MDHTALK - Article: Club Auctions, Drawings, and Raffle by Lee Wiese

Club Auctions, Drawings and Raffles
by Lee Wiese

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There are three types of club activities that normally take place at any general meeting or competition hunt. These activities are auctions, drawings, and raffles and they may have many variations. This article will review in some depth each of these activities and who is qualified to participate.

The table below provides a visual description of what will be covered in the article. On the left side of the table are three categories (auctions, drawings, raffles) with various different types of activities within each of the categories. Listed across the top of the table are the event types (general meeting, competition hunt) and who should be allow to participant (visitors, members, public) in the activities. Take some time before reading the article and study the table, it provides a very good pictorial of the article.

Auctions. An auction is the sale of merchandise sold to the highest bidder. The items auctioned may or may not have a minimum bid requirement. A minimum bid is where the auction price must go above a set amount before there can be a winning bidder.

Club auctions are usually for a very specific prize and the prize is usually funded by the club. The club should not have an expectation of getting the full purchase value of the merchandise back from this type of auction. This auction is usually a club good will auction for its members and is normally for hobby related merchandise such as a metal detector purchased from the club's treasury funds. Generally, this type of activity is only available to the club's membership since the funds in the club treasury are the result of membership dues and other club activities.

Another type of club auction may be for a fund raiser used to increase the club's treasury. This type of auction can have a large variety of auction items that may be non-related hobby merchandise. It would be hoped that in this type of auction many of the items would be donated by club members and local retailers. A fund raiser auction should be open to visitors, club members and the general public. Before holding this type of auction there should be a major drive to get the public's attention and their participation in the auction. The greater the participation the greater the financial gain from the auction.

Drawings. Club drawings are usually held for very nice club funded prizes or in some cases the item may be donated. The prizes can vary from a silver coin to a very expensive item like a metal detector or other hobby related gear.

Membership drawings are usually held at the club's general meeting and are a good ice breaker for starting the meeting. Everyone likes a chance to win something. The typical prize for a membership drawing is a silver coin. The coin denomination will depend on the club's size and allocated funds for the activity. For fairness, the prize should always be consistent from meeting to meeting in denomination and valve.

One very important component at any club meeting is the visiting public. Shortly after the start of the meeting there should be a visitors introduction period and a visitors drawing. Each visitor attending the meeting should sign-in and at sign-in time a ticket be awarded to the visitor for the visitors only drawing. This special drawing can be a great catalysis for bringing new members into the club as this drawing provides the visitor a chance to win something at their first visit and may be an incentive to join. Always remember to provide recognition to visitors.

Another drawing activity may be for a specific prize which can be a nice and sometimes expensive item like a metal detector. This type of drawing is usually funded by the club and may not require any of the participants to buy tickets. In this type of drawing activity only the club's membership are participants. This activity can be held at special monthly meetings and competition hunts. Each member should be awarded one ticket for the drawing.

Show and Tell Drawings are for rewarding the members who choose to discuss their previous months finds with the members. This drawing can take many forms with drawing prizes for the top finds in a number of different categories or the drawing may be just for anyone that participates in the activity. Funds for this drawing comes from the club's treasury and only club members should be allow to participant.

Raffles. Club raffles are like a lottery, tickets are sold and the prizes can be merchandize, silver coins, silver bullion (rounds or bars), and gold coins / nuggets. Raffles are a major activity in most all metal detecting and prospecting club general meetings. Raffles can also be a major activity at a club's competition hunt or other club sponsored activity.

Before getting into the different raffle activities a discussion on raffled coin prizes is in order.

Coins. Coins for a raffle can be silver, gold and new clad coins, however silver coins are most often used.

Professionally Grade Coin (PGC). PGC graded coins are worth more and will result in costing the club more to purchase. Given that the coin cost is higher there will be fewer coins available for the raffle but the quality or grade of these coins can be very high.

Dealer Graded Coins are coins that usually have been graded by the dealer who is selling the coin or graded by someone that sold the coin to the dealer. In this case the coin will be of higher valve than spot market metal priced coins but less them a PCG graded coin. Keep in mind that the dealer must make a profit on any coin they sell and therefore there may be a conflict of interest with the coin grading process. (dealer graded could be graded higher than the coin deserves which increases the coin cost)

Coins Valued at Scrap Metal Spot Price. Silver and Gold coins that do not have a numismatic value other that the value of the coin's metal content are a good choice for raffles. This type of coin will provide for many more raffle prizes.

Bullion can also be used as a prize for club raffles. Many clubs offer silver rounds and bars as raffle prizes and occasionally a gold nugget. Bullion is usually priced at spot market metal price.

Next the article will center around a number of issues which need to be explored associated with any coin raffle; coin grade, how much to spend, raffle drawing sequence and the process of drawing the winning ticket.

The coin grade of raffled coins is extremely important because the coin grade will have an impact on the number of participants. Using just PGC grade coins for a raffle will limit the number of coins available for the raffle, the result will probably be far fewer number of participants in the raffle and dollars spend on raffle tickets. Club members want to get something for their ticket purchases; by only having high quality coins (PGC - coin) limits the opportunity to win. The result is there will be less incentive to purchase raffle tickets or a large number of raffle tickets purchased by the participants.

Using dealer graded coins will result in lower quality coins. But this will also lower the cost per raffled coin providing for more coins being available and a greater chance to have a winning ticket. Thus, these coins increase the incentive to purchase more raffle tickets.

Finally there are scarp metal spot price coins, this type of coin offers the maximum amount of coins for a raffle since the cost is the lowest for the three types of coins. These coins will provide a much higher incentive to purchase raffle tickets since the chance to have a winning ticket is greater. Keep in mind these coins are usually lower quality, however by picking through a dealers coin bin you may find some very nice coins. Or the club can purchase this type of coin from the membership.

I have seen clubs go with the lowest grade of coin for 90% of the raffled coins and sell many raffle tickets the result being very high membership participation. On the opposite side, I have also seen clubs that use dealer grade coins with very low participation. The club's officers can monitor the membership participation by tracking the number of members that do not stay for the club raffle and leave during the mid-meeting break.

Club coin raffles usually take place at the end of the club's general meeting. A major reason for this is to keep the membership involved in the club's activities until the meeting is adjourned. However, the management and definition of the coin raffle will impact the number of members that decide to leave at the mid-meeting break.

The ideal raffle mix (definition) is to have one high grade silver coin, a number of silver rounds / bars and at least one gold coin or nugget with the remaining coins selected from spot market price coins. I would use the 80 /20 rule. With 20% of the raffle value in a gold coin / nugget and / or silver rounds and bars. The remaining 80% in standard un-graded silver coins valued at the market spot price. This raffle activity should only be available to the club's membership.

A process recommended to for a coin raffle is to set a dollar threshold for the top prizes and draw those tickets first in order of prize value and place the tickets beneath the prize. These high valued prize tickets will be announced last in order of value with the highest value prize ticket announced last. The suggestion is to put all grade coins in this category plus all silver rounds / bars and any gold coin or nugget. The remaining coins should be raffle one at a time with the ticket drawn just before the winning ticket number is announced. The next raffle ticket should be drawn by the previous winning ticket holder.

Raffle winner should walk up and retrieve their raffle prize and introduce themselves to the membership and describe their prize. This process is important when the club is gaining new members, since this is a very
important way for new and old members to get to know each other. This technique should be practice for all types of raffles, auctions and drawings.

Finally, what to spend on a coin raffle? The amount to spend on a coin raffle should be determined by how much revenue was gained from the previous months coin raffle. Never spend more then what is available from the previous month's raffle. If the club follows this rule no funds will ever be required from the club's treasury except for the initial dollar outlay for the first coin raffle.

50 /50 raffles are a good way for the club to have a small fund raiser at each meeting. A club member who has purchased the winning ticket will easily get their purchase money back plus much more. Raffles of their type should be open to members and visitors. There may be variation on this type of raffle i.e.: 50/25/25 raffle, 25/25/25/25 raffle, etc.

Specific Prize Raffle is a type of raffle that should be used for a very high value prize such as a metal detector. This type of raffle should be well planned with sales of tickets spread out over at least a three month period prior to the raffle. Tickets should also be sold to the public by the club's membership and the winning ticket holder need not be present to win. This type of raffle should be used as a fund raiser, keeping in mind that the membership must support this type of raffle by selling and buying tickets.

Raffles on the Fly are usually held between multiple competition hunts. This is where a raffle is held during the waiting period before the start of a competition hunt. Someone will usually go though the crowd of detectorist selling tickets for a nice prize such as a gold coin, a larger silver round or a silver bar. This type of raffle usually has a limited number of tickets since the event sells just enough tickets to make a small profit . By keeping the number of tickets sold to a small number provides an incentive for participants to purchase tickets.

Summary. Auctions, drawings and raffles are an important part of any club's meeting and competition hunt. These type of activities generate interest in the club and in some cases provide additional funds for the club's operations. By using the table as a guide in this article you will be consistent in your application of auctions, drawings, raffles in your club and it should generate the highest participation possible.