Royal Columbian Hospital lottery loses $3 million

The Royal Columbian Hospital Foundation is out of the lottery business after suffering a $3 million loss on its B.C. Vacation Home lottery, said president and CEO Adrienne Bakker on Wednesday.

But despite the deficit, direct donations will not be used to cover the shortfall, she said. The money will come from revenue sources such as hospital parking and television rentals. The foundation will also be able to liquidate some funds from an income portfolio it has.

"It means rebuilding that reserve," she said. "Thankfully we have enough unrestricted funds in reserves to make up for the loss.

"We'll have to work even harder in the fund raising for the hospital. We have no intention in going into another lottery any time soon."

Donated dollars will still go toward the projects the contributions were intended for and although the lottery response was weak, direct giving to the hospital has increased, said Bakker. That money all goes to the foundation and its projects while a sold-out lottery generally generates 20 per cent on the dollar once all the costs are paid off, she estimated.

The foundation was caught off guard when only 44,000 of 120,000 $100 tickets were sold.

For 14 years, RCH and Surrey Memorial Hospital ran a joint lottery, but when it lost $300,000 in 2007, putting the foundation on the hook for half of it, and 11 lotteries on the market, the board decided the lottery business was not a prudent one to be.

But by 2010 it appeared the appetite for one had returned. Since the foundation was on sound footing, the board felt a lottery was something it needed to do to raise funds and awareness for the hospital, said Bakker. So RCHF hired a marketing firm to do research on which way to go.

What emerged was the concept of three vacation homes to be given away in Kelowna, Whistler and Parksville. Early bird prizes included 50 hours on a private jet.

"We tested the heck out of this," said Bakker.

Focus groups and surveys showed they liked the fresh idea over the older model of a big house in White Rock. They also preferred the homes be in B.C. instead of warm weather spots like Hawaii or Mexico. The marketing firm had never seen such high marks when doing its surveys, said Bakker. "It was a bit shocking to all of us."

The RCHF lottery also had some stiff competition with five other charities running home lotteries this year.

"It's an interesting situation," said Bakker. "We don't know exactly when we launch when the others are going to launch. Unfortunately it is a competitive situation."

Instead of gambling on the lottery business, the foundation will concentrate on its upcoming direct mail campaign, planned giving and events such as its fundraising gala next March. Other community organizations also put on events with the proceeds being donated to RCHF.

Its latest campaign is for a multi-purpose interventional suite to take care of cardiac and neurological procedures. Bakker said the suite's addition would help reduce wait lists for people needing pacemakers, angiograms, stents and other surgeries.

The foundation will also be gearing up to celebrate the the 150th birthday of the hospital, the first in the province, in 2012. In addition, Bakker feels there's still work to be done in raising awareness of RCH's importance to not only New Westminster, but to Fraser Health. It is one of two Level 1 trauma hospitals in the province and has regional cardiac, neurological and neo-natal centres.

"We still have a ways to go in developing that profile," said Bakker.

The response to the news of the lottery's deficit after it went public Wednesday was a bright spot for Bakker. She said the foundation received many Twitter and website comment messages from people asking how they can help because they still support the foundation and have respect for how it is managed.

"That kind of stuff is giving me a great sense of optimism," said Bakker. "It was heartwarming and humbling. We don't take that kind of support lightly. It was a nice shot in the arm to hear those things.

"We have not experienced this before, but we will be fine."

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