth sports organizations) can best derive benefit for their fundraising effort by holding a raffle fundraiser. Offer proposals for a) maximizing the sales of their raffle tickets b) prizes that would encourage and stimulate ticket sales c) suggested ways to motivate volunteers to sell more tickets.

Even though this wasn’t my first raffle, I was mesmerized. This one was different. I was eleven years old walking around the rows of tents and booths sponsored by different clubs at CSUN when suddenly, a big shiny fish bowl filled with money, gold and a pirate figurine caught my attention. A member at the booth noticed my stare and capitalized on his chance to make a sale. The raffle was a fundraiser for the Relay for Life and American Cancer Society. Drawn in by the prize, I was willing to do anything to go home with that bowl of money and a new pirate collectable. The raffle was simple, one ticket for 2$, or I could take my chances and pay 3$ for 2 minutes to open a trick box which if successful, places two tickets with my name in the raffle. That day, I spent the whole 10$ I had been saving for the last 2 weeks of the month on 5 tickets.

            After my first semester of college and a principles of macroeconomics class, I’m now able to reflect on that experience and explain the success of that club. Before I analyze why their sales increase, I must mention two concepts from my class. The first is the idea of risk aversion and the fact that people don’t like uncertainty. In other words, eleven year old me who wasn’t willing to take my chances with the trick box and possibly lose more than I would gain if I just bought the tickets was risk averse. Secondly, the concept of demand is extremely relevant because it provides an explanation for the people’s behavior. If a non profit organization wanted to increase their sales of tickets, they should consider how much people want to win the prize and also, how much they want to support the cause. In my case, the demand for raffle tickets was high because the prize spoke to me on another level regardless of the organization.

            I would also suggest that to increase sales, organizations should make participating in the raffle less public. Though they can reach a large audience, raffles that require someone to publicly announce that they are participating on facebook or instagram generally achieve a lower amount of sales than their potential. It also makes people less likely to participate in the future due to the embarrassment around losing a raffle that you truly believed you could win. With that point, this brings up the convenience around playing a raffle. If organizations want to increase sales, they should make it easier to buy a ticket and play. By this logic, the reason that other chance activities are so popular is because of their convenience. For example, HQ trivia, which is a mobile app where people answer trivia questions to win money, is extremely accessible to a large audience as well as the lottery which you can walk to the store and purchase a ticket.

            Prizes however, are more complicated than the sales themselves. Prizes are difficult because they are intended to appeal to the interests and pleasures of an individual but the problem is, not everyone is interested in the same things. The challenge is to find something universal that speaks to a diverse range of people.

If I were a non-profit organization appealing to the public, I would offer prizes for the raffle with broad use. For example, a lot of the prizes on game shows are appealing because they can be enjoyed by any individual in any way such as a car, a vacation, a gift card or money.

To raise incentive to buy tickets though, it returns to the idea of risk aversion and the economic graph measuring one’s utility per each win of the raffle. Looking at the risk averse utility graph, this shows that winning one more time when you’ve only won twice benefits you more than winning one more time if you’ve already won five times. This concept actually helps organizations think of ways to increase their utility because it prompts them to consider the demographics of a population. For example, people in worse neighborhoods might be more likely to respond to a raffle that has a fairly decent prize with a low cost of the ticket because it will greatly benefit their utility with low risk while people in other neighborhoods, will need more extreme prizes because prizes benefit them less. Nonprofits should consider the communities and cultural demands of populations to choose specialized prices. 

            Finally, to encourage volunteers, I would raise the incentive to sell. As my junior class president in 2016, I noticed this was effective when I had student body representatives sell pizza and lanyards at back to school night. In order to have more incentive, you have to add some ulterior motive that encourages people aside from the sole purpose of fundraising. This could be in the form of an honorable mention, an award, and maybe even a prize for the winner themself. Ultimately, I truly believe that in order for people to provide a higher quality of labor, they have to feel benefitted by their work and connected to the cause.

            Overall, economics taught me a lot about raffles and how people respond to incentives and demands but it leaves one thing unexplained: why I never won the raffle for the fishbowl 🙁

 (I had trouble sending the essay as an attachment file so I had to send it as a plain text. The utility graph visuals might not appear.)

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