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What is prize-led fundraising?

A comprehensive guide to prize-led fundraising for charities

Prize-led fundraising is an important income stream for many UK charities. In a recent survey by Woods Valldata of 140 charity fundraisers, 75% of those that responded had a prize-led programme for their charity. So what is prize-led fundraising and why might it work for your charity?

Whether you're a seasoned fundraisers or new in your fundraising career, this blog aims to provide a comprehensive overview of prize-led fundraising in the the UK including it's significance, types and current trends.

Woman expressing amazement at winning the lottery on her laptop, representing  representing lottery service providers Woods Valldata

A definition of prize-led fundraising

Prize-led fundraising is, at it's core, any fundraising activity that offers participants the chance to win something while supporting a charitable cause. Unlike cause-led giving where donations are given generally with nothing in return, prize-led adds an element of excitement by offering the chance to win a big prize. Essentially it's a win-win for supporter and cause.

Woods Valldata define it as: Also referred to as charity gaming, prize-led fundraising is offering individuals the opportunity to support a given charity or not-for-profit and have the chance to win something of value in return. Raffle and weekly lottery is the most common form of prize-led fundraising although free-prize draws, scratch cards and tombolas are also widely used.

Types of prize-led fundraising

Prize-led fundraising encompasses various activities, from local events like tombolas to scratch cards and free prize draws. However, the two most common forms driving the most annual income for charities are raffles and lotteries. These methods have become the cornerstone of prize-led fundraising within the realm of individual giving for charities in the UK.

Types of prize-led fundraising

Where prize-led fundraising fits in to the fundraising mix

Although not a linear model in reality, the giving pyramid gives us a good basis to show where prize-led fits into the main fundraising mix. Although both prize-led in their motivations, raffle and lottery are as different as one-off giving appeals and committed giving programmes with similar approaches and challenges for the fundraiser.

Pyramid of individual giving

Raffle

You'll see from the pyramid that raffles sit at the base of the pyramid alongside cash appeals. To this end, a raffle programme will traditionally require a fairly large base of supporters to your charity to get going. Predominately a direct-mail-based product you'll be looking to mail to a warm audience of mail responsive supporters (around 30,000 or more if you can), plus any digitally responsive via email and to promote to a cold audience through cold direct mail lists and digital media. A raffle is a one-off giving product in so much as the player enters a single raffle and has the opportunity to win from that raffle - normally quite a large guaranteed prize. A charity might run one raffle a year, although we recommend two or more to optimise the programme - because raffle players can be very loyal and want to play multiple times a year.

Weekly Lottery

Weekly lottery sits above one-off gifts and multiple gifts in the pyramid alongside regular giving products. Weekly lottery works best as a direct debit based giving product where the player gives multiples of £1 per chance per week to enter a weekly draw. They therefore have many more chances to win over a year than a raffle, although the prizes could be harder to win (such as with an insured prize to match 5 or 6 numbers) or lower in value.

The benefits of prize-led fundraising

Having looked at the basics of what prize-led fundraising is, now is the ideal time to consider why you should consider including prize-led into your individual giving fundraising programme. Here's 4 of the top reasons why:

1. Diversify your supporter base

Prize-led attracts a different demographic of supporter to complement your cause-led audience. With a slightly different motivation set, they might be more prize-motivated or prize-motivated with a leaning towards your cause. Either way, you'll strengthen your base and increase opportunities to grow relationships with this new set of supporters.

2. Increase fundraising income

Prize-led offers you can additional way to generate income for your charity. We little to no canibalisation to existing programmes when a raffle or a weekly lottery is launched, thereby offering existing supporters additional and different ways to support your charity in alongside their existing contributions.

3. Engaging and fun

The element of a chance to win makes prize-led fundraising more exciting for supporters. Plus this different type of fundraising product allows you to go out with a different message type. Raffle and Lottery is all about hope and joy - enabling you to spread the positive side of your charity mission.

4. Lower barrier to entry

By lower barrier to entry, we mean that the cost to play is low. At just £1 a ticket or chance prize-led can be a much easier sell than traditional committed gifts or one-off giving. This is especially important to consider during challenging economic times

Current trends and insights

Our research, including the recent Lowdown Survey in 2023, sheds light on the growing popularity of prize-led fundraising among charities:

  • Increasing adoption: In our latest survey, a staggering 75% of charities reported incorporating prize-led fundraising into their fundraising mix, indicating a significant upward trend.

  • Rise of weekly lotteries and raffles: The data reveals a steady rise in the prominence of weekly lotteries and raffles as key fundraising products for charities, reflecting their effectiveness in meeting fundraising objectives.

What are the most important fundraising products to meet your objectives_2023

You can find out more about what's happening in raffles and lotteries in the 2024 Woods Valldata Prize-led fundraising benchmarking and trends webinar. It's available on demand now and includes some excellent examples, stories, hints and tips from our charity panel from RNLI, PETA and St Barnabas House Hospices.

A positive future outlook

Furthermore, data from the Gambling Commission shows that lotteries continue to rise and succeed. We've seen continuous growth over the last ten years, with total lottery sales on an upward trajectory, indicating sustained interest and participation. What's more, the gap between contributions to good causes and expenses is widening which suggests that more funds are being channeled to good causes benefitting supporters and causes alike.

GC chart showing lottery statistics

Now is the time to get started!

In summary, prize-led fundraising offers a wealth of opportunities for charities seeking to diversify their fundraising strategies and engage supporters in innovative ways. With its proven track record of success and promising future outlook, now is the perfect time to explore the possibilities of prize-led fundraising for your charity.

Find your perfect fit lottery product with this quick quiz and let's get the ball rolling!

PLF decision tree

Ready to embark on your prize-led fundraising journey? Contact us today to kickstart your raffle or weekly lottery campaign and unlock the full potential of your fundraising efforts!

Let's make a difference together through the exciting world of prize-led fundraising!

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