I was listening to one of my local public radio stations recently, and heard an announcement for a raffle — accompanied by an assurance that I need not donate to win. Huh? That sounds like a lousy way to raise money. Doesn’t a raffle ordinarily mean that you and others buy tickets, and the collective amount raised not only covers the valuable prize in question, but results in a profit to whoever runs the raffle?
Then I remembered: California law contains some unusual provisions governing raffles. In essence, they’re illegal unless run by a nonprofit, and even if they are run by a nonprofit, the organization must either:
- register the raffle with the state and comply with a bunch of difficult provisions, such as not conducting the raffle over the Internet, arranging for supervision by an adult, and ensuring that 90% of the gross receipts go toward benefiting or supporting beneficial or charitable purposes, or else
- offer tickets for free.
No wonder said radio station decided on the latter approach — though I bet they’re hoping not many people take them up on it. If your nonprofit is in California and thinking of running a raffle, you can find more information on the “Raffles” page of the state’s website.
If your nonprofit is in some other state, this particular rule probably does not apply — but others will, if raffles are legal there at all. Check for a similar source of information from your state or consult an attorney well-versed in nonprofit law.