How to tell which fundraising technique is the best?
October 13, 2010 7:28 PM   Subscribe

How can I tell if it's better to sell raise money as an auction or a raffle?

I'm helping to put together a benefit for a friend of mine who was in a car accident, and the group of people in charge can't decide if it's best to raise money by selling things in a silent auction or in a raffle.

We want a way for people who want to give a lot to do so, but we don't want to exclude people that can only donate a little money. If you have ever worked in this kind of situation before, I'd be interested to hear if you found a method to determine which method is likely to raise more money.
posted by arcticbluejay to Human Relations (7 answers total)
What kinds of items do you have? How big of an audience are you trying to reach? What kind of demographic does the group represent? Is it a single event, or are you selling/auctioning items over time?
posted by jacquilynne at 7:49 PM on October 13, 2010

Auctions are a lot of work. Even small ones. But it would be a great way for everyone to be able to give something (a veterinarian donates a free spay/neutering, the guy who knows someone semi-famous sets up a lunch-with-famous-person, and the person who has no money but bakes well puts up a one homemade pie a month package). The biggest concern with the auction, though, is not getting people to donate items, but getting people to COME to the auction to bid.

The absolute easiest thing is a 50/50 raffle (half the money from ticket sales becomes the prize money), but it's nowhere near as exciting.

Good luck!
posted by phunniemee at 7:55 PM on October 13, 2010

My experience is with school fundraisers, and the annual auction has always included a raffle aspect. Say, several lots in a variety of categories and price ranges for silent auction, and then a couple of exciting raffle options, like a Wii, or a weekend at someone's ski cabin, or tickets to an event.

Perhaps you can put your heads together and decide on something to raffle, and then an array of items to auction off (don't overlook services--people with skills to come cook a dinner at your home for a party, or who can give hobby lessons, that is valuable as well).

Another thing that happened at my daughter's preschool auction was a kind of multi-winner auction where the first however-many-people to bid $X would get to attend an event hosted by the donor. There were poker parties, beer and wine tastings, "mom's night out", etc. If your circle has a "thing", see if you can figure out a way to monetize it. It was a fun way to throw another few bucks (anywhere from ten for the poker party on up) at a good cause and then know you'd be getting another chance to socialize with people. One of my favorite examples of that type of auction lot was a couple who fished for abalone every year, who hosted a dinner at their home featuring their catch along with wine pairings. It was a fierce battle to be one of those lucky diners.
posted by padraigin at 8:12 PM on October 13, 2010

A few notes, because despite being totally exhausted, I'm apparently disinclined to actually go to bed:

Silent auctions tend to work better where there's some unique, intangible quality to the items that makes it hard to assess a very specific value for it. A custom dinner in their home from a chef, a chance to meet a celebrity, artwork, stuff like that. Where there's an acknowledged retail value for the prize, people are not likely to bid more than that, and in fact may look for bargains, so in the end, you get less money than the prizes themselves would be worth if you had been able to sell them at retail.

Raffles, on the other hand, have a sort of set number of tickets you're going to be able to sell. You can raise more or less money by charging more or less for the tickets, but most people do not feel 10 times more likely to win a prize if they buy 10 tickets than if they buy 1, so they won't buy 10. If you sell tickets for $5 each or 3 for $12, most people will buy 3 for $12, and you can pretty much count on that being your revenue per headcount (adjusted for couples, many of whom will buy together rather than separately). The same is pretty much true if you have the prizes to support selling them for $50 each or 3 for $120. That's assuming that these raffle tickets are the focus fundraiser of the evening, or the evening is specifically for friends and family of the person being fundraised for. If it's a larger event with general community people who have paid admission, a significant percentage of your guests will opt not to buy tickets at all.

So, if you've got a lot of small, dull prizes that most people won't spend big on in an auction, a raffle will give you a much more predictable amount of money. People will buy raffle tickets anyway, even if they don't particularly want any of the items, while they will only bid on very specific things that they do want.

If you've got only a very small number of high value items, then a raffle is almost certainly the way to go -- otherwise only a very small number of people will even get a chance to give money, and they will have to give quite a lot. If you've got medium value items, especially if they are unique and interesting, a silent auction is likely to do better. If they are small value items, probably a raffle again, because you're mostly going to be guilting people into buying the tickets rather than selling them on the merits.

You can also do a mix of things. For the fundraising dinners ($100-200 a head for the tickets alone) that I attend often have three different ways of giving out stuff:

-- A raffle for 2-3 high value items, worth several thousand dollars each.
-- A silent auction for as many as 50 mid-value items, worth hundreds of dollars each.
-- Door prizes for giving away small value items to random attendees or small gifts to all attendees.

You may be dealing with prizes that are an order of magnitude down from that, but the principles can still hold true. A raffle for one big awesome prize worth $500, and a bunch of silent auctions for $50-$100 stuff, for example.

Depending on your jurisdiction, a silent auction probably does not require a permit, while a raffle probably does. It is probably easy to get, if it's a one-time raffle, usually just a form to fill out and file with the municipality, but it likely has to be done.
posted by jacquilynne at 8:47 PM on October 13, 2010 [2 favorites]

@jacquilynne - Wow, thanks for the detailed answer. The items range in quality from some handmade pottery and small artwork (maybe work $15) to some nice clothing we got from a skateshop (shoes, jackets, that kind of thing). The most expensive things we have are three $150 gift certificates to a custom tattoo parlor. There are lots of other prizes in between.

My thoughts were to have a raffle for the things that are less than $50 and a silent auction for anything more. Some of the things that are expensive also only appeal to a small number of people (like tattoos, or time in a recording studio) but the people that are interested in those things would be willing to pay more for them.

So far we have about 115 people RSVPd to come, and probably more will show up. There are a few local bands that are going to be playing and we are holding it a restaurant. I guess I'd describe the demographic as artsy, or maybe hipsters (though I don't think that term applies to me or my friend, some people might call us hipsters).
posted by arcticbluejay at 9:05 PM on October 13, 2010

I run the school's silent auction/raffle at our annual fundraiser. You and jacquilynne are right that a combination of the two will work best. The trick is asking for a little money from a lot of people for some items; and having those that understand the value and can afford the big ticket items bid for those. At our events, we generally get anywhere from a third to three-quarters of the value of many items, and funnily, gift cards often bring within $5 of the amount.

An example: A parent who teaches in another (wealthier) school had the idea to have each class paint a picture collectively, then auction it off. In a school where the parents are in a higher income bracket and are looking to spend money in fun ways, that works. In our inner-city school with more varied incomes, that doesn't work. (And, people don't want other kids' art on their walls, it seems.) I chose to put the paintings as a raffle, knowing that each parent would buy at least one ticket to be polite, if not more (we offered them at $2 each, 3/$5). With twenty kids per class, that guarantees a certain amount. At the last minute, a few teachers and the other parent begged for a silent auction, thinking it would be more exciting. The paintings went from $25 - $90. BUT - in a silent auction, you only keep the amount of the top bid. In a raffle, you get to keep all of the money. We lost (and also found out later that the organizer of the art spent full retail on new paint and canvasses, and the expense was $150 - so, it wasn't profitable at all!).

Nearly everyone will drop lots of $2 chances (in Canada, Toonies make that easy) - if someone's planning to spend $90 on one thing, they may not spend any money elsewhere. And if their bid doesn't win, and they saved the money in case it did and there's no place for them to contribute it after the auction's closed, you lose it. It's best to keep it flowing in small increments, and that's why raffles work.

Also, a simple donation jar works wonders. I have a few more ideas, but have to run and so will give the suggestions later!
posted by peagood at 6:52 AM on October 14, 2010

It sounds like you're on the right track. Just wanted to add that you should be sure to put minimum bids on your silent auction items.

The danger of having auction items that might only interest a small number of people in your audience and not having minimums is that they'll write down $10, just to put the first bid in, and then end up getting it for that when no one else proves to want it. Don't set them super high -- no more than half of the value of the item -- but do have them.
posted by jacquilynne at 8:19 AM on October 14, 2010

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