4 Steps to Planning a Charity Raffle
Conducting a charity raffle may be a wonderful fundraiser for your non-profit organization. Especially if a generous supporter has donated raffle prizes such as real estate, a vehicle, or vacation package, the cause and work supported by your 501(c)(3) or 501(c)(4) non-profit organization could stand to benefit substantially from ticket sales and great publicity.
However, before you start making fliers and planning a gala event to feature the drawing of the raffle winner, you should investigate the particular state and federal laws that dictate rules on charity raffles. Each state has its own laws regarding raffles and the IRS could also be involved in certain circumstances.
Here are 4 simple steps you can take to plan a raffle event that will lead to successful fundraising for your organization:
1. Know Your State’s Laws. Each state defines a raffle a little differently. Find out your state's definition of a raffle by visiting the state's government website or calling city hall to look up the applicable definition of a raffle. Generally, raffles require selling raffle tickets or exchanging something of value to participate in a random drawing in which a grand prize is awarded. Can you sell raffle tickets online using a fundraising platform, or do you have to sell them at an in-person event? Can you provide incentives for local businesses and others to donate items? Is there a maximum ticket price that you can charge? These questions and others need to be answered before you move forward with a raffle fundraiser of any kind.
2. Check the state's raffle requirements. The majority of states allow non-profit organizations to conduct charity raffles, but there are a few that do not. Read your state's raffle laws to find out if a raffle is a possible fundraising event for your specific type of organization.
3. Apply for a raffle license or permit. Apply for a raffle license or permit in states that require it. The application may take weeks or months to be processed, so plan your charity raffle timeline accordingly. Many applications are available online, so check your state's government website or search online for the application.
4. Talk to an attorney. Raffle laws are complex and even a little quirky about what is allowed and what is prohibited. Once you have done the ground research and been approved for a raffle license, your next step may well be to speak to an attorney about your fundraising ideas, the legalities of how the raffle is organized, publicized, and how the money is collected and the raffle drawing itself. Also ask about the rules to make sure your organization is in compliance with its non-profit status (501(c)(3), etc.) requirements. The attorney will not only be able to guide you on how publicize the event to your target audience, use social media appropriately, and carry out the actual event, but will also be familiar with your organization and specific fundraising goals in case any issues come up along the way.
Planning a successful raffle as a non-profit fundraiser involves a number of requirements; However, by tackling the process step by step you set your non-profit up for continued fundraising success.
Related Resources:
- Charitable Contributions (FindLaw’s Learn About the Law)
- Nonprofit Basics (FindLaw’s Learn About the Law)
- Pros and Cons of Non-Profit 501(c)3 Incorporation (FindLaw's Law and Daily Life)
