5 Myths About TapKat Sweepstakes Fundraising
In our conversations with nonprofit leaders, we’ve noticed that there are still some misconceptions about sweepstakes fundraising out there in the nonprofit fundraising world. It’s okay! This is a relatively new way to raise money, and organizations and donors alike are still adjusting to the wonderful world of sweepstakes fundraising.
Today, let’s let at some common misunderstandings about what sweepstakes are and how they work.
Myth #1: TapKat Sweepstakes are the Same as Raffles
Nope! Not even close. While sweepstakes and raffles may seem similar from a donor’s perspective, they’re actually very different… and their differences are a really big deal for nonprofits.
In short: Raffles are considered gambling because the only way to enter (“play”) is to pay for a ticket. Because of this, raffles are highly regulated by the government at a state level (yes, even when you’re fundraising for a good cause!) Not only that, but every state manages its raffle guidelines differently and some states have even outlawed raffles. As a result, nonprofits typically encounter lots of challenges when they try to run fundraising raffles, including having to register with the Secretary of State, limitations on what their raffle prize can be, limitations on how much they can raise and how they spend the money, limitations on advertising (you cannot advertise a raffle across state lines, which means promoting a fundraising raffle online is not legal), and more. Talk about a lot of hoops to jump through!
On the other hand, sweepstakes are not considered gaming because every sweepstakes offers an “alternative method of entry.” This means that everyone who wants to participate has the option to do so at no cost. If they want, people can send in a form via snail mail and receive an entry to the sweepstakes.
This is important because it means that sweepstakes are not gambling. As a result, nonprofits running sweepstakes are able to market their fundraiser across state lines (ie., online), they can raise as much as they want, have access to the funds relatively quickly, have much more freedom when it comes to selecting their prize, and more.
If you’re interested in learning more about the differences between sweepstakes and raffles and how these differences will impact your ability to fundraiser, please download our free informative PDF here.
Myth #2: TapKat Sweepstakes are the Same as Auctions
Live, silent, and online auctions are quite different than sweepstakes. In an auction, donors make competing bids to try and take home the grand prize. In the end, the person who bids the most money will be the winner, and everyone else (and their funds) will go home.
Sweepstakes follow a more inclusive model that has the potential to raise much more money. Each entrant makes a donation or sends in an alternative method of entry for the chance to win. The more people that enter, the more money is raised, the more individual donors are added to the nonprofit’s donor base. At the end of the sweepstakes, a winning ticket number is drawn randomly, which means that even someone who enters at a $25 donation level has a chance to take home the grand prize. And yes, TapKat sweepstakes have certainly had winners at the $25 donation level!
Nonprofits love how inclusive TapKat sweepstakes are. You don’t have to be the wealthiest donor to ultimately win. That said, auctions and sweepstakes serve different purposes and can work beautifully in tandem. Read more about how that works here.
Myth #3: TapKat Sweepstakes are Illegal or Very Complicated in my State
Unlike raffles, sweepstakes are not considered gaming, which means they are legal in all U.S. states and territories.
We often talk to nonprofit leaders who have had unpleasant experiences running fundraising raffles in the past and transition over to sweepstakes because they are so much easier.
With sweepstakes, everything is streamlined and automated online. This means no printing out thousands of tickets and putting them in a giant drum when it comes time to draw the winner, no manual sending out of receipts, etc.
TapKat has pre-written rules vetted by our legal team. Your organization does not need to figure out the rules of your sweepstakes, we’ve done all that for you.
TapKat also provides an FAQ page for your donors, so you don’t spend hours answering questions from donors. It simplifies the process enormously.
No need to register your fundraiser with the Secretary of State, submit paperwork to the government, or adhere to laws around gambling. Sweepstakes is not gambling, which frees up the nonprofit tremendously.
Nonprofits love the transition from raffles over to sweepstakes because, while the fundraiser looks and feels similar to donors who may be used to entering raffles, the raffle-related headaches for nonprofits essentially go away.
We know this first hand, because TapKat was co-founded by the executive director of a nonprofit in Boulder, Colorado, the Shelby American Collection. After jumping through hoops to launch a raffle fundraiser years ago, the nonprofit discovered that they could run essentially the same fundraiser with much less complication if they switched over to a sweepstakes. When other nonprofits saw their success and started asking for assistance in running their own sweepstakes fundraisers, TapKat was born.
These days, the Shelby American Collection regularly raises over $1 million each year with their sweepstakes for a new Shelby Mustang. It’s been a game-changer for this museum, and many other nonprofits who have transitioned from raffles to sweepstakes.
Myth #4: TapKat Sweepstakes Prizes Have to be Donated or Purchased
Receiving a donated prize is a wonderful thing, if it’s the right prize! What’s more important than whether a prize is donated or purchased is whether the prize is the right fit for your donor base. The “right fit” will be a prize that excites your current donor base and attracts new donors. (Learn more about selecting the right prize in this blog post.)
Another great option is to acquire your prize on consignment, which means that your organization doesn’t pay for the prize unless a minimum raise is met that can cover the cost. So, for instance, if you select an all-inclusive Cabo vacation as your prize, your sweepstakes rules will stipulate that the prize only comes into play when a certain minimum raise is met. If the minimum raise is not met by the time the sweepstakes ends, your organization will give a percentage of the raise to the winner as a prize — but you’ll still have raised funds!
Learn more about how consignment prizes work here.
A great place to start your search for prizes on consignment is with our prize partners, who love working with our nonprofit customers and can easily walk you through the process of securing a prize on consignment. Additionally, we have a sample agreement that many of our nonprofits use with outside vendors when they’re brokering their own consignment agreement. Just email us to request the agreement and we’ll send it over!
Myth #5: TapKat Sweepstakes Only Work for Large Nonprofits
U.S.-based nonprofits of all sizes have acheived success with TapKat sweepstakes. We’ve seen small nonprofits launch sweepstakes for weekend getaways and raise anywhere from $5,000 to $20,000 with a fun trip, and we’ve seen larger organizations raise hundreds of thousands of dollars with sweepstakes for hot sports cars.
We’ve also seen smaller nonprofits run multiple sweepstakes year after year and grow into annual fundraisers that bring in over $1 million.
TapKat sweepstakes are the kind of fundraisers that grow with your nonprofit. No matter how big your base, you can raise meaningful funds for your organization with TapKat sweepstakes.
If you’re ready to get started, apply for a TapKat account today.
