Ocean Institute Plays the Odds With Home Raffle Experts

Susan and Greg Goggin, with Dan Stetson, right, president and chief executive of Ocean Institute. With the launch of the Ocean Institute's 2009 Laguna Beach Million Dollar Home raffle last week, those willing to fork over $150 for a ticket will have a one in 22,000 chance of winning their choice of a $1 million home with an ocean view or the equivalent in cash, assuming all tickets are sold.

Is there a catch?

Unlike a raffle for, say, a flat screen television with a ribbon around it waiting to be awarded to the winning ticket holder no matter how many tickets are sold, raffles for high stakes are usually contingent upon the sale of enough tickets to pay for the grand prize.

The Ocean Institute's home raffle is no different. Their rules state clearly that at least 15,000 raffle tickets must be sold by the ticket purchase deadline in order for the grand prize to be awarded. If ticket sales fall short, the grand prize winner will instead be awarded a cash prize equal to 50 percent of net raffle proceeds.

So far, in each of the last five years, the annual fundraising raffle held by Dana Point's Ocean Institute has awarded the advertised prizes.

Even so, the institute's first raffle in 2005 lacked momentum, and president Dan Stetson turned to GCA Santa Barbara for advice. The marketing firm run by Greg and Susan Goggin had introduced the Santa Barbara Million Dollar Home Raffle in 2004, among the first in California to take advantage of a new law allowing non-profits to raise funds through such a raffle, and it was a huge success.

Goggin admitted to being "terrified" of the risks involved when they ran that maiden raffle, but since benefited a nonprofit that was a favorite of his mother-inlaw, he said there "was plenty of motivation to employ every marketing and development resource we possessed as an agency." And it paid off.

Thanks to the pointers Goggin offered Stetson in 2005, in the end the institute raffle netted $324,986, according to institute filings with the state attorney general. After Goggin was hired to organize future events, "the raffle became much more successful," Stetson said. The institute sold almost all available tickets in 2006, netting $824,545, and the next year sold out and netted $971,342, according to a 2007 tax return. Last fall, despite the already faltering economy, they sold out again, selling all 20,000 tickets early, and netted more than $1 million, according to Stetson.

Not every raffle fares so well. The American Institute of Philanthropy, a Chicago-based charity watchdog, warns that raffles can be used to mislead consumers. And the recent popularity of home raffles as a fundraising tool prompted the Association of Fundraising Professionals to caution nonprofits to consider all of the expenses involved, as well as the risk of not selling enough tickets, before jumping in. In a December article, the industry group pointed out that failure puts the nonprofit's reputation at risk if they are associated with a fiasco. But, if the raffle is done legally and marketed well, "it can certainly be a win-win," said a spokesperson.

Marketing a home in a coveted location that taps into people's dreams is the key, according to Goggin. "We have this little model that works," he said. Changing the location to Laguna Beach was the first change from 2005, which offered a home in San Clemente as the raffle prize.

Goggin immediately saw that a home in Laguna Beach, with its high name recognition, would make raffle ticket sales much easier.

Community support and goodwill are also paramount, insisted Goggin. "It's really become a community event, and that's what it needs to be," he said, adding that his mission is not just to create a successful raffle, but also to raise the institute's public image.

"The raffle has been a great vehicle to raise awareness and to build a tremendous community partnership," said Stetson, who explained that GCA works year-round on promotion, development and strategic planning. Goggin was paid $141,719 for his services in 2007, according to institute tax records.

Stetson believes that it's money well spent. The raffle helps the institute stand "on our own two feet" financially, especially in tough economic times, he said.

Their primary visitors are children from public schools. Last year about 115,000 children attended their programs, including an overnight experience for fourth and fifth graders on their tall ship Pilgrim that Stetson described as a "rite of passage." Many Laguna Beach students endure the rigors of standing watch on its deck.

"We love the people and we love the mission," said Goggin, who was intoxicated by Laguna Beach while looking at potential homes for the raffle and who relocated a year ago. "Santa Barbara can be a little slow," he said. "There is more energy here." Their daughter attended eighth grade at Thurston last year and will be a freshman at the high school this fall.

If Goggin is again successful, this year's raffle could gross about $3.3 million and net the institute $1.2 million after costs for prizes and marketing. Because of the recession, he suggested doubling the number of smaller prizes this year to give people a greater chance of winning, and added a locals page offering ticket holders various discounts at local businesses.

In its first week, Goggin says sales are ahead of last year.

In addition to the grand prize, there will be nearly 400 cash and merchandise prizes, including three bonus drawings for multiple ticket purchasers.