“Lotteries can add heavy extra responsibilities for staff and volunteers; they may not sell well; and they can enhance awareness of your organization’s problems in the community. They can also increase the financial risk of an organization already in trouble.” That’s according to Frances Neufeld, Executive Director of St. Joseph’s Health Care Foundation, who further points out that rather than a `quick fix’, and something all organizations are good candidates for, lotteries require a liberal dose of caution before proceeding.

A previous article, Home Lotteries — A Hot New Trend dealt with the growing popularity of this fundraising method to raise new monies without impinging on existing fundraising programs. Neufeld cautions, however, against pursuing a lottery if your organization has a small membership base or few volunteers, or if your community has several other lotteries taking place at the same time. Of paramount importance is the need to be fiscally sound. If your organization has a cash flow problem or is in a deficit position, you shouldn’t be in the lottery business.

A solid financial footing is a `must’ prerequisite. Certainly no panacea, lotteries are a wild ride requiring a huge amount of work. “They bring with them a high degree of risk,” adds Mike Farrell, Executive Director of the Hamilton Civic Hospitals Foundation. “There are the hard costs of the gifts and settling the prize board, printing, distribution and media costs. Whether you sell 40,000 or 140,000 tickets, those costs are up front and fixed.” If you intend to use a lottery as anything other than an addition to your existing program, look out! Remember, there is no such thing as a sure thing.

Before your organization embarks on this kind of fundraiser, ask yourself if your market place can support a lottery. If you can’t identify or saturate your market, or if it isn’t big enough, rethink its viability. And since ticket sales are driven by print and broadcast media, be certain you can reach a large enough audience with the frequency needed to sell the product. Who are your constituents and where will you distribute? Has adequate research been done? If using direct mail or telemarketing, what is the value of your lists and who has used them previously? Like all good fundraising, you need to evaluate the risks, the pros and cons, and the opportunities and threats that exist in every situation. Cultivate the ability to look at programs through the eyes of your community, and then analyze again and again before going forward.

Says Neufeld, “Lotteries that are successful often have a combination of the following.

• They were the first organization in a city or town to try one
• They had a prize board that was different and interesting to the community
• There was a significant membership and volunteer base that was involved in buying and selling tickets; and
• The organization had an ability to buy market research to determine prize, market, and image to sell, as well as the probability of success.

 

“While they can be an effective revenue source, lotteries are not a lifeline … they are an opportunity. “