Chapter 7

Gambling

Many nonprofit groups have had success with techniques designed to lure people in, whether or not they care about your cause, or even know which organization is hosting the event. Ethics, and the effects any fundraising technique has on your image must be considered carefully.

Examples include: bingos, raffles, casino nights, and draws for a vacation, a house or a Rolls-Royce (runner-up may win a pair of matching Porsches).

Raffles may be the best of these techniques because they are more than just a source of short-term income. They can be a way to acquire new supporters for the long term. In raffles, you can also get donations for prizes and ticket printing, making raffles virtually cost-free. Raffles also present fewer ethical concerns for most groups.

Raffle tip: Create a perception of high value.

Concentrate on `dream prizes' as opposed to cash. It is too difficult to compete directly with government lotteries offering large sums of cash for low ticket prices. Dream prizes add a unique flavour. Examples include trips, weekends in hotels or resorts, dinners in restaurants, tickets for major sporting events or concerts, larger consumer goods such as a barbecue, a canoe or a snowmobile.

Offer many prizes, so that more people win. Increasing the odds of winning increases ticket sales. For example, you might give away a hundred items as the tenth prize, such as flashlights, free hamburgers at a local restaurant, or hats bearing the logo of a major sponsor.

If possible, guarantee that every ticket-buyer wins a prize worth at least the price of their ticket. For example, ticket stubs could be used for a discount on merchandise, such as two dollars off a pizza, or a tank of gas, car wash or movie.

Get printing free

Arrange to get the printing of the tickets donated. Offer to put the printer's ad on the back of every ticket.

Collect and use names and addresses

Collect the names and addresses of people who buy raffle tickets.

Send them all letters within six weeks of the draw, to convert them to regular direct mail donors. In the letter, announce the winners, state how much was raised, and ask for an additional donation. Pattern this letter after direct mail pieces, using a reply coupon and a postage-paid business reply envelope.

Calculate the percentage of raffle ticket buyers who become donors and compare this to other methods of acquiring new donors. Use the list to make sure each person who buys tickets is asked to buy again each time a raffle is held.

Make sure to comply with all laws

There are a complex array of municipal, provincial and federal regulations affecting raffles and lotteries. Follow these closely. Apply for all necessary licenses.

For example, Revenue Canada will not allow charities to issue a charitable tax receipt for the purchase of raffle tickets.

Provincial regulations may call for a licence fee based on a percentage of the retail value of the total prizes.

Avoid raffling cars and houses

House lotteries have reported difficulties in several cases. One reported a loss of $600,000.

In car lotteries, the car is seldom donated, although it is often provided at dealer's cost. It must be paid for in advance.

Consider a large-scale lottery

After — and only after — testing small-scale raffles, investigate very large-scale lotteries.

The Health Sciences Centre in Winnipeg, for example, held a very large-scale lottery in 1991, which grossed about $1.3 million.

They retained a company to research what prizes people wanted most, to establish prizes, and to create a ticket sales structure. There were a total of 648 prizes. Ticket buyers had a 1 in 24 chance of winning.

Tickets were $100 each. Please note that the Health Sciences Centre had previously had a $100 per ticket raffle. They also had a list of almost 24,000 people who had previously purchased raffle tickets, and almost 8,000 donors.

A full-colour package was sent out to 32,000 previous donors and raffle ticket buyers. Another 100,000 were sent as postal drops to affluent neighbourhoods. This required a substantial investment.

Special phone lines were established with bonded operators to take ticket orders over the phone with credit cards. About 40% of the orders came over the phone. Slightly over 40% more came through the mail. The remainder, just under 20%, were sold through personal contacts.

In conclusion, this was a complex, expensive, professionally managed undertaking for a highly respected, well known hospital — and it was extremely successful. Grassroots groups might not do as well.

The Pro's and Con's of Gambling

Although the laws are different in each province, key issues remain the same.

Pro: Reach New People

People who buy lottery tickets are not doing so as donors. The majority of people who buy tickets are interested in the possibility of a pay-off. From 5% to 20% of them buy to support the group itself. This means you can get money from people who would never otherwise support your work.

It may also mean that you can convert a fraction of them to supporters — but only if you get their names and addresses. That's hard to do with Nevada tickets or bingo games. It's much easier with raffles.

Pro: Big Profits — Sometimes

Bingo operations at the Toronto-based Variety Club of Ontario, which aids handicapped children, produce more than $2 million a year — over 50 per cent of its total revenue, director Michael McLaughlin said.

Break-open tickets are increasingly popular. Why? “Profit is seven times investment”, says the president of Mister Nevada Ltd.

Con: Potential Losses

Chatham, Ontario, now has three bingo halls, with a population of 42,000. A charity organizer there says that on one evening, after the prizes had been given out and the hall paid, “I think we lost $7, overall — for a whole evening.”

Con: The Cost of Prizes

Provincial laws may require that you have all the prizes in advance. If there is a cash prize, the money must be deposited in the bank before you start and remain untouched throughout the draw. Thus, you can't use the income from the first tickets sold to buy the prizes.

Con: Difficult or Impossible to Change the Raffle Date or the Prize

Once you start a raffle, you cannot postpone the date of the draw, just because ticket sales are low. According to various provincial laws, even if you are losing money, you must stick to the schedule. Nor can you change the prize after the permit is issued.

Con: Legal Risks

The York Region (Ontario) branch of the Alzheimer Society and four lodges of B'nai Brith pleaded guilty in provincial court to altering bingo game schedules and exceeding authorized prize limits, in 1990. Dozens of additional charges have been laid against charities and hall operators.

In Hamilton, Ontario the gate shortfalls at the three bingo halls then operating (there are now five) resulted in the halls extracting an average 23% of the take as expenses, instead of 15%, according to figures obtained by municipal officials in 1988. Those extra eight percentage points translated into almost $900,000.

Yet so powerful are the hall owners — increasingly concentrated in numbers — that virtually no charity is willing to complain publicly.

“The hall owners, through fear and intimidation, can make the charities sit up and bark”, said one provincial government official.

Staff Sergeant Peter Benge of Metro Toronto's Morality Squad estimates that a minimum of 5% of the money due to charities never gets there.

“More than $30 million is skimmed off charitable proceeds annually by unscrupulous operators”, says Ontario's Minister of Consumer and Commercial Affairs, Marilyn Churley.

Multicultural Moment:

The Lottery

Lotteries were around well before recorded history in the Far East. They were also a favourite amusement of the Roman patrician class. In the middle ages, Italian merchants used them to dispose of merchandise.

The year 1466 saw the first recorded public cash lottery in Bruges (Belgium). In 1520, Francis I established lottery offices in Paris and four other French towns. As European rulers recognized their revenue potential, lotteries quickly spread throughout Europe during the 16th century, and to the European colonies in the 17th and 18th centuries.

The British Museum was started with a lottery in 1753, authorized by Parliament to finance the first collections. The lottery raised £300,000.

By the mid-19th century, lotteries began to fall from grace. Mal-administration, overuse, illegal practices and moral outrage stamped them as a disreputable revenue source. In the United Kingdom, state lotteries operated from 1569 to 1826, when they were declared unconstitutional.

In 1846, the British Parliament, through the Arts Union Act, exempted voluntary associations from the general prohibition and permitted them to operate lotteries “distributing by chance works of art”.

The first lottery in what would become the United States was authorized by King James I in 1612. By the end of the 18th century, lotteries were commonly used in support of education, including such prestigious institutions as Harvard and Columbia Universities. In addition, they were used to finance public works such as streets, buildings, water supplies and fire equipment.

Americans prohibited lotteries from the 1830s until 1964.

In Montreal, in 1783-84, the British authorities ran a lottery to construct a new prison for the city.

In later years there arose in Lower Canada “a whole new spate of lotteries — all claiming to support one or another such worthy cause as the promulgation of Fine Arts and Letters, Maple Syrup, Fatherhood…”

During the 18th and 19th centuries, there is no evidence that lotteries were used in Upper Canada except for the abortive attempt to finance the Ontario, Simcoe and Huron Union Railway in 1849.

Today, Spain has the largest lottery in the world. Lotteries also operate in Mexico, the Netherlands, Austria, Australia, West Germany, Brazil, Japan, the former Soviet Union and most Eastern European countries.

Source: Lotteries and the Arts

Chapter 8

Institutional Grantors

SERVICE CLUBS

Service clubs give millions of dollars and thousands of volunteer hours to good causes in every community.

There are many different clubs — the list at the end of this chapter names almost a hundred, and more are added often. Some are world-wide; others operate in a single neighbourhood. The definition includes groups of employees such as the Telephone Pioneers of America, religious groups like the Knights of Columbus or Anglican Church Women, and even car fanatics such as the Corvette Clubs.

Many nonprofit groups have gotten support from service clubs just by luck. Working with them effectively, however, involves a systematic process. This can lead to multiple and growing donations lasting over several years.

Here's how to proceed:

Step 1

Find Your Contacts

Making contact through a member is the most effective way to begin.

a) Who do you know?

Do you know anyone who is a member of a service club? Endorsement of your work from a club member will help you get a donation. To find someone who belongs, ask your:

[] board
[] volunteers
[] staff
[] family
[] donors
[] members
[] clients

b) Ask for introductions

If you have previously received support from any service club, ask them to introduce you to other branches of the same organization.

Ask, too, whether the service club has different divisions for younger and older members, or men and women. You may be able to get donations from each level.

For example, the Junior Chamber of Commerce — known as the JayCees — doesn't allow people to remain members after their 40th birthday. However, people over 40 can belong to the JayCee Senators.

c) Find local clubs

Service clubs almost always prefer to help local groups. This does make it more difficult (but not impossible) for nonprofit groups that operate regionally, provincially, nationally or internationally.

No national directory of service clubs exists yet, to the best of my knowledge. One reason is that many clubs have no building, and the mailing address changes as the executive members change. However, directories are available in many communities. Service clubs are often listed in the directory of social services which is researched and published by the local community information centre, volunteer centre or the United Way. This is often called the Blue Book (or the Red Book).

Failing that, look for signs showing where and when meetings are held. These are often found in hotel lobbies, or at the city limits in smaller cities.

d) Join a club

Consider joining a service club yourself, if you hope to build long-term support. You will learn a great deal about the club culture, gain credibility, and meet interesting people.

Profile of a service club

The Junior League

The Association of Junior Leagues International has over 276 branches in Canada, the USA, Mexico and Great Britain. There are more than 188,000 members. They reach out to “women of all cultures between the ages of 18 and 44 who seek active community involvement and opportunities for leadership through volunteerism.” The Junior League has been operating since at least 1926.

The Junior League has an unusual way of helping. They adopt selected nonprofit groups and assign members to serve on the groups' boards as representatives of the Junior League. These members receive special training in how to be outstanding board members.

Like many service clubs, they also provide grants, often extending over many years. Examples of larger projects taken on by the Junior League of Toronto (as listed in their brochure, Reaching Out Together) include:

Step 2

Research The Club

Every service club has a different mandate and interest area. Find out their interests before approaching them officially.

a) Ask a member

Ask a club member what their club has supported. What are their priorities?

b) Do speeches, requests mix?

Ask if it is appropriate to request a donation when making a presentation. Some welcome it; others consider it rude.

c) Different kinds of help

Ask if they can provide financial support or people power. Many clubs prefer to help out with labour. They may adopt your cause and organize a special event for your organization on their own. They may volunteer to help out on your bingo night. They may agree to sell tickets to an event you organize.

The Foothill Kinsmen in Ontario's Niagara Peninsula, for example, included the Spina Bifida and Hydrocephalus Association in their annual benefit dance. Over 800 people attended. Kinsmen assisted in setting up the stage, providing security around the arena, and selling tickets for a television set that was raffled off. The Spina Bifida and Hydrocephalus Association got the proceeds of a golf tournament held by the Associated Canadian Travellers, Windsor District, in 1993.

Mississauga Recreation and Parks' Teen Centres approached the Civitan service club, with estimates and alternatives in hand, to ask for a sound system. The Civitan not only agreed to donate the cost of the system — they went with the teens to select it. It now provides the music for the Teen Centres' weekly dances, and occasionally is loaned to the Civitan for their events.

d) Who are the typical club members?

It's always nice to know who you will be talking to. Clubs can be very different from one another.

In some clubs, the profile is well researched. The Royal Canadian Legion, for example, published this profile of people who subscribe to Legion magazine, compared to average Canadians:

Profile of Legion Members
Living in communities of less than 200,000 people:
    Canadian average 50.3%
    Legion subscribers 76.1%
Healthy and active:
86% of Legion subscribers claim avid interest in health, medicine and science, and pursue activities such as walking, jogging, gardening and travel.
Early adopters:
86% buy new products like microwaves, VCRs, camcorders, CD players
Securely Affluent:

• 78% own their own home
• 57% live mortgage-free

e) More questions to ask

What causes do they usually support? The Lions Club, for example, has major programs on service to the blind and sight conservation.

Do they usually give money, time, or some other form of support?

How much do they usually give?

How many groups do they support each year?

Will they support a group for several years? If not, how long must you wait before you apply again? The Ottawa chapter of the Altrusa Club (an international business and professional women's association with 20,000 members in 17 countries) has supported the Elizabeth Fry Society for more than 35 years, according to the Altrusa Club's spokeswoman, Mureille Normandin.

What specific topics do they have strong views on, requiring you to be careful?

Can you make a presentation to them?

How long can your presentation last?

Can you bring audio-visual aids?

Step 3

Make A Presentation

Service clubs often welcome speakers — perhaps too much so. Clubs that meet weekly are hungry for fresh entertainment.

Beware! Not everyone who speaks gets a donation. Some get only a souvenir paperweight or a ceremonial cactus.

Why it's worth making a presentation:

• You may get a donation from the club.
• You may get support from some of the individuals attending, if not from the club.
• You may meet some influential people.
• You may consider it important for community education.
• You can rehearse your public speaking.
• A good presentation may impress them deeply. Emphasize the emotional and human side of your work. Remember the old truism: “People give to people.”

Step 4

Follow up

If you get a donation, make sure to thank the club properly. It's amazing how many report that the only way they know the donation was received was that the bank returned the cancelled cheque.

• Write to the club president and any other officers you met. Have the people you help write a letter of thanks, if it won't violate their dignity or privacy. Drawings from children are especially popular.
• Give them credit on your event program or flyers, or in your annual report.
• Arrange publicity in the media, ranging from a photo of a cheque presentation to a ground-breaking or ribbon-cutting ceremony, to a letter to the editor.
• Invite them to see the project they funded in action.
• Send holiday greeting cards.
• Encourage them to write about the project in their club newsletter, locally or nationally.
• Ask if they will make connections for you to other levels of the club, or to people they know in other service clubs.

Service Clubs

Tapping the Hidden Market

Tom F Balke

Service clubs represent one of the untapped markets for donations, gifts in kind, and key contacts in the community.

This article will describe the particularities of service clubs, how you can locate contacts in your community, how to approach service clubs, and how you can network with service clubs for a variety of purposes.

The Who, What, and Where of Service Clubs

A quick look in your local community newspaper will provide you with information concerning the service clubs active in your community. A service club can be loosely defined as any community-based organization which has regular meetings, raises funds, and supports various service projects. Some of these clubs have their own foundations and national organizations which may provide matching funding.

You may already be familiar with a number of service clubs, including the following: Cosmos, Kinsmen, Knights of Columbus, Lioness, Optimists, Rotaract, Comradettes Service Club of the Blind, Kinettes, Legion, Leos, Soroptimists, Interact, IODE, Kiwanis, Lions, Masons, Rotary, and Zonta. Each club has its own specific interests and project requirements. The majority of service clubs are interested in community projects rather than international projects, and yet the experience of Operation Eyesight Universal shows that with effective marketing and project follow-up, anything is possible.

Service clubs assist with a range of charity projects including crisis intervention services, environmental projects, drop-in centres, international student exchanges, and the arts.

It is important to understand that each group has distinct culture and organizational rituals. Your task is to make contact with your local service club and determine what interests it. Service clubs are sometimes jealous of each other as they compete in fundraising projects, and vie for media attention in local newspapers.

How to Infiltrate Your Local Service Club

Which of the above organizations have you had contact with? Do you know any local Rotarians, Lions, or Kiwanians? Does anyone on your board know someone involved with one of the above clubs?

The best way to approach service clubs is through the back door. Offer through one of your personal contacts to give a presentation to the local club. This method is far more successful than the cold call approach.

If all else fails, contact your local newspaper, chamber of commerce, city hall, or reference librarian.

Membership in Service Clubs

If you are responsible for fundraising over a large geographic area, you might consider becoming a member of a local service club. This will grant you a level of respect which is otherwise difficult to develop. Membership in a service club is only effective if you are willing to take the time and effort to network effectively.

Membership in a variety of service organizations enables you to `make up' at any regular meeting of any club around the world. This is your passport to visiting other clubs in your area and gives you the opportunity to informally discuss the work of your charity.

Presentations to Service Clubs

Before making a presentation to your local service club, take the time to ask the program chairperson how long your presentation should be, whether a slide projector or VCR is available, and how many people will be in attendance.

Each service club has its own protocol. You may want to ask what the specific interests of the local club are.

Plan ahead to bring brochures and audio-visual aids. Be visual!

Remember, many `knife and fork' members have heard hundreds of presentations — make sure that yours is interesting, visual, and relates to a mix of personal experiences explaining the human impact of your organization. Humour also helps, but it should not be overdone.

Many service clubs are uncomfortable with a strong direct pitch during your presentation. Don't tell them how much you want from the club; seed imaginations, provide them with opportunities, and above all tell them moving personal stories about the concrete impact your charity has had.

Making the Solicitation

I have found that the best response is obtained by preparing a specific proposal tailored to the interests of a given club. Follow up your presentation with a nice letter to the president containing a project proposal. If you are on the ball, you may be able to prepare a selection of proposals in advance to give to the club. The club president or committee chair is the best person to give it to.

The majority of service clubs have specific committees which meet regularly to deal with funding requests. Your request may first be sent to the director of community service for discussion and then on to the directors for approval. It is important to obtain the names of key people in this process.

Use the time before and after the meal to strategically determine what kind of projects the club sponsors, the range of gifts, and the fundraising activities they are involved in. You may find that you can offer them assistance in their fundraising program. It is crucial that you express a genuine interest in their club and their individual professions.

If you fail in your request, try again. Ask when they might be able to consider another application. Learn from your experiences, and thank them for their consideration. Remember, you are in it for the long haul and your contacts with a specific group may lead to other opportunities.

Once You Get the Gift

Congratulations! You have succeeded in presenting the case for your charity and have effectively infiltrated the culture of your local service club. Now for the bad news: they will not give to you again — unless you provide effective feedback.

The most common complaint I hear when I visit service clubs is that a charity has not maintained contact with them, and has not provided concrete follow-up, such as photos, a video, or report about the project which the club has sponsored.

Make sure that the club is properly credited for their contribution. You might want to take the initiative and send an article and photo to the local newspaper or TV station. If this fails, send a nice letter to the editor of the local paper publicly thanking the group for their gift.

Phone the club president to say thank you. Put club members on your mailing list, invite a representative to a reception, send Christmas or Hanukkah cards. If it has been a major project, call the president and offer to present information to the club whenever convenient.

Establishing a Network

One of the key objectives of visiting local service clubs is to make contact with people of influence and affluence in the community. You can meet mayors, lawyers, corporate executives, presidents of TV stations, newspaper editors, printers, and other contacts who could ultimately benefit your organization. Remember to pick up a copy of the club bulletin so that you can have the names and numbers of all the members.

I have been able to lobby members of parliament; get television and radio public service announcements aired, newspaper articles published; have received major donations from foundations, $20,000 in free optometry equipment; and have been provided with

discounted or free merchandise through networking at service clubs.

Do you need major donors, board members, door-to-door canvassers, local media time or permission to have your brochure included in the local water bill?

Start here! Exchange business cards and follow up contacts with a thank you note or a call asking for specific advice. Ask if they know anyone who could be of assistance with a specific task or problem area.

Once you have established a relationship, you can also obtain the names of contacts in other clubs, or even a copy of the local service club directory. This is often a confidential document and is difficult to obtain. Use your contact in a club to link up with other neighbouring clubs.

Are you willing to give, not just receive?

As a fundraiser or volunteer coordinator, you have a great deal to offer. You may even be in a position to offer the assistance of your charity's volunteers when the local service club has its next chicken roast, television auction, or midnight madness bingo. This indicates that you are willing to give and not just receive.

Your local service club may benefit from having a fundraising expert like you to help plan their next campaign. Keep your nose in the door and your face fresh in their minds.

Patience, personal contact, and pizazz! These are the secrets to tapping the hidden service club market.

Tom F Balke, who wrote this article, works for Inter-Varsity Christian Fellowship in Halifax, NS. He is also a Rotary Club member. Published in the July/August 1991 issue of CCP's Network newsletter.

A List of Service Clubs and Related Groups

Service clubs support so many groups that they are almost a standard fixture of fundraising. Yet few nonprofits have a systematic process to identify and contact service clubs. Here is a partial list of clubs and related organizations, to start you thinking. Please add to this list!

EMPLOYEE FUNDS

Employee funds can be another important source of contributions. These funds are separate from the corporate donations budget — they give the employees' money, not the company's.

Frequently, they start up by collecting money to throw a party or buy a present for a co-worker who is having a baby or retiring. They go on to raise money for the United Way. They may adopt a child in the third world. Over time, employees may suggest other causes they could support. In some cases, they become formal organizations which rival service clubs. Members may remain active long after they leave the company.

Employee funds administrators are harder to find than the company donations officers. No directory exists. However, this is good news since it means they are less commonly besieged by requests.

The very best way to find contacts is to ask an employee of the company who supports your work as a board member, volunteer, donor, or `client'.

A cold call will be less successful but is still worthwhile.

Choose the companies with the largest number of employees in your area. A list of these is usually available from the municipal government's business development office.

Call the company and ask the person who answers the phone if he or she knows the contact person for the employee charitable fund. If not, ask the secretary to the president for the right contact. Avoid the personnel office and the public relations department, unless other avenues fail.

You may also get assistance in finding contacts from the local United Way, since they work with many employee funds. If your organization receives funds from a United Way, discuss the rules before approaching a club.

Selected examples of employee funds that have proven generous:

Profile of an employee fund

The Telephone Pioneers of America

The world's largest industry-related volunteer organization is the Telephone Pioneers of America. Their membership (80,000 members in Canada, and 743,000 in the US) includes people who work for any phone company. Their motto: “Answering the Call of Those in Need”.

All together, they raised nearly $9 million in 1992 and volunteered more than 31 million hours toward providing quality services to the lonely, the disabled, and the disadvantaged.

The Pioneers have four key areas of focus, as of 1994: literacy, the environment, the hearing impaired, and drug and substance abuse. However, they take on many different projects. Activities include:

• Hosting special games for the disabled in Montreal.
• Conducting holiday food drives in Manitoba.
• Providing support for the hearing impaired in New Brunswick.
• Working with the Canadian Ministry of Forestry on projects to preserve and protect the environment, through many regional chapters.
• Coordinating a project in Edmonton to collect food, clothing and gifts at Christmas, and distributing the items to needy children and to adults in nursing homes.
• Helping some 400 junior high school students through the Acadia Chapter's “Adopt-a-School” project in Cape Breton. The program stresses the importance of using education as a foundation for the future. Pioneers provide classroom resources and mentors.
• Distributing the “Hug-a-Bear”, a handmade stuffed toy, to police and emergency units. The toys are given to children involved in traumatic situations. Since the start in 1979, nearly one million Hug-a-Bears have been distributed throughout the world, including a shipment to the Middle East during the Gulf War.

Profile of an employee fund

The GE Elfun Society

General Electric Company employees can join the GE Elfun Society. The name stands for Elective Fund Investing. It was started about 1930 by the Management Society within the company, to invest in mutual funds. Since then, it has grown and changed.

Elfun areas of interest are:

• education
• cultural diversity
• the environment

They like to combine these where possible.

The Society rarely offers money. Instead, it will usually send volunteers. However, they can arrange financial support from GE which now ties part of their donations to Elfun work. Examples of their projects include:

• provided mentoring programs for the physically challenged
• built an ecological garden at a school for hearing impaired people
• helped Habitat for Humanity build houses
• worked at food banks
• decorated a women's shelter

To make contact, ask for the Elfun representative at any GE office in Canada or the USA.