Looking for a creative way to market your home? I received a call from a local NBC affiliate producer (12 News) asking for an on-air interview. He was looking for a response to a story about a Buckeye, Arizona homeowner wanting to raffle her home as a fundraiser!
All the homeowner needed was a nonprofit to work with her. So, as the communications chair for my Association of Fundraising Professionals chapter, I agreed.
Now, I’ve heard of home and cash lotteries that some nonprofits market successfully. But, this is different. With a tough home sales market, people are getting creative and desperate. Until today, I wasn’t aware of this newest approach. As I researched “home raffles,” I actually came across a matchmaking service set up for this very purpose. Their premise seems simple:
What if someone offers you the chance to raffle off their home, which is valued at $400,000? In return, all they want is the appraised value of the home. Your Non-Profit keeps the rest of the proceeds… You agree!
Your organization mobilizes to get the word out sells 8,000 tickets at $100 per ticket. That brings in $800,000 of funds. Your Non-Profit purchases the home from the home owner at the appraised value and then you give the home to the raffle winner.
This process leaves your organization with $400,000. Estimating that your expenses for conducting the raffle were roughly $80,000 (closing costs, legal fees, tickets, radio and television adds, website, online credit card fees and so on), that leaves you with $320,000 profit.
As a marketer who specializes in the nonprofit sector, I have some strong concerns, most of which were not included in my on-air soundbyte. For one, any nonprofit agreeing to this would certainly need to do extensive due diligence with proper legal and accounting advice. Depending on how this is formatted, there can be high risk for the nonprofit.
What happens if the minimum number of tickets are not sold? Who’s left holding the bag?
How does the nonprofit get reimbursed for its staff time to set up the relationship, promote the fundraiser, manage the media, and sell tickets, IF tickets don’t sell out?
How does the nonprofit manage its brand reputation if it flops? People won’t remember the homeowner, but they’ll surely remember the organization!
It sounds like a win-win, but as with anything that’s new and untested, is this worth the risk for a nonprofit organization that works hard for its revenue? What do you think?