26 Apr 2021
Prize-led fundraising benchmarking and trends 2021
Raffles and lotteries have become a mainstay of the charity fundraising mix. Charities include them for reasons such as to increase donor life-time value and diversify the supporter base.
There are over 600 licensed raffles and lotteries, according to the Gambling Commission, generating over £831m in sales in the year up to March 2020. Of this, £367m went to good causes, a 10.7% increase on the previous year.
What is prize-led fundraising?
The most widely used forms of prize-led fundraising are raffles and lotteries. Others include, but are not limited to; scratch cards, event-based draws, free prize draws and tombola. We’re focusing on raffles and weekly lottery for the purposes of this blog.
The Cambridge Dictionary define raffle and weekly lottery as:
Raffle: an activity in which people buy tickets with different numbers, some of which are later chosen to win prizes, that is organized in order to make money for a good social purpose
Lottery: a game, often organized by the state or a charity in order to make money, in which tickets with numbers are sold to people who then have a chance of winning a prize if their number is chosen
In charity fundraising we would more commonly differentiate them as:
Raffle: A campaign cash-based giving product with a draw on a given date where people buy one or more tickets (most commonly £1 or £2 each) to be in with the chance to win one or more of a set number of prizes.
(Weekly) Lottery: A regular giving product with regular (weekly) draws where people buy one or more chance (most commonly £1 each) to win a set number of prizes.
Maria Novell, Fundraising and Commercial Director at Guide Dogs talks about the benefits of raffle and weekly lottery in providing sustainable income for the charity. They offer the opportunity to introduce a good news story to communications. They’re fun and mean you can give something back to supporters in return for their support. And, especially in times of recession, this ‘give-and-get’ format makes them an attractive proposition for retention and acquisition.
Why prize-led fundraising?
- Raffle and weekly lottery deliver a great return on investment (ROI) – consistently exceeding a 2:1 return
- They help diversify your supporter base, often with a younger, more prize-oriented, demographic
- They provide a different way to support your cause for existing donors, increasing lifetime value
- They effectively work with other fundraising products. Raffle is a great ‘feeder’ product for legacy (Rosie Fearon tells us more about how they’ve achieved this for National Trust). Weekly lottery works well as a drop-ask for regular giving programmes.
How do you make the most of your prize-led fundraising activity?
- Set objectives and build a plan. No programme will be successful if we don’t know what we’re trying to achieve. Be clear on your prize-led fundraising objectives, strategy and approach. Have a plan. Use your budget wisely by focusing on the areas which will best deliver to your objectives.
- Invest for long-term returns. Prize-led fundraising does not exist in a vacuum and it does not run itself. By investing your time and budget into your raffle and/or weekly lottery programmes you will ensure you get long-lasting returns.
- Test to learn and improve. Testing means you will continuously improve your programmes. Simple changes can often reap large rewards. Integrate a test into every campaign and act on significant results.
Raffle benchmarks and trends
The value of raffle continues to rise over the years. 2020 has seen a significant increase in average gift and response rate with ROI for 0-12m raffle segments above 6:1 on average and average gifts exceeding £20.
We’re seeing an increase in online play at just over 13% vs postal response for traditional campaigns, which has increased from around 9.5% last year. Average gifts are slightly lower online at just under £16.
Weekly lottery benchmarks and trends
At the start of the pandemic there was concern that regular giving products, such as weekly lottery, would suffer. People tightening their belts and cancelling direct debits. Instant removal of traditional acquisition channels via face-to-face and retail impacting longer-term value.
In March 2020, there was a spike in DD cancellations as people knee-jerked as a result of COVID-19 (find out more about the impact of COVID-19 on individual giving). But throughout the rest of the year, as a result of the generosity of the public and the ingenuity of the fundraising community, weekly lottery held its own. Attrition fell from 27% in 2019 to 18% in 2020 and 4.25% more players were recruited overall than in the previous year.
Acquisition channels diversified in 2020 including increased use of DRTV and digital. The expectation is that an increased use of these channels will remain in 2021.
What does the future look like for prize-led fundraising?
Over the coming years we predict:
- Re-introduction of free prize draws to boost acquisition of prize-motivated supporters
- Increased cold, partially addressed mail and lapsed supporter mailings as these are responding well right now
- More targeted and bespoke communications across all channels including targeted creative
- Continued acceleration of digital supported by traditional channels such as F2F and Direct Mail
- A focus on stewardship and retention to optimise ROI and LTV