For Many Charities, Sweepstakes Fall Out of Favor as a Fund-Raising Idea

The number of charities that raise money through sweepstakes has been slipping in recent years,

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after the contests’ popularity peaked last decade, experts say.

No statistics exist to measure how much money charities earn through sweepstakes each year, or even how many organizations run the contests. But fund raisers say the practice is on the wane as mailboxes have become ever more stuffed with contest offers of all types and as the image of sweepstakes has been damaged by accusations of deceptive practices.

In addition, fund raisers say, the contests have lost favor among some charities because organizations have learned that the offers do not help them find donors willing to support their organization for any reason other than to be involved in a prize-winning contest.

“It’s still lucrative for some, but as things have played out, many charities have learned that average gifts are small, and that it’s a strategy that doesn’t help you find loyal supporters of your cause,” says Max Hart, head of the Direct Marketing Association’s council of non-profit groups.

Mr. Hart’s organization, Disabled American Veterans, in Cincinnati, runs a sweepstakes each year — with prizes totaling $250,000 — for its one million members only. The last time that his group sent a sweepstakes offer to a general mailing list, letters went out to eight million people. And, says Mr. Hart, “It bombed.”

Like Disabled American Veterans, many of the charities that run sweepstakes limit the offers to members. Friends of the National Zoo, in Washington, invites only its 28,000 member families to participate in its annual sweepstakes, which raises about $40,000 and offers prizes ranging from a trip to Florida to a special tour of the zoo’s ape house.

Other charities link the prize drawings to a special event, like a dinner or auction.

The Museum of Fine Arts, Boston runs a sweepstakes, called Give the Arts a Chance, as part of its annual three-day festival, Art in Bloom. For a suggested contribution of $10 an entry, contestants can win a variety of prizes, including a cruise or piece of art.

Other charities run the games more like a for-profit operator might, giving out cash prizes — the National Easter Seal Society, in Chicago, gives a $1-million grand prize every two years — and renting or buying mailing lists of people who are likely to respond to sweepstakes offers.

In those cases, the letters that charities mail to potential donors tend to look similar to the letters that for-profit sweepstakes operators send. The envelopes often include messages like, “You are already a winner” or “Immediate response requested.” Inside, the mailings sometimes include official looking gift-claim notices and stickers that participants need to affix to their entry forms.

The letters usually include at least some basic information about the charity or its work, but the mailings are clearly intended to entice people to enter the contest — and, in addition, to enclose a small donation, typically from $5 to $25. Unlike a lottery or other games of chance that are barred from operating through the mail, a sweepstakes does not require participants to make a payment, purchase, or contribution.

Barry Giaquinto, chief financial officer at the North Shore Animal League, in Port Washington, N.Y., says sweepstakes contests allow his organization to raise money nationally without competing with other animal-related charities.

“We don’t want to target someone in Oregon and take away a donor from the humane society there,” Mr. Giaquinto says.

By sending sweepstakes offers to people on contest mailing lists, he says, North Shore can introduce itself to — and collect donations from — people it might not otherwise reach.

“We’re pulling in people who are not necessarily animal supporters,” he says. “These are people who open our mailings only because they are interested in the sweepstakes. But once they read our message inside about adopting a shelter pet or neutering your pet, that’s a success.”

North Shore, which has been running sweepstakes for more than 20 years, counts on the contests for roughly 80 per cent of its annual donations. Each year, the organization raises a total of about $25-million.

Michael A. Walsh, vice-president of Newport Creative Communications, a fund-raising company in Duxbury, Mass., says that sweepstakes are a good way for new or relatively unknown charities to raise money because the number of people who respond to such mailings is usually fairly high. About 10 per cent of people receiving a sweepstakes offer from a charity for the first time may make a donation, he says, while a traditional, direct-mail appeal attracts gifts from fewer than 2 per cent of first-time recipients.

Still, many charities stay away from sweepstakes in large part because of the difficulty in sustaining donor interest in the charity over time. Once someone has donated to a charity as part of a sweepstakes, fund raisers say, the only way to get subsequent gifts from that person is to solicit them through more sweepstakes.

“The fact is, in sweepstakes you are not going after cause supporters,” says John Kullberg, executive director of the Wildlife Land Trust, in Washington, which raises money through the contests. “You are going after gamblers in a loose sense.”