Is prize-led fundraising (raffle and lottery) right for your charity?

Prize-led fundraising is where supporters choose to support you in return for the chance to win something. Types of prize-led fundraising include:

• Free prize draws
• Raffles
• Weekly lotteries
• Scratch cards
• Tombola
• Event-based draws
• And anything else where there is chance to win

Your charity may run some of these at specific events or on an adhoc basis. Many charities choose to approach prize-led more programmatically and strategically manage prize-led programmes as an income stream within their fundraising mix.

In our recent ‘Sector Survey’ 52% of the 184 charity fundraising respondents said that they included prize-led as part of their fundraising mix. Why? Because it attracts a different supporter profile, helps acquire new supporters, provides additional income potential and is a more fun product for existing supporters to play in addition to their other support.

For the purposes of this article we will focus on charity raffles and weekly lotteries...

1. What is a charity raffle?

A raffle is a game of chance. Traditionally, players buy physical tickets for entry into a raffle draw taking place on a specific date for a chance to win prizes.

Online raffles are increasing in popularity too, with more and more players opting to buy their tickets virtually. Either way, a raffle is a fun way for people to give to your charity, and the chance that they might win something makes it especially exciting.

Raffle is one-off – a little like cash giving. As a result, we need to make sure every raffle ask is as compelling as the last to get people to play again and again!

2. What is 2022 looking like for charity raffle?

Increases in average gift (as a combination of ticket sales and donations) and response rates across 2020 and 2021 has meant that the average banked per name mailed (that is total ticket sales and donations divided by the number of warm raffle players mailed) has seen a significant increase. 2021 is 15% higher than 2019!

Interestingly, if we look at the average ask against the average gift, the ask reduced during 2020 and 2021 but the gift has risen regardless. We can therefore surmise that the swell of giving is not linked to an increased ask but rather a desire to give and support through additional donations.

Anecdotally, and as a result of recommendations from the Woods Valldata team for their charity partner campaigns, there’s more focus on stewardship in raffle – to retain those hard-sought players. This might be through tactics to increase play-again rates in the next ask, reactivate lapsing players, or simply sending a more thoughtful and considered thank you communication.

After a number of years where charities have not acquired into raffle using cold data, more robust opt-ins in the cold lists have reassured some charities into reintroducing this once fruitful acquisition channel. And we’re seeing great response rates, average gift rates aligned to ask and a 30% play- again rate. If your charity feels comfortable using cold data once again, it’s definitely worth considering to bolster your player volumes and introduce new supporters into your charity.

Alternatives to cold data mailings include Partially Addressed Mail (PAM) and door drops, which have also proven effective for many charities and worth exploring with test cells.

What’s more, the percentage of online play for raffle is increasing year-on-year with a 77% uplift in online response and 18% increase in online gift between 2019 and 2021.

Overall, 2022 looks to continue to be a successful year for charity raffles. So if you’re thinking of setting one up, or growing your existing programme, this is a good time to get going!

3.  What is a weekly lottery?

A weekly lottery is a regular giving programme, largely or wholly based on direct debit sign-ups. As such, growing and maintaining your player pot will deliver you the weekly lottery income and profits to help drive your charity’s good works.

It’s a powerful product that requires a little investment to generate solid donations, and with feeding and loving, can produce some truly outstanding revenue!

4. What is 2022 looking like for Weekly Lottery? 

Even though weekly lottery has seen record numbers recently, it’s been a tough time for acquisition. As with all regular giving, you need consistent investment in acquisition to keep the product growing and successful. And with the sudden removal of Face-2-Face (F2F) in 2020, and its sporadic return to the end of 2021, lottery was left without the reliability of its single biggest acquisition channel.

Many charities turned to alternative acquisition channels: social media and direct response TV (DRTV) or diverted their budgets to stewardship calls to retain loyalty and positive relationships.

Although smaller in volume compared to F2F, lower attrition rates in these channels during this time, and a higher average sign-up rate helped minimise the impact of the changes from Covid-19 on lottery bases.

Coming into 2022 and we’re seeing new factors influencing these alternative channels:

• Increased social media competition from some raffle/lottery companies with large budgets seems to be increasing media costs and therefore cost per acquisition (CPA). Social acquisition for charity lottery and raffle is therefore becoming increasingly challenging.
• During the pandemic DRTV media costs were kept low making it more affordable for those charities able to use DRTV as a channel. However, costs have reverted to normal and now, once again, the higher CPA for DRTV brings into question its effectiveness as a sustainable lottery acquisition tool.

So, what do we do?

The growth of weekly lottery is still rising, and with no sign yet of saturation, this is a great time for setting up a new weekly lottery product. Your programme will need players, so we recommend testing different acquisition channels or opportunities: warm conversion, F2F, telemarketing, and have a go at digital and DRTV to test approaches and sequences – you might hit gold! In addition, are there any opportunities for collaborations within your charity: events or corporate partnerships?

If you have an existing programme, our first recommendation is to retain those new players from 2020 and 2021, acquired through new channels. If you have variable direct debits, you will need to send them an annual notification letter. If this is the case, and you have permissions to do so, why not take the opportunity to let them know what contribution playing the lottery has made to your charity? Find out more about them: channel preferences, contact preferences, reasons for their support.

Now is the time to establish a stewardship programme for lottery. It will be worth it!

5.  Is prize-led fundraising right for your charity?  

If you’re thinking about prize-led fundraising as an additional way for new and existing supporters to give to your charity, or you’re looking to reinvigorate and grow your current programmes, we’d love to speak to you!

Woods Valldata is an established External Lottery Manager (ELM) with a solid track record in working with charity partners to set up and manage highly responsive prize-led programmes. We provide sound, data-driven, strategic recommendations, friendly, approachable and reliable account management and an industry leading operational team.

We have lottery products to suit all charity types and your ambitions from quick, ready to go lotteries to fully bespoke programmes. And our suite of raffle services is unrivalled.

We can’t think of a reason for you not to go down the prize-led route, but as always there’s a few things you might want to consider before taking the plunge:

• Player acquisition: the size of your mailing base, and their supporter history (segmentation) appropriate to the product plus your budget allowance for launch and ongoing acquisition and retention.
• Your internal resource: your capacity to set-up and manage the programme, including ongoing planning and administration.
• Your internal appetite: ultimately, the buy-in of the Trustees as prize-led can often come across resistance due to associations with the negative sides of gambling. NB: there is strong evidence against charity raffles and lotteries and problem gambling. 

Want to find out more about trends in prize-led fundraising?

Watch our 2022 prize-led fundraising benchmarking and trends webinar where we present key raffle and weekly lottery benchmarks and chat through current trends with leading prize-led experts from Guide Dogs, Macmillan Cancer Support and Great Ormond Street Children's Hospital Charity...