Fundraisers have become big and many people want to take part of it. One of the greatest ways that fundraisers can be active is by holding a raffle fundraiser with students. Students that get involved should be awarded for that type of work and make students want to do more. Especially when it comes to non-profit organizations, people are willing to help because they know that their work is going towards a good cause.
Raffles are gaining popularity for nonprofit fundraising. Often combined with a gala or other big event, raffles are accessible and fun. In a tight economy, attendees might hesitate to bid on a big auction item, but almost everyone can afford a raffle ticket. While everyone likes a nonprofit raffle, many nonprofits don’t realize the registration and reporting that raffles require. Many organizations give the winner a 1099 and hope for the best. If you’ve done that in the past, you’re not alone. Unfortunately, that’s not the right way to run a raffle. The IRS has increased its scrutiny of gaming activities and has partnered with many states to compare state gaming registrations to proper IRS reporting. If you run a raffle for your nonprofit, learn about the requirements that may apply to you and make sure you’re running it right.
Running a raffle can be a good source of revenue and a good fundraising tool. It gets many people involved in supporting the organization and generates excitement and fun. To avoid penalties and hassle, use these questions as a starting point to make sure you know the registration, reporting, and withholding requirements related to your raffle.
A qualified organization may offer any prize except money. “Money” is defined as coins, paper currency, or a negotiable instrument that represents and is readily convertible to coins or paper currency. If the raffle organizers offer a prize which they have purchased or have given other consideration for, the value of the prize may not exceed $50,000, or $250,000 if the purchased prize is a residential dwelling. There is no value limit on prizes donated to the organization.
Texas lottery tickets may be purchased and offered as prizes, even though the tickets’ payoff may exceed $50,000. The organization must have each raffle prize in its possession or ownership or must post a bond for the full amount of the value of the prize with the county clerk of the county where the raffle will be held. Proceeds from ticket sales must be used only for the charitable purposes of the qualified organization.
Timing plays a role for other cash and stock donations, too. You can’t claim a deduction for a check with a future date that falls into the next tax year, even if you send it by the end of the year. Post-dated checks with January dates that are delivered December 31 don’t count as a deduction for that tax year, for example. You must use the current date and mail your check by December 31 if you need the deduction.
The day you instruct your broker to transfer a stock gift to your favorite charity is not the gift date; the day the transfer goes through determines the tax year for your donation. However, year-end credit and debit card donations can be claimed for the tax-year in which they were given, regardless of when you pay your bill.The key date is the processing date, advises Parquette.
Raffle tickets offer up unlimited potential in and creativity which can both be multiplied when used in the context of a business. While the initial premise of the raffle tickets can be to raise money, drive exposure or to collect potential customer information, when done correctly, it can also be used to drive loyalty as well as optimize on promotional and messaging strategies among retail and service industries.
Within this new modern age of technology, there are several ways to utilize raffles and enhance upon its traditional capabilities. In the case of a business, a raffle ticket is an asset that ties a potential customer with valuable data that can be aligned with a technological asset, such as a smart phone to allow for data warehousing, message delivery and most importantly, measurable impact. For example, if a raffle is held either in support of a cause or for a promotional giveaway, those raffle IDs are a gold mine of information. Once respondents sign up for the raffle and the unique ticket identifier is recorded, their personal info can either be recorded manually or electronically (app or tablet sign-up). As they input their information, their ticket ID will be assigned to their profile.
These actions are basically creating a loyalty database. Once the raffle is over and the winner has been selected, there ends up being more winners to be had both from the prospective customer end as well as the business end. Opportunity exists If by participating in this raffle entitles those who entered, exclusive access to specials, deals and member only promotions, and the key or “ticket” to those deals, exists from that unique raffle ID. And that ID now either resides stamped or bar-coded onto that ticket or now easily accessible via their smartphone by which it is always an accessible asset that can be used in during transactions with your business.
While the business now has an exclusive membership panel of potential customers, that doesn’t necessarily equate to loyalty or frequency just yet. As a business, it’s now important to begin to track, measure and segment behavior based on the promotional messaging acceptance, timing and or seasonality of penetration. By segmenting out your promotional strategies into such buckets such as, Reward, BOGO, Free Trial etc., it allows the business to now track whenever that ID from their initial raffle ticket is either entered into the promo field during online checkout, or scanned at the register. That information is thus tied back to the respondents’ information and the business can begin to better understand what drives conversion, response rates to particular promo types and regional differences that exist among your shopper base. It also allows for customer segmentation strategies to drive trips, drive higher basket rings and incentivize appropriately.
For example, tying back the raffle IDs to the demographics may tell you that households with children in them in the South are more likely to engage in BOGO ads, especially in the summer vs Millennial households overall are more responsive to 20% price reduction deals especially on the weekends. This targeted approach makes those promotional tactics more cost efficient and more impact to the bottom line. It creates a winning situation in that the customer gets what they desire most as well as the business is meeting that need in a more efficient manner. The information allows for the business to pull he strings that matter and to impact those they wish to affect (Example: Improve loyalty on non-loyals and retain loyalty for loyals). As the process becomes routine, it then becomes a scalable course of action by which the company can replicate the raffle in lookalike markets or tweak the raffle type / incentive, or market to attract a certain desirable demographic. Once this process is replicated, the business is essentially already equipped as to how to target and appeal to their potential customers from the previous targeting and tracking exercises.
Raffle tickets are a gateway for businesses to acquire knowledge and optimize their strategy by using those raffle identifiers and extracting the prospective customer details and monitoring their engagement or conversion behavior. Raffles are a continuous path to new and developing capabilities, which in the end; align both the people and business into a stronger connection and a more meaningful relationship.
A non-profit organization can definitely benefit from a raffle fundraiser. In order to maximize sales the following groups must be considered: family and friends, neighbors, co-workers and the general public. Selling to family and friends, standing right in front of them, makes it difficult for that person to turn you down. Ask them how many raffle tickets they want instead of asking them if they want to purchase. Use phrases such as, will you help us meet/reach our goal?
Selling to the general public will take more work and creativity. Displaying signs and handing out flyers is a way to pre-sell the tickets-get the word out ahead of time. Tell people enthusiastically what the fundraiser is for, a new playground, equipment, etc. As far as prizes and donations go, be determined. Get as many donations as possible. Use social media, emails to friends, letters to local businesses, use any and all connections you have. A local car dealer is a great place to start.
Follow up with a reminder deadline and a thank you, when a business or individual donates. Companies and organizations may be hesitant to donate to your cause if it’s the first time. Be persistent; a successful raffle will set the way for an even more successful raffle the next time. You may have to use some of your organization’s money for one top “draw” prize that will be advertised. But if you put in the time and hard work to secure donations for several prizes to be raffled off, you’ll have that much more profit.
Another kind of raffle is to have a registration type fundraiser such as for a sports organization. Post an $80 registration fee, and then give each child’s family $80 in raffle tickets to either sell, or just fill them out and put them into the pot to win raffle prizes. You will still need donations from businesses. Consequently if you sell all 80 tickets, you signed up for free. It’s a situation where everyone wins. But be sure and do your legal homework, the laws governing raffles are determined state-by-state. Some states, have deemed them illegal as part of gambling, while other states allow a raffle fundraiser for just about anything. In addition, some cities and even counties in the U.S. require a separate application for a charity raffle. Be sure to find out well in advance what is required to hold a raffle, and get any applications submitted in time
Don’t forget to thank your donors for their donations on your website, social media channels and in print publications. Not only will your donors feel appreciated, but other potential donors will see that they will get appropriate publicity if they participate and may also be donating prizes for your next raffle. Don’t forget to do something to thank the volunteers and ticket sellers. Throw an appreciation party and give out awards to the highest sellers and an incentive for selling the winning raffle ticket or tickets. Come next year’s raffle, you’ll have people already in place you can count on to help!