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February 5, 2016 Drawdown – Another Way for Nonprofits to Fundraise

There are many methods of fundraising in addition to live and/or silent auctions.  One popular method is a “drawdown”.

Most commonly seen in our demographic is a $10,000 drawdown where tickets are sold for $100 each.  In this scenario the nonprofit must ensure they sell at least 100 tickets to break even, however the goal is to sell 200 or even 300 tickets. Any tickets sold over the 100 ticket threshold are where the revenue for the nonprofit is generated. This can be a very lucrative fundraiser. A word of caution – before you plan this type of fundraiser make sure you are in compliance with your state and local laws.

The drawdown of the tickets is conducted at a live event.  This event often includes a buffet dinner and some nonprofits will conduct a silent and/or live auction in conjunction with the drawdown, which provides a fun evening for the guests and raises additional revenue.

The timing of the drawing at the event is important. We are presently working with a nonprofit who is conducting a drawdown combined with a live and silent auction and we are all aware that the timing of all of these components is critical. I’ll go into detail about that timing later in this blog.

One method of drawdown that we are discussing with this client is drawing raffle ticket numbers but not announcing every one of those numbers as they are drawn. Instead we will pick an increment, say every 10th or 15th or 25th ticket and at that increment announce the ticket number and name and award that ticket holder a prize. The prizes will start with a value of $50 and increase in value and desirability as the evening and drawdown progresses. Ideally, these prizes will have been fully donated items.

Now for the timing strategy: The drawing of the majority of the tickets will be conducted during the silent auction and maybe during dinner but certainly prior to the start of the live auction. We’ll stop when we have 10 tickets remaining and we won’t announce the remaining ticket numbers but will rather conduct the live auction and appeal. This will keep guests at the event while we conduct those additional fundraising activities. Once the live auction and appeal have concluded we will announce the remaining 10 ticket holders who remain in the drawdown. At this point we will offer any of the 10 remaining ticket holders the opportunity to sell their ticket with the condition that a percentage of the selling price will go to the nonprofit and the remaining proceeds will go to the original ticket holder (who will then be out of the game). If no one chooses to sell their ticket, we will draw five of the remaining 10 tickets and again allow any of the remaining ticket holders an opportunity to sell their tickets at auction. Finally, we will draw down the tickets one at a time until a winner is declared.  If at any time one of the remaining ticket holders wants to split the pot with the others remaining in the game, and all parties mutually consent, they may do so.

A drawdown can be a fun and exciting way to raise money – with or without an auction component.

Make every minute a revenue generating minute!

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