A while ago, before covid paused so many of life’s activities, I was watching a junior footy match. Feeling hungry, I headed to the canteen to grab a pie and a drink.
Just as I arrived, the crowd roared. ‘Jeez, the action happens every time I’m not watching.’ I thought.
The woman at the counter excitedly shouted, “I think that was your grandson who scored Robbie” to the gentlemen manning the BBQ. “Really? You beauty” he yelled as he waved his arms high above his head, never taking his eyes off the pile of sausages he was cooking.
With a big smile, the woman collected my money and asked “Would you like to support our raffle?”. “Sure, what’s the prize?” I asked. She pointed to a poorly printed image of a coffee machine that was stuck on the canteen wall advertising tickets for $2. “Put me down for one” I agreed.
I felt a little uneasy purchasing just one ticket for such a small amount, but I simply had no interest in the prize. Not that I don’t like my coffee, it’s a morning treat that I eagerly look forward to. I already owned a nice coffee machine and so the prize just didn’t generate any enthusiasm. I gave my $2 as a donation rather than as a chance to win a prize.
The fact is, for smaller volunteer led organisations. It’s far easier and less risky to raffle an accessory, such as a coffee machine or a hair straightener rather than purchasing a more desirable prize.
Often donated, smaller prizes make life easier for the raffle organiser, but they rarely generate the excitement that larger prizes do, ultimately reducing the amount of funds raised.
If you have ever run a raffle, you have probably asked the question.
Should I go with one huge prize or many smaller prizes?
Thankfully, research provides some handy guidelines for selecting prizes. I’ve summarised some relevant articles to spare you reading through loads of jargon and complex mathematics.
Research findings regarding prizes are focused around two key areas.
1. The differences between fixed prizes and offering a prize that is a percentage of the ticket sales, such as a 50-50 raffle.
The main findings were:
- For similar prize sizes, a raffle with fixed prizes generates more revenue for charitable organisations than percentage prize raffles
- Fixed prizes induce significantly greater participation and much higher revenue than raffles using percentage-based prizes.
Conclusion: Fixed prize raffles outperform raffles where the prize is a percentage of ticket sales.
2. The size of the prize and the number of prizes provided.
The main findings were:
- Raffles will perform better when the first prize is much larger than any other prizes on offer
- A single large prize works well unless you are selling tickets to risk averse people
- Larger prizes generate higher ticket sales
Conclusion: Fewer larger prizes are better than many smaller prizes.
And there you have it. Bigger is better.
Something definitely worth considering when you are planning the prizes for your next raffle.
This is easier said than done. It’s not like raffle organisers can click their figures and get access to amazing prizes.
Or can they?
Bolsta Shared Raffles Coming Soon
1. Financing public goods by means of lotteries (Morgan, 2000)
3. Funding public goods with lotteries – experimental evidence (Morgan & Sefton, 2001)
4. Toward an understanding of the economics of charity: evidence from a field experiment (Landry et. al. 2006)
5. Using lotteries to finance public goods: theory and experimental evidence (Lange et. al. 2007)