The Royal Columbian Hospital Foundation's B.C. Vacation Home Lottery has lost the charity millions of dollars after not enough tickets were bought to cover costs.
"We fulfilled all our obligations for the lottery. We've paid out all our prizes and paid all our bills related to advertising and marketing that we've done," said foundation president Adrienne Bakker. "That's all taken care of, but in the end, there's $3 million that we've had to borrow from our reserves."
The foundation had hoped to sell 120,000 tickets at $100 a piece for a chance to win $3.2 million in prizes including vacation homes in Kelowna, Whistler and Parksville, but only about 44,000 of the tickets sold.
Bakker said ticket sales early in the spring were slower than hoped for, but the sizable loss comes as a total shock because the foundation had put a year of research into a possible lottery. Surveys, market research and focus groups all seemed to suggest the lottery would be a hit.
"We had tested this thing every which way but Sunday before we even decided to go forward with it and we were getting such high scores on the surveys that had been done by the market research firm, it looked like there was no way it wasn't going to make money, so it is a huge shock to everybody," she said. "We certainly wouldn't have gone into it if we didn't think we were going to make money."
Bakker said there are a number of possible reasons so few people wanted to buy tickets to the lottery, including competition with other better-established charitable lotteries that did turn profits, but ultimately, she said, people didn't respond to the idea of a vacation home prize.
"To put it simply, we had a product we thought the public would support, and the public didn't support it to the level we anticipated," she said.
Bakker said she will "never say never," but the foundation board won't be looking at doing another lottery anytime soon.
To recoup losses, the foundation will have dip into reserves and sell off some of its investment portfolio. None of the funds used for the shortfall will be coming from donors who gave money for specific projects, but other projects and equipment on the hospital's wish list may have to wait as a result, Bakker said.
The foundation's total revenue from donations and earned income for the 2010-11 fiscal year was $3.6 million.
Bakker said she hopes the lottery loss will help highlight RCH's need for better funding from the provincial government. The hospital takes the some of most serious trauma, cardiac, neuroscience and neo-natal patients in B.C. but overcrowding at has been endemic in the last 10 years, Bakker said. In March, Fraser Health and the province drew criticism when the dining area of the hospital's Tim Hortons was used to treat patients when the emergency room was overflowing.
"I'm hoping the province will see this and say, 'Here's a foundation doing whatever it can to raise money for this hospital, which is long overdue for an expansion.' We need them to come to the table and look at the significant investment that the hospital needs to meet its mandate as a trauma centre," she said. "We've got 65,000 people in our emergency room every year - an emergency room that was built for 40,000."
Bakker said some major donors have already contacted the foundation to offer support and pledged to continue their generosity.
"We've had some tweets and some messages on website as well, saying 'Royal Columbian needs our help, what can we do to raise some money?' So that's a wonderful shot in the arm to know people are feeling that way," she said.
With files from The Vancouver Sun