Institute of Fundraising: Take insurance to prevent costly mishaps occurring

How do I run a competition and offer a high-value prize but ensure the event doesn't lose money? You could consider insuring the event so that the cost of the prize is covered by an insurer.

For instance, if you organised a roll-a-dice competition and offered, for example, a luxury holiday as a prize, then for a relatively small premium compared to the cost of the prize, the insurer would cover the cost of the holiday in the event that it is won. The reason that the premium is relatively small is that the chance of somebody rolling all sixes, out of six or seven dice, is very low.

You could also consider asking a local business to sponsor the prize.

They would benefit from the sponsorship through advertising and local press coverage in the event that the prize is won. They could either donate the prize or you could ask them to cover the cost of the insurance premium.

This means that the insurance company would pay for the holiday in the event that it is won, so the cost to the sponsoring company is reduced.

This method works for other competitions where the likelihood of the prize actually being won is low and the value of the prize is high. Examples include guessing a mystery number plate on a new car, or hole-in-one prizes at charity golf tournaments.

How do I research a company that wants to do some fundraising work for my organisation? A sensible course of action would be to ask for some references from other organisations that the company has worked with.

It would also make sense to check out the details that the organisation gives you, for example, phone the telephone numbers and look over the website.

Warning signs that an organisation might not be reputable include ignorance of charity law or badly planned fundraising proposals that do not constitute good practice. Membership of the Institute, either by an individual or by an organisation, means that members agree to abide by the Codes of Fundraising Practice and should indicate a reputable firm.

If the organisation is engaging in fraudulent practice, then it may have already attracted the attention of the Charity Commission, which you can check.

Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Already registered?
Sign in

Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus