Sweepstakes or Auctions: Which is Better for Your Nonprofit? Both!

Sweepstakes are a relatively new form of fundraising in the nonprofit space, one that is exciting to donors, inclusive to all, and an excellent strategy for building your individual donor base and raising funds. 

At the same time, many nonprofit leaders love the cornerstone nature of auctions: donors have grown familiar with the mechanics of live and silent auctions, and often, big-ticket donors can be relied upon to show up for live auctions to bid on big prizes. 

So, do you have to choose between a sweepstakes and an auction for your next fundraising event? 

Nope, not at all! Sweepstakes and auctions are different approaches that address the different needs of a nonprofit, and in the end, running a sweepstakes will be an excellent addition to your annual fundraising strategy because it will help round out your approach to donor attraction, retention, and it's a great strategy to reactivate lapsed donors. 

Let's take a look.

TapKat Sweepstakes are Inclusive

First and foremost: sweepstakes are inclusive! Everyone can play, and anyone can win. This is much different than the reality of an auction.

Auctions are great for live events, especially when one or two people (or more!) are ready to raise their hands for a nice sum like $10,000 to go on a trip to Italy. They’re a great tool for working with large donors who are more than willing to show up and champion your cause.

At the same time, there’s an entire class of donors that may not be able to participate in a high-ticket auction, let alone have a shot at winning. Why not run a sweepstakes at the same time, and raise an additional $10,000 or even $20,000? Everyone can participate at a level that works for them, whether that means entering at a donation level of $25 or $2000, and anyone can win — which builds excitement and enthusiasm for the fundraiser among your entire donor base.

The great thing about sweepstakes is that anyone can enter — and anyone can win.

Yes, donors at the $25 donation level have won TapKat sweepstakes! Last year, Michael Eaton won a beautiful red 1964 Corvette Stingray Convertible with a $25 donation to the Auburn Cord Duesenberg Automobile Museum. How cool is that? 

Studies have shown that grassroots donors are more important than ever for the financial health of a nonprofit organization, and providing opportunities for donors to participate at all levels is an important way to keep them engaged and motivated to give.

Keep your donor base healthy with a sweepstakes! 99% of TapKat sweepstakes attract new donors.

Quick note: Sweepstakes are not the same as raffles. While they may seem similar, an important distinction is that sweepstakes offer an "alternative method of entry." This means that someone can mail in an entry without making a donation and still be entered for the sweepstakes. Because of this, sweepstakes are not viewed as gambling in the eyes of US law, which means that nonprofits have much more freedom to market their sweepstakes across state lines, there is no limit to how much you can raise with a sweepstakes, no restrictions on how the funds can be used, and no need to register with the State. 

For a more in-depth look at the differences between sweepstakes and raffles, click here.

TapKat Sweepstakes Provide Ongoing Cash Flow

In terms of cash flowing into your nonprofit, sweepstakes operate slightly differently than an auction.

Rather than all the funds hitting your account at the same time when the auctions items are sold, donors contribute on an ongoing basis through the duration of the sweepstakes. So, say your sweepstakes will run for five months. Your nonprofit can set up your funds to be deposited to your bank account once or twice a month. This means that for those five months, cash flows into your organization, and you can spend it however you need to as soon as it hits your account. 

This type of income structure can be a game-changer for many nonprofits that work with TapKat. Our customers report that ongoing cash flow allows them to more easily fulfill their mission.

TapKat Sweepstakes Can Run Simultaneously with Your Auction! 

By now you may have surmised that sweepstakes can actually work as a fantastic supplement to your annual fundraising agenda. Here’s an example of how this might work:

Suppose you have an annual gala each October, which provides an influx of cash. That's great! Imagine if, at your live event, you announce your sweepstakes for a hot new Corvette or once-in-a-lifetime travel experience (read more about our favorite prize ideas). Explain to the donors that anyone can enter, and that the winner will be drawn just in time for summer.

This is a very effective way to kick off a sweepstakes without distracting from your auction plans. We've noticed that sweepstakes don't tend to take away from other fundraising activities; donors see it as a separate contest, and are likely to enter both.

After the live event, you can email out a thank-you to your base and include a special promo code for anyone who attended the live event. Continue marketing your sweepstakes until it closes, and enjoy the incoming cash that comes with it. 

There are many possibilities for combining sweepstakes with your regular fundraising activities. Capturing an audience of engaged, enthusiastic, grassroots donors is key for nonprofit success. 

If you'd like to learn more about sweepstakes fundraising, schedule a demo with one of our team members today!