A Fundraising Lottery or Prize Draw is a great way to generate a secure & predictable income stream for your organisation and to offer your supporters the added incentive of winning a prize
In Ireland the legislation governing charitable lotteries and is The Gaming and Lotteries (Amendment) Act 2019, which came into effect on 1 December 2020. The 2019 Act modernises the Gaming and Lotteries Act 1956 and helps the better promotion of local gaming and lottery activity.
Benefits of running a Lottery or Prize Draw
Having a weekly or monthly draw in place offers many benefits and while it takes time and resources initially to get your lottery started, the long term rewards well outweigh the initial investment.
Recurring Income Stream
One of the key features of a lottery is the recurring nature of the income it generates and the fact that you continue to reap the benefits from your promotional efforts year after year. This makes it a very lucrative option that just makes sense for charities and NFP’s with limited fundraising budgets.
Maximising draw proceeds
Operating your own in-house lottery has many advantages over using a managed lottery solution run by an external provider. It provides you with full control of your draw membership data – so that you can harness the goodwill that exists for your organisation.
It is also a much less expensive option than using an external provider. Most managed lottery providers retain a percentage of the weekly draw revenue; this cost when measured over the lifetime of your lottery amounts to a substantial financial outlay that could be used more effectively within your organisation.
Life Long Giving:
Having a secure and predictable annual income stream is an invaluable asset to your organisation, for cash flow and financial planning purposes. In addition it fosters a culture of life-long giving and is an ideal way to encourage working place or payroll giving schemes, giving companies the opportunity to make a valuable contribution to your charity or not-for-profit.
6 Things you should Know and Do before starting
1. Define your Goal
The most important step in setting up your lottery is to have a clearly defined objective at the outset. A measurable goal or outcome you wish to achieve within a desired time frame. It is well accepted that fundraising with a clear objective is much more likely to succeed; and the most successful campaigns have a clear and compelling message that can capture the hearts and minds of your target audience.
Have a brainstorming session to decide what your key objectives are as a charity and what are the key projects/ services you would like to implement, that will have the most impact on the lives of your members. You then need to consider how you can translate this into a meaningful message for each member or supporter of your organisation and/or the general public.
2. Carry out Financial Analysis
Getting your numbers right and doing your financial planning is crucially important before you begin your draw or lottery. CHAMP has created a Financial Analysis Spreadsheet that will help you to calculate what your profits will be based on the number of participants you have and the prizes you offer .You can change the various parameters and the spreadsheet will automatically calculate your prize costs & profits.
This spreadsheet will also allow you to work out what your break even figures are i.e. what is the minimum number of participants you will need to cover the cost of your prizes.
The Prize Structure element of the spreadsheet works through some examples of prizes you can offer and the total costs and profits associated with these. The prizes you give are completely up to you. You may also consider asking companies, hotels etc to sponsor prizes etc. This is good P.R. and an advertising opportunity for them also.
3. Develop a Strategy & Decide on Routes to Market
Once you have decided on your goal and have completed your financial planning, the next step is to define your strategy, i.e. what are your routes to market. The routes to market you take will be decided based on the type and the ethos of your organisation.
Examples of routes to market include:
- Membership & Supporters – Tap into your existing membership or supporter base
- Direct marketing – door to door selling or street sellers
- Corporate Sector – Direct contact/ Solicitation letters looking for sponsorship/ sign up for work place giving schemes
- Email Campaign to your database of subscribed contacts
- Website Advertising
- Line Draws in Retail Outlets
- Social Media Advertising & Posting – Using facebook, twitter & Linkedin to promote your draw
- Advertising – print media – national & provincial papers, national or local radio
4. Obtain a Lottery Permit or Licence
Prize draws and lotteries in Ireland are subject to The Gaming and Lotteries (Ammendment) Act 2019. Full details of the requirements of the act can be found here or by visiting the Department of Justice website https://www.justice.ie/
Charitable lotteries may require a Lottery Permit or Lottery Licence depending on the value of the prizes and ticket price. Details of the requirements are set out in the table below:
|Nature of activity||Max Ticket Price/Sales||Max Total Prize||Purpose of gaming or lottery||Issued by/max period of validity|
|Gaming Permit(Cards, Darts, Quizzes, etc.)||€10||€3,000 per game||Charity/Philanthropic Purpose or for private benefit of promoter||Garda Superintendent/12 months|
|Lotteries without Permit or Licence||€5/ max 1,500 tickets available||€1,000||Charity/Philanthropic Purpose only||No Licence or Permit required/once in every 3 months|
|Promotional Lottery||No charge. (other than purchase promoted product (if required)||€2,500||N/A – for product promotion purpose only||No Licence or Permit required|
|Lottery Permit||€10||€5,000 per lottery per week||Charity/Philanthropic Purpose or for private benefit of promoter||Garda Superintendent/12 months|
|Lottery Licence||€30,000 per lottery per week²||Charity/Philanthropic Purpose only³||District Court/12 months|
Most charitable lotteries and prize draws, based on prize values and draw frequency will fall into the category that requires a Lottery Permit. A permit can be obtained from the Garda Superintendant in your area and generally remains valid for a 12 month period.
The following conditions apply to a lottery permit:
(a) the value of each prize shall be stated on every ticket or coupon or, where the lottery is conducted in a premises, such information shall be prominently displayed at the normal means of access to the premises proposed to be used;
(b) the price of each ticket shall not be more than €10;
(c) the total value of the prizes in a lottery shall not be more than €5,000 or where more than one lottery is held in any week the total value shall not be more than €5,000;
(d) not more than 5 per cent of the total proceeds shall be retained by the holder of a lottery permit when the lottery is held for the benefit of a charitable organisation.
More information on Lottery Permit can be found here
5. Implement an Effective System to manage Draw members & Income
Having a system to run your lottery or draw ensures compliance with regulations and reduces administration time and overheads. CHAMP Lottery software is intuitive and easy-to-use and it manages all aspects of administering your draw.
We will provide full data services and training and hand hold you through the first weeks and months of running the draw, to ensure it all runs smoothly.
6. Create Marketing Materials & Decide on Promotion methods
Simple and effective marketing tools that spell out your message
- Solicitation letters, Email text & images for target markets ie members, general public, corporate sector
- On-line marketing – website, twitter, facebook & linkedin
- Using Direct Marketing companies for leaflet drops etc
- Radio Adverts – simple voice overs are very effective – consider local radio in a given region or local area to coninside with mail shot campaign.