June 9, 2005 | Read Time: 4 minutes
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By M.J. Prest
“Betting the house” is a gamble some charities are taking — and using to raise big dollars. Tickets for raffles where the top prize is a brand-new house are selling out in Indiana and California.
Community Hospitals Foundation of Indianapolis, the fund-raising arm of the Community Health Network, in Indiana, has been holding a house raffle for 13 years. Last year, the group sold all 4,000 tickets, at $135 each, in three weeks, netting the foundation’s annual fund a total of $151,000. For the foundation’s forthcoming raffle, set for this summer, the ticket price will be raised to $150. Raffle organizers are expecting a repeat of the successes of years past and hope to raise $200,000 after expenses.
Nona Dalton, annual-fund director at the foundation, says she started receiving calls requesting tickets in January, even though they will not go on sale until July. In 2004, she says, she had to send back more than 400 donations that came in after the tickets sold out, in order to keep the odds attractive to donors, who in addition to the house are eligible for 49 other prizes.
“That’s a hard thing to do as a fund raiser,” she says, “but people talk about the 1-in-80 odds of winning something a lot.”
In addition to the top prize — for which the winner can choose between the house or $275,000 in cash — the 49 other cash prizes total $56,000. In years past, six winners have chosen to take the house and seven have opted for the money. While the contest is billed as a house raffle, Ms. Dalton says the foundation does better if winners take the cash prize because the house costs the organization $320,000.
For charities hoping to capitalize on the allure of a raffle, she recommends that organizers check with local charity-gaming commissions and departments of revenue to make sure such a contest is legal in the organization’s state.
With help from the Community Hospitals Foundation, the Irvine Public Schools Foundation, in California, which raises money to support educational programs at the county’s public-school system, held its first house raffle last year. The education group sold 10,000 tickets at $200 apiece in fewer than 70 days. The campaign raised $1.5-million after expenses to benefit students in the school district.
This year’s drive offered 15,000 tickets at $200 each, of which 12,000 sold, producing approximately $1.8-million after expenses. The top prize is a choice between a condominium in Irvine — which was valued at $468,990 when tickets went on sale in March, but which had appreciated to more than $500,000 by the end of May — and a $400,000 cash award. The raffle will be held on June 11.
Tim Shaw, chief executive officer of the foundation, says he was not surprised that, unlike in Indianapolis, the winners chose the property over the cash. “In Irvine, you’d be foolish not to take the house,” he says. In addition, the contest will award 50 other cash prizes, ranging from $250 to $25,000, and at least 99 other prizes, such as airline tickets, jewelry, and vacation packages donated by local merchants.
Mr. Shaw urges other charities not to attempt a raffle “unless you have adequate administrative staff support.” He adds: “That’s where the rubber meets the road,” noting that at the peak of ticket sales the foundation was receiving more than 160 requests for tickets per day by fax.
Mr. Shaw says raffle organizers should also seek to cultivate a relationship with property developers. John Laing Homes, with which the Irvine organization worked last year, sold the house to the foundation at $25,000 less than it cost to build it, and paid for the lawyers who helped make sure the contest was run properly.
Most important, of course, is the location of the house being raffled. “It sounds obvious, but you need to have a house someplace people want to live,” he says.
Mr. Shaw added that the one drawback to the house raffle is that it rarely attracts people likely to make repeat donations. “Sixty percent of tickets were sold to people outside of Irvine, but we’re an Irvine-specific organization,” Mr. Shaw says. “People are doing this to gamble; they’re not doing it because they care about your mission.”
For more information about house raffles, go to http://www.ecommunity.com/foundation/index.asp?pg=8032 and http://www.ipsf.net/about/news_raffle.asp.
