Best Practice for Prizes for Fundraisers
March 24, 2014 2:56 PM   Subscribe

I work with an organisation which traditionally gives cash prizes to winners in charitable events they hold like duck races and pub quizzes. I am looking for best practice resources or studies (rather than anecdata) to show them that this is terrible development practice, if indeed it is.

My thinking is two-fold: one, nobody enters a $5 duck race in the hopes of winning $150, so this is wasteful of much needed-funds; two, it turns donors off to see an organisation asking for money one week while literally giving it away the next.

Please provide resources to back me up or set me straight. Thanks!
posted by DarlingBri to Work & Money (12 answers total)
Response by poster: (Just wanted to add: I work with them voluntarily and am not a professional fundraiser, so this is not "do my homework" for me.)
posted by DarlingBri at 3:04 PM on March 24, 2014

I mean, the thinking behind this kind of event is that you spend money to make money. It is the universal problem with fundraising events. They are expensive, and it's hard to actually raise funds through them, because you have to incentivize some people to participate. This is the same issue as "do I take the NPR tote bag or no?"

My guess is that yeah, most folks aren't giving their $5 in hopes of winning the $150. Most would probably rather you kept the $150. But...people are weird and this kind of thing also can draw in folks who otherwise wouldn't participate and always makes the game a bit more engaging. What kind of return are they seeing? And are these games part of larger events where there's a ticket price, etc?

Here's my practical advice: offer a prize, but not cash, and get the prize donated. It will give the game the gravity it needs to still be kind of interesting for people and it won't seem like you're just giving away the cash you bothered to raise. Get a box of wine donated. Event passes. A weekend at a hotel on the beach. Restaurant gift cards. Whatever. This is more in line with industry standard practice.
posted by Lutoslawski at 3:05 PM on March 24, 2014

Response by poster: That is the approach I suggested. I have prizes for 1st, 2nd and 3rd place. This was rejected on the basis that they have always done cash prizes. In an event where they raise maybe $2000, they are giving $250 of that as prizes.
posted by DarlingBri at 3:18 PM on March 24, 2014

Man, I totally feel you on the "this is how we've always done it" frustration in non-profit development.

Unfortunately, I don't have any data to back it up, but I almost always see donated prizes offered for games and such at fundraising events. I have seen cash, but it's very, very rare. How much you want to press the issue is up to you, but I think your alternative approach is a much better strategy, and I think most if not all non-profit development people I know would agree. Can you maybe ask them to just try it a couple times without the cash prize?
posted by Lutoslawski at 3:24 PM on March 24, 2014

Yeah I think it's weird.

However, non-profits are terrified of change. Making a change means taking a chance on doing something different, and if the results are not as good previously, it can be (perceived as) detrimental.

Could you suggest that you recruit really good prizes for the grand prizes? That's how they're usually done at auctions other events. You'd be surprised what people will donate when you ask. Especially businesses that don't have a huge incremental cost (I've gotten hotels to donate a few nights' stay, for example). The organization shouldn't be spending money on the prizes (cash or not).
posted by radioamy at 3:38 PM on March 24, 2014

In an event where they raise maybe $2000, they are giving $250 of that as prizes.

If those are the types of numbers / ratio that you're dealing with, then - while not ideal - this isn't that bad of a practice. You just need to think longer-term than this specific event.

People who give here are establishing a relationship with the organization that will pay off in many ways over the years. It opens them up to learning about your mission and being able to support you or talk about you to others. It gets them on your mailing list, so they come out to events, or join you when you rally around an issue. It opens them up to discussions about becoming a volunteer and giving their time for the cause. It builds relationships that can be leveraged for larger donations in the future. All that, for what is, at the end of the day, a very low cost.

If you can get them to switch over to giving donated prizes, then by all means do so. But this isn't something to sweat, and certainly not something to pick a fight over.
posted by NotMyselfRightNow at 3:49 PM on March 24, 2014 [1 favorite]

$250 cash has more utility to a wide range of participants than a $250 TV, or $250 hotel weekend, or whatever. And if they only actually spend $250 to raise $2000, they're doing pretty great.
posted by garlic at 5:05 PM on March 24, 2014 [2 favorites]

Charities here in Europe openly and legally run their own lottery. Many hospices run large lotteries running into the range of £2,000 a week. They must raise a bundle. I think your job is to diversify beyond raffles and quizzes. I would be happy to give you coursework for a yearlong volunteer sponsorship committee, if you think there are a dozen or so other people who think there are better ways to raise money.
posted by parmanparman at 5:07 PM on March 24, 2014 [1 favorite]

Instead of replacing the prizes in the existing fundraisers, could you start up an additional fundraiser using the prizes you have? That would give your charity its own data about how the cash-prize fundraisers they've always done stack up against a new donated-prize fundraiser.
posted by Bentobox Humperdinck at 5:35 PM on March 24, 2014 [1 favorite]

Response by poster: Thanks for the perspectives, they are really helpful.

We have many events calendared for the year, with many kinds of prizes and incentives; it's just the first one I bumped into involves cash, and I am now going to get over my discomfort with that because indeed, this is not the hill I wish to die on.

If anyone has access to studies or A/B testing results (as I am not going to be able to develop my own before the year runs it's course) I would still be interested, thanks!
posted by DarlingBri at 6:18 PM on March 24, 2014

This is totally anecdata, but charitable organizations in Alaska do something called "split the pot" at sporting events. Volunteers (often kids) walk around selling raffle tickets, winner gets half the take, charity gets the other half. This was entirely baffling to me at first (50% return??) but it just seems to be the MO.
posted by charmcityblues at 8:52 PM on March 24, 2014

This is perfectly normal in Ireland, it's an especially effective way to get buy in from low-income communities*. People want to give, but feel torn about giving to others when it's from the mouths of their own kids. I the giving of a fiver however means the possibility of 150, then it's "irresponsible not to". It's much easier to justify your charitable giving. I've been in plenty of raffles etc where the first prize was a voucher to the electric company. If you do try to move towards something less cashy then I would suggest teaming up with a travel agency and doing holidays.

*For the sake of this discussion pretty much all of Ireland counts as a low income community
posted by Iteki at 11:57 PM on March 24, 2014 [1 favorite]

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