“Raffles are a game of chance in which participants pay for a chance to win, which is a form of gambling. Therein lies the rub.” ~ NPtechforgood.com
- Demotivates Giving:
Ostensibly, raffles and perks are a no-brainer. The donor gets to donate to charity and gets something in return. However, data shows that frequently providing donors with a “perk” or other reward (e.g. raffle) actually reduces the rate of giving. A direct appeal like “donate to help save lives” appeals to the altruistic nature of the donor: I want to give for the sake of doing good. In contrast, a raffle appeal “donate to help save lives and get a (low) chance to win something” appeals both to the altruistic and selfish human nature.
Those two natures contradict one another. And contradiction creates confusion and reduced motivation to actually give. The donor goes through some kind of thought process: “Hmmmm. I’d like to help… But do I really want that free trip?? And really, what are my chances of winning after all? Probably very low? Is it worth it to give up $180 and probably not win? Huh. Probably best to pass.”
- Creates Donor Disappointment
If the major premise of why the donor should give is based upon the idea that they could win some awesome prize, what happens in the inevitable event when most donors do not win? It creates an emotional let down and disappointment. This is not the dynamic you want to cultivate with your donor base.
- Poor Appeal for Mid and Large Donors
There are some limited scenarios in which raffles can be valuable for a nonprofit. However, if you’re looking to run a campaign that appeals to mid- and upper-tier donors, then this is not a good mechanism for you. The reason is that the “chance to win X” usually has fairly low impact on a donor who is in a position to give tens of thousands or hundreds of thousands of dollars.
- Building Your Donor Pool on Shaky Foundations
You want to build your donor base on the premise that they are joining you as a partner in an incredible opportunity to benefit the world. That they will truly make a meaningful difference in a person’s life through their gift. Having to effectively “pay” the donor to have this beautiful merit is simply the wrong way to start a relationship. You can’t make a first impression twice. And you’ll be stuck having to undo some of the framing that you did in your first appeal.
- Reduces Average Gift Sizes
Rather than donors determining how much to give based on a motivation to help and a sense of making an incredible impact, a raffle causes their main focus to be on getting a good deal on a package reward opportunity that they want. The typical online direct appeal yields a gift amount in the hundreds of dollars. In contrast, raffles’ range of average gift amount is in the tens.
There is limited data available about the effectiveness of non-profit raffles, but I found one California survey that reported an average of 300 tickets sold per raffle, yielding an average of 5% of a non-profit’s income. When I contrast those numbers to the typical CauseMatch peer-to-peer fundraising campaign – with thousands of donors, yielding 25% of a non-profit’s income – it’s hard to see much value in running a raffle at all.
So when is a raffle a good idea? The best use case for a raffle is when you want to focus on mobilizing a community of new donors and you need some added artificial appeal to get them in the door. Many of them will be donating for mixed reasons. And the likelihood of donor churn is quite high. However, if you put a strong emphasis on cultivation and if you research the giving capacity of those new donors to guide your engagement, this can be a good mechanism.
However, our strong recommendation is to make the foundations of your fundraising appeals focused on giving for the sake of being a partner and making an impact in a broken world.