And the winner is ... nobody
Photo of Phoenix raffle house by Baltimore Sun photographer Amy Davis
The contest organized to raffle off a $1.6 million house in Baltimore County sounded good to some people -- enough to sell 12,000 tickets at $100 a pop. But organizers needed about 20,000 ticket sales to make it worthwhile, and they were hoping for 35,000.
So: no raffle.
Steve Scarborough told me that he got a refund for the two tickets he bought, but "they kept $5.96 per ticket."
"I suppose that could add up to a tidy profit for them even if they only sold half of the 35,000 tickets," he wrote in an email. "I may want to look into an opportunity like this."
Now, the charity organizing this event warned in advance that the raffle would be canceled if too few tickets were sold, and it said it would keep a 1 percent processing charge if that happened. But 1 percent of $100 is $1, not $5.96. I checked in with the builder of the house, who partnered with the nonprofit Universal Peacemakers Foundation, to find out what was what.
Alan Klatsky, president of Prestige Development Inc., said the extra money didn't go to the charity. It went to Wall Street.
“The credit card companies who processed the charges (remember there were several) have their own charge which is passed on," he said through a spokeswoman.
UPDATE -- I chatted with the charity that organized the raffle, and here's what it says:
Bob Brantley, president of the Universal Peacemakers Foundation in Upperco, said one of the online credit-card processors he used charged a refund fee. It's not a fee he was passing along -- the processor held the ticket money until the event was canceled, and then sent it back to the ticket buyers with a bite, he said. "We'll do our very best" to reimburse ticket buyers who prove that they didn't get their full $100 back, he said.
Because Universal Peacemakers didn’t exercise its option to keep $1 of each ticket sold as a processing fee, "we got no funds at all out of this," Brantley added. Instead, the raffle turned out to be a money-losing proposition for the small nonprofit -- though how much won't be clear until he sees how many people want their credit-card fee refunded.
"We'll cover it somehow," he said. "We don't want anyone to feel like they were mistreated."
(So far, most of the ticket buyers who contacted him about the fee have decided not to ask the nonprofit to pony up out of its general funds.)
The raffle, originally scheduled for last fall, was pushed off until February to give people more time to buy tickets. But that wasn't time enough.
"The economy's pretty rough," Brantley said. "That was a major factor."
Food Link, for example, canceled a 2008 raffle fundraiser for an Anne Arundel County house. Executive Director Cathy Holstrom told my colleague Lorraine Mirabella that "it's a lot more complicated than it sounds. We actually lost a lost of money."
So what happens to the 6,200-square-foot mansion in Phoenix with "a huge center hall, gourmet kitchen, walnut floors, 16-foot ceilings and a his and hers marble bath in the first-floor master suite"?
Klatsky is opting for the route many home sellers take: He's putting it on the market in the spring.
"A second model home is also planned for this summer as well," he said.