Straight-Up Facts On Canada's Mega Charity Lotteries

First-of-its kind report shows only 27% on average of mega lottery tickets support charitable programs

TORONTO, Nov. 15, 2013 /CNW/ - A new research report released today by Charity Intelligence Canada (Ci) shows that when Canadians buy charity lottery tickets, on average, only 27% of the ticket price funds charity programs. Instead, the majority of ticket sales pay for prizes, marketing and operating costs. The report examines the mega-million charity lotteries across Canada run by 30 charities.

The study reveals to Canadians that donating and buying charity lottery tickets are two distinctly different ways of supporting a charity, with very different cost structures. In the analysis of the 30 charities, in every case, it is more cost-efficient to make a charitable donation than to buy lottery tickets.

"Charity Intelligence's concern is that Canadians may be confused about charity lotteries. People may think that buying a lottery ticket and making a donation are the same thing," said Kate Bahen, Managing Director, Charity Intelligence Canada. "Charity Intelligence found a big difference. We were under the impression that many of the lottery prizes were donated and we underestimated the marketing costs. Our report lays out the differences, so Canadians can be better informed and make smarter giving decisions."

The Charity Intelligence report focuses on the "mega" charity lotteries - charity lotteries that sell more than a million dollars in ticket sales. The "mega" lotteries operated by 30 charities dominate the charity lottery market, selling $376 million in ticket sales in their latest year. This represents 50% of Canadian spending on charity lotteries.

"Charity Intelligence is not opposed to charity lotteries. Buying charity lottery tickets is fun, it's gambling, with alluring prizes. It just isn't intelligent giving," said Bahen. "A portion of the proceeds does go to "doing good" however, this report shows Canadians exactly how much of ticket sales actually supports charity programs. In some instances, it's a very small amount."

The study shows that making a donation and buying charity lottery tickets have very different economics. When donating to the charity, on average, 72% of the money goes to charitable programs. When buying a charity lottery ticket, it is almost the exact opposite; on average, 27% of the money goes to charitable programs.

Charity Intelligence's analysis finds that, on average, it is 2.7 times more cost-efficient to make a donation directly than it is to buy a charity lottery ticket. Put another way, if one wants $100 to go to a charitable program, one would need to donate $139, on average. For the same $100 to go to charity programs, one would need to buy $376 in charity lottery tickets.

The study also shows the wide diversity in charity lotteries. Some charity lotteries are "leaders" with more that 50% of ticket sales retained for charitable programs. For others, less than 15% is left over.

Charity Intelligence's report provides individual analysis on the mega charity lotteries operated by 30 charities, including: the Heart and Stroke Foundation, Princess Margaret Cancer Foundation, Canadian Cancer Society, VGH and UBC Hospital Foundation, Calgary Health Trust, SickKids Foundation, Canadian Red Cross, and Children's Wish lotteries. The full listing of the 30 charities operating mega lotteries, with individual analyses, will be available to read on Saturday, November 16th at 7.p.m. at www.charityintelligence.ca .

Quick Facts

▪ In 2011, provincial governments licensed 16,962 charity lotteries.
▪ Charity Intelligence estimates Canadians spend $750 million each year on charity lotteries. This is 5% of the $15 billion Charity Intelligence estimates Canadians support charities with each year.
▪ The 30 charities that operate mega lotteries sold $376 million in lottery tickets in 2012. This represents 50% of total Canadian spending on charity lottery tickets.

This report is made possible by the generous funding of Charity Intelligence's donors and volunteered time from research analysts.

About Charity Intelligence Canada

Charity Intelligence Canada (Ci) is a Canadian charity. Charity Intelligence seeks to help donors give intelligently by undertaking rigorous and independent research on Canadian charities. Charity Intelligence has reports on over 500 charities available on its website and reports on philanthropic sectors of giving like Canada's environment, cancer, and homelessness. Founded in 2007, today over 90,000 Canadians use Charity Intelligence's website as a go-to source for information on Canadian charities and have downloaded over 124,000 charity reports. Charity Intelligence aims to assist Canada's dynamic charitable sector to become more transparent, accountable and focused on results. Through sharing information and educating donors, Charity Intelligence seeks to empower giving and strengthen philanthropy in Canada.

SOURCE: Charity Intelligence Canada

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