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?
Tags: fundraiser, home raffle, home sales, nonprofit
From what I have read, the home raffles mostly don’t meet their minimums, and have to be cancelled. I don’t think there is risk to the npo, though, except in terms of looking dumb.
Thanks, Alanna. You’re right. The nonprofit would look dumb, but that IS a risk to its brand reputation.
I saw this mentioned on Oprah a while back…there’s some more discussion of the topic on her site: http://www.oprah.com/community/thread/40468
Hi Elaine, interesting approach. Is it legal to run this type of raffle in the US? My understanding was that you couldn’t.
We actually have a marketplace here in the UK were anyone can create a raffle instead of say an auction.
Our ambition is to make everything affordable to everyone, especially poignant given the economic environment.
Let me see if I can answer some of your questions. On the question of the minimum number of tickets, this is sometimes set by the state law, it depends on your state. However it goes, it should be ironed out in an agreement between the homeowner and the non profit. Let me use Maryland for example, the state law requires hat there is a minimum of 5000 tickets sold before the raffle can happen. If that number is not met, the tickets must be returned to the purchasers. Before the raffle starts, there should be a legal agreement between the homeowner and the non-profit that solidifies this situation and others.
What if it flops, Well that is a possibility that always has to be faced, but not a possibility that has to happen. The non-profit should take on only a task that they can handle. That’s why finding the right home to raffle off is key. Example if you are a new non-profit and you have a small budget to work with, don’t go for the 1.5 million dollar home to raffle. Find a home that maybe cost 150,000. With this, you can sell only a few thousand tickets and still get a good size profit. It doesn’t always have to be the ‘HGTV Newly built Dream Home.” simply put take on a task you can handle.
Bare in mind there are millions of families in America that would jump at the possibility of owning a home if they new they had a 1 in 5000 chance of winning it; especially if they realized it was only going to cost them $100 to $150. Similar to the way many of you didn’t know about it, they don’t know this possibility exist. If you focus on raffles with the common 3 bedroom 2 bath house, and the common renters in apartment complexes across America, I am sure you will find that selling 5000 to 10,000 raffles isn’t that much of difficult task. When I mentioned the idea to a few people who were renting, one of the first questions out of their mouth was, how many tickets can we buy.
Is raffling a home a new thing? No not at all. It has been happening for years. Check with St, Jude, they have been doing them for more than 10 years successfully.
Is it a really a win win, Yes when done correctly it really is. Just think about it in its simplest. We all know someone out there that is renting an apartment or a home and would just love to be in a home that they can call his or her own. We all know Non profits that are looking for new way to raise money so that they can continue to do what ever philanthropic work their mission calls them to do. And finally, we all know that there are millions of people out there that want or need to sell a home but can’t in today market place. In its simplest form everyone I just mentioned gets what they want. A really nice byproduct of this situation is, it causes a lot of money to change hands in a productive way, and that is exactly what needs to happen to grow an economy. Everybody Wins!!
Wow, I didn’t mean to write this much but when you start to talk about what you believe in, you never want to stop. I hope I have helped you understand a little bit more. At the minimum, I think you will take a closer look at doing this with some of your non profits
If you have any additional questions, please check our FAQ document. http://www.usahomeraffle.com/faq.asp. If you don’t find your answer there, email it to us using our online contact form so we can easily add it to our FAQ document. I will add these questions and answers to it some where over the next few days.
Ser Greene
USAHomRaffle.com Co-Founder
Peter, thanks for the link.
Pascal, I believe that Ser answered your question. When I did some cursory research before the interview, I discovered that some states require some type of registration or licencing with their state gaming dept., while others did not. I spoke on air about doing the due diligence, as there is quite a bit of risk involved.
Here’s the link to my ten-second soundbyte:
http://www.solutionsmc.net/index_files/Elaine_Fogel_TV_interview_for_AFP.htm
Ser, thanks for your explanation. I commend your enthusiasm to help nonprofits raise money. If tickets don’t sell out, however, and money must be refunded, it can be a deterrent for ticket sales, not to mention poor PR for the nonprofit. Why buy a ticket if the raffle may not go through? And what about the hard costs that nonprofits must undergo doing their homework? It’s not a good thing to use existing donor dollars without a sound ROI on the investment.
Another concern I have is that raffle ticket purchasers be made aware of the IRS tax implications in a very transparent way, not just in mice type at the bottom of a Web page.
Hey there Elaine, I’m back to answer your questions.
Yes you are correct, if tickets don’t sell, yes it can be bad PR for the non-profit. But I would think the Non profits would hire a professional fundraiser for that very purpose: to help them better conduct and handle more lucrative fundraising opportunities.
There are a few companies that I know about that do just this. They help non-profits / charities put on Home Raffles and they are pretty good at it. There is one company that has 3 raffles listed on our site now. They are not having any problem selling tickets. In fact some of non-profits I have contacted on the west coast, told me that they didn’t need to do any more advertising. They are positive their raffle tickets would sell out way before the raffle date. (I was impressed!!)
Think of it this way, what was the first fundraiser that you (anyone reading this) ever did. When you did it, you never knew if it was going to be a success. But you researched it, talked it over with people who have done it before you, and pressed on. You put everything you had into it. And chances are, you made it a success. Failure was not an option in your mind. That is the same way people need to pursue home raffles. The amount of money that stands to be made for the non-profit, warrants a serious, committed and coordinated effort.
I won’t tell you it is easy, but I will tell you it is quite do-able. That is all part of the reason why we came up with usaHomeRaffle. To make it easier for people to start a home raffles, to promote the concept nationwide, and then help non-profits advertise easily with a really nice website. A website that doesn’t cost a non profit an arm an a leg to set up. Kind of the way ebay allows people to sell household items, kind of the way google makes it easy to find specific things on the web, and the same way that matchmaking services like eHarmony and match.com put people of like minds together; that’s what we want to do for home raffles.
As far as the tax implications. Yes there are some but you are going to have to pay taxes no matter what you do in life, however you get a home. I just can’t see someone thinking through this and not buying a ticket because of the tax implications.
Lets walk through the mind of a family that is looking to buy a home.
Option A: I could buy a home for 300,000 and pay taxes on the purchase. So that means I need to save at least 10% to put down ($30,000) and then get a mortgage for the remaining amount (at least $270,000)
Option B: I can spend $100 to $200 now on one of these raffles, and if I win the house worth $300,000, I end up having to get a mortgage to cover the taxes (if taxes comes to 35% that is would be $105,000)
So that is a mortgage of $270,000 vs $105,000 for the same house.
Now these are just rough numbers with no specifics like closing cost and so on. But they are just meant to allow you to see that the more you think about it, buying at least 1 ticket is the smart thing to do someone really wants to own a home.
One of the sayings I live by is:
If you want something you have never had before,
You have to do something you have never done before.
For many people who would love to be in a home, that means buying a raffle ticket. For others who need to sell but just can’t that may mean partnering with an organized non profit to give the house away (still getting what the house is worth)
Ok Elaine Im going to stop now. This your blog LOL LOL
I hope you and others in your organization take a serious look at home raffles. I think they are here to stay.
Have A Great Day
Thanks for posting again, Ser. I believe that this fundraising idea has merit if all risks are vetted and nonprofits get proper legal and accounting advice.
In order to evaluate whether this route is a viable option, it would help to have a “how to” publication that outlines all the issues and barriers, how to overcome them, and what some best practices are. Case studies would help. Fundraisers and nonprofit marketers really need the entire picture, not just marketing copy that shows this is the next best thing.
If you have any recommendations, let us know. Thanks!
I’ve been researching this Raffle idea and am more interested in raffling my Resort. I’ve been trying to sell for three years, and our economy in MI is in the dumps and has been for years. I’ve read that raffles can be done without non-profit envolvement if the “game of chance” is taken out and the raffle becomes a contest of skill. With our financial markets, credit lenders and housing markets so volitle I think this is some homeowner/small business owners only hope of not losing everything they’ve worked for all their lives. I for one am willing to spend the time and effort to save my retirement and my credit rating.
Elaine, could you please email me at your earliest convenience. moreinfo@usahomeraffle.com. I can’t find your email address on your site.
Thank You
Im in Florida and would like to raffle my home. My home is appraised at 130,000 by a Market Appraiser. But the tax appraiser appraised it at 65,000. Which appraisal would I go by in raffleing my home? Thats one of the questions that usahomeraffle.com does not answer.
Use the Market Appraiser, not the tax Appraiser for the true Appraisal.
This is a great discussion. I recently learned of such a home raffle that had to be cancelled. A house raffle can be successful but only when it’s part of an overall solid fundraising strategy. Not an outlet to sell a house in a stagnant market.
http://stepbystepfundraising.com/house-raffles/
We have launched a website that addresses all the above mentioned concerns. The following blog written about us appeared on Zillow.com The on Unscramble Some Words, Win a House
By: Diane Tuman, Content Manager | November 11, 2008
You’ve heard of contests that require you to write an essay and win a house. Or homes that are sold in a raffle. They usually go up in flames, but down in Florida, a real estate investor seems to have come up with a unique new approach. Donna Kalman, a provider of short- and long-term housing in South Florida, has created an online word jumble skill challenge game that she says is fair and benefits everyone: the seller, the buyer, the agent, and the lawyers. It’s called Perfect Place Contest.
Simply, you choose the house you want to try to win, pay a fee of $10 to $25 and then play the word jumble game on Perfect Place. The fastest person to unscramble the words over a set number of weeks or months wins the house. And, of course, you can enter as often as you like.
On the other side of the equation, Kalman would like to sell enough “chances” to cover the cost for everyone involved. For example, for a $250,000 house she has on the site, she needs to sell 10,000 chances at $25 apiece. But, if the game closes before the maximum amount of entries is reached, persons with the highest scores will receive gift cards. Kalman says she knows the legal ramifications of ideas like this and says her rules have been written and reviewed by lawyers with a fine-toothed comb.
It will be interesting to hear about the first house that is “won” fairly and squarely through a word jumble game.
We have launched a website that addresses all the above mentioned concerns. The following blog written about us appeared on Zillow.com The on Unscramble Some Words, Win a House
By: Diane Tuman, Content Manager | November 11, 2008
You’ve heard of contests that require you to write an essay and win a house. Or homes that are sold in a raffle. They usually go up in flames, but down in Florida, a real estate investor seems to have come up with a unique new approach. Donna Kalman, a provider of short- and long-term housing in South Florida, has created an online word jumble skill challenge game that she says is fair and benefits everyone: the seller, the buyer, the agent, and the lawyers. It’s called Perfect Place Contest.
Simply, you choose the house you want to try to win, pay a fee of $10 to $25 and then play the word jumble game on Perfect Place. The fastest person to unscramble the words over a set number of weeks or months wins the house. And, of course, you can enter as often as you like.
On the other side of the equation, Kalman would like to sell enough “chances” to cover the cost for everyone involved. For example, for a $250,000 house she has on the site, she needs to sell 10,000 chances at $25 apiece. But, if the game closes before the maximum amount of entries is reached, persons with the highest scores will receive gift cards. Kalman says she knows the legal ramifications of ideas like this and says her rules have been written and reviewed by lawyers with a fine-toothed comb.
It will be interesting to hear about the first house that is “won” fairly and squarely through a word jumble game.
A couple from Southern California (the wife was born in NYC) who now live in Hawaii have also joined the trend to sell their one-of-a-kind 1,300 square-foot, never-before-lived-in home in this depressed real estate market in an essay contest.
Essay 101 (www.WinHawaiianHome.com) is a contest of skill, where anyone (21 years old or older) can write a short essay (101 words or less) and, for a $101 entry fee, get a chance to win a brand new, custom home on the Big Island of Hawaii. 101 Finalists will be chosen and then judged by a panel of community leaders. The contest is open worldwide, however essays must be submitted in English and must be original work. Contest entries will be made online, although postal mail entries will also be accepted.
This home (affectionately called the “Sweetheart Cottage” due to its many design details) was built by John Williams, a local builder, with the goal of selling it immediately and using the proceeds to finish construction of his castle (www.CastleInHawaii.com), a future vacation rental or bed and breakfast in Pahoa, Hawaii. Local schools in Puna to benefit by donation from the sponsor. Please visit http://www.WinHawaiianHome.com for ALL the details.
I think it is a great idea and really could help a lot of people out during these hard times. Check out these other real estate raffle listings here at http://reraffle.com
Hello Tampa Bay, most of you heard about the home raffles in Michigan and California. There is a few in Florida. I have started a non profit company to take the head ache out of raffles for the charities. The amount of work to raffle a home is huge, so most charities do not want to take them on. This is why Hope is Alive Charity is set up to raffle homes to help the home owner and donate to charities in need.
You can go to http://www.hopeisalivecharity.com to see our first condo on St.Pete Beach.
We need all the help we can get selling tickets to get this wonderful solution to stopping foreclosure.
So Tampa Bay lets help those in need and make this work.
If you have any functions or fundraisers that we can attend please let us know; we will be there.
Thank You
Linda Blackburn
813.763.2983
http://www.hopeisalivecharity@yahoo.com
I feel you all are so right about helping all of “us” that need to sell our homes and not loose everything we have worked for for years. Why can’t some one ( Maybe Opra) as people listen to her !!!Get this Idea to the New President to make it easier and pass some laws to help. We could all help each other get out of this housing mess!!
We have a beautiful commercial building in a historic district in Florida – 11 miles from Kennedy Space Center, 5 miles from the beaches, 40 miles from Disney. The building is income-producing. There are 4 areas – 3 are rented with well-known ‘anchor’ companies. The 4th area could be leased out – or someone could set up their own business. We’d like to raffle this with the help of our realtor and a good charity. Has anyone raffled a commercial property?
The building is in excellent shape, on the major highway to Cocoa Beach.
I been battling the state of idaho for two years as i run a perfect plan of raffling off a 350k home in north idaho and giving 90% of the proceeds to a local childrens village to expand BUT when you have aconservative right wing dishonest gstate gov similiar to the dishonest Mr gw bush fishing for every little reason to say no and even being out right dishonest and lying about things we havent been able to get past the licensing part of it .Itys pathetic we all feel like criminals and we havent even did anythign wrong .And i do and have started up a small non profit and am 100% legal by law but becuase were a msall non profit we have been treated like criminals and accused of things and just one thing after another the lady l cravens is just aso dishonest it isnt funny and they doubt us ????hahahah its just pathetic so you people who have to deal with a sound honest gov like maryland or calif. and or florida be thanksfull here in idaho they bend the rules and wont give you alicense this womands came up with some of the most pathetic things that have nothing to do with raffles laws of idaho just to say denied .we are at apoint of hiring an attorney and bringing suit agisnt the ifdaho lottery commission as their so friggn crooked and dishonet it makes the mob look like alter boys and all we wanted was for a complete win win for everyone and its been at our exspense and time
These essay houses are run by a guy named mark samwick and I have busted him.
The more publicity you guys give him… the richer he gets.
I’ve even posted many of his fake ID’s and some of his other scams he has going on!
He’s running a scam in Hawaii with an essay house as we speak.
http://damontucker.wordpress.com/2009/01/17/tucks-smuck-award-2-mark-samwick-essay-house-promoter/
Sincerely,
Damon Tucker
Pahoa, Hawaii
http://www.rafflemansion.com is the best place I’ve ever seen to raffle a home. This is a great idea, and a great charity fundraiser!
Hello, I live in the UK and I think this is a great idea!
Recently there have been a number of homeowners over here trying to organise house raffles without partnering up with a charity. Most of them have run into difficulties:
http://win-house.co.uk/blog/competition-updates/15-further-property-competitions-cancelled-following-the-devon-house-competition-setback.html
This would provide a perfect solution in the UK in my opinion.
Thanks for the information!
Angie
As home raffles continue to increase in popularity as the housing markets decline, it is good to see that there is now a book about raffling homes. The book is titled, “The Home Raffle Book” and is located at http://www.thehomerafflebook.com. It’s a must read for anyone conducting or participating in a home raffle and it includes a sample business plan.
I have been looking around and stumbled across http://www.officialhouseraffle.com
I chose to buy a raffle ticket from them because of their worthy cause. Helping an Iraq war Veteran is great thing. We all need to support our troops when we can, even if it’s as small as buying a raffle ticket.
We are teaming up with a local food pantry to raffle a 3/4 acre lot in Yorkville, IL. Ticket sales will be $100 and we are looking sell 1500 tickets. There do not appear to be many land raffles out there but we think the odds are great and no one is stuck with a home for which they can’t afford the utilities or property taxes, or a home that does not fit their lifestyle. They can, however build the home of their dreams if they choose!
Hi, I think that is a great idea.. And it is worth a risk.. Thanks for this post..
-david
Marketing commercial property is sometimes a challenge, especially in today’s market; which is why I am bringing my opportunity to this blog. I have two commercial property listings (carwashes) where my client is interested in perhaps partcipating in a charity raffle. Both properties are doing well financially, however, the owner looking to move on to a different part of the industry. Both properties include additional vacant land for future development, and one even has very nice manager quarters included as well. I am looking for solutions to marketing my listings, and benefits for a worthwhile organization to make some serous money. Any input would be greatly appreciated. Thanks!
I need some information on companies that do property raffles.
Thank you
We just got a call asking us if we would help a guy in Texas raffle off his house. I have a hard time reasoning it through that 8000 people would pay $100 for the chance to get a house in a town where the man cannot sell his house for any price. I referred him to a Texas-based nonprofit. Seems like a lot of energy and a lot of risk that nothing will come of it.
Hello everyone. Do not weep; do not wax indignant. Understand. Help me! I find sites on the topic: Betting odds for super bowl. I found only this – the master betting odds. It’s just not the way that vince mcmahon does business; the only previous royal rumble winner that was a relative newcomer; was winner ric flair, though he was already a legend in the business. Gina carano on being female mma representative. Thanks for the help
, Jin from Morocco.
Hi, My name is Mandi Jo. I live in Johnson City TN. I am writing this to get information out there about a raffle we are having on behalf of the Boys and Girls Clubs of Johnson City/Washington County TN. I am wanting the public to know why we are doing this raffle. A local group of people got together and decided there had to be a better way to get our community out of the economical crisis. We looked around and seen that what was impacting our community the most was the slump i the housing market and the soaring prices in gas. We decided that we would try and find a local owner who had their home on the market and see if they would let us try and raffle it off and give ALL the proceeds to a local non profit organization that impact our community in a positive way. We Found an owner who was willing to take his home off the market for 12 months and continue to make payments on it and pay and taxes that were due during this period. Then we decided to let the owner choice which organization and they accepted our offer. The reason for the story is so that other communities can start building up within their communities and we do not have to wait on stimulus packages to come in the mail. Mor do we have to wait on cash for clunkers to run out of money. We have ideas, ways and means of getting ourselves back on top. One community, one region, one state, ONE UNITED STATES. If you are interested in how we did this or how you can do this email us at houseforraffle@gmail.com or please visit our site at http://www.tndreamhome.org.
PLEASE REMEMBER WE DO THIS FOR NEIGHBOR NOT FOR GOVERNMENT. THIS IS FOR OUR BROTHER, OUR SISTER, THIS IS NOT FOR THE BENEFIT OF SOMEONE THAT GOT THEMSELVES INTO A FINANCIAL MESS. THIS IS ABOUT THE HOPE OF PROSPERITY IN THIS GREAT LAND WE STILL CALL AMERICA.
Doing an Online Raffle to sell your house sounds like a great idea! Not sure if that is something I would do, but if it starts to become a trend that really benefits the seller, then why not?
Hi,
No disrespect intended, but a person investigating the possibility of raffling their home, look to these blogs for information. The problem is that on a blog, some individuals present themselves as having either done a home raffle, or an authority on the subject matter. The post above contain misinformation from an individual representing themselves as an authority, and this in turn educates the truly curious person that wants to learn about House Raffles; going away from your site with more bad information, adding to the wrong information that is already rampant on the internet; regarding House Raffles.
I know this because I’m currently raffling my home. I’ve been through all phases of the application, legal contracts, State authorities approval process to conduct a legal raffle in the state of Maryland.
One very cautionary step an individiual should take before even considering the companies that say they can raffle your house; is to verify with your State’s Government, usually the Secretery of State for your State, see if they are registered as a Solicitor. This is required in most states, to allow the company to act as an agent and collect a fee for helping the homeowner raffle their home. I can be contacted with general questions regarding the process, I’m not a lawyer, but I can guide the individual investigating the possibility of a House Raffle to the proper authorities within their state to begin the process, or investigate individual, or businesses that are representing themselves as agents to handle the auction for the Homeowner.
Our Current Home Raffle is at Http://www.Raffle777.com
John, I hadn’t seen your comment previously, so I’m not sure you’ll see this. I wasn’t sure which post “above” you were referring to, but I’ll bet that both solid information and misinformation abound, especially when a new concept comes onto the scene.
It all underscores the need to do the due diligence. Thanks for your contribution.
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Dear Elaine,
I truly believe you’re a respectable writer…. and do “your” due diligence before pointing fingers.
I’m a licensed agent, and truly, find the Raffle idea fashinating… it actually kills more than 2 birds with a stone, and for a good cause.
I do agree that Raffles are risky business, is there anything that is not, and it’s called business???
If you would bother to make a serious search, you would find flops…God forbid, even fraud!!! but in my humble opinion, there’re also serious, dedicated professional that conduct successful Raffles as well.
We have created our site with everybody in mind, and since we’re in the field, we enlist short-sale or distressed situation as well on case by case.
While the Non profit risk their “reputation” at http://www.FloridaHouseLottery.com we risk ours and years of investements and money.
Let me just add, Benjamin Franklin use to say: Doing Good, While doing well!
I find a little weird that charities are wondering about their “faces” while they could take a little change…. in helping others; which… by the way, THEY are taking.
best regards
Thanks for your comment, Antonio. My intent was not to point fingers, but rather to bring attention to this new fundraising idea. And, as with anything new, there’s a need to do the research and evaluation.
You make a good point – there will be good ones and unscrupulous ones. The key is for organizations to find the “good guys.” Thanks!