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Raffle laws

How to Run a Raffle in California: Laws and Tips (2024)

February 29, 2024

Running a raffle in California is more restrictive and a bit more complicated than in other states, but you can still find success by adding one to your event or holding one by itself. California's laws limit raffles to eligible organizations with tax-exempt status and require nonprofits to file forms before conducting the raffle. In this article, we'll make running a raffle in California simple and easy to understand.

California Raffle Laws: Are Raffles Legal in California?

Only eligible organizations can conduct raffles in California. Nonprofit religious organizations, schools, colleges, and hospitals can run a fundraising raffle without registering with the state, but all other nonprofit organizations must register with the Registry of Charities and Fundraisers.

When planning a nonprofit raffle or any type of drawing, organizations must understand whether they're holding a raffle or drawing. Your event must follow all the following to qualify as a drawing under California law.

California law also requires that at least 90 percent of the gross income received must benefit the nonprofit and be used for charitable purposes. In 2015, California passed a law allowing 50/50 raffles during major league sports home games for nonprofits. Fifty percent of this raffle type must go to the organization for charitable purposes, while the other half can go to the raffle winner.

The Bureau of Gambling Control regulates 50/50 raffles at major league games and has separate rules and step-by-step directions.

Other California raffle rules and regulations include:

10 Steps to Run a Legal Raffle in California

To run a legal raffle in California, nonprofits must have tax-exempt status and be qualified to conduct business for a year in the state. Nonprofits must complete a required registration form and file annual raffle reporting requirements with the attorney general's office. Nonprofits cannot conduct raffles or sell raffle tickets online, but they can promote the raffle and track paper tickets with online tools like Zeffy.

Do You Have To Be an Eligible Tax Exempt Organization?

California allows all eligible organizations to hold fundraising raffles. According to penal code section 320.5, eligible organizations are private nonprofit organizations qualified to conduct business in the state for at least one year. Organizations must also be exempt from state taxation under the sections:

If the organization is not currently exempt under one of these subsections, it can apply for exemption from the franchise tax board.

Nonprofits must also be in good standing with the Attorney General's office and Raffle Registration Registry. Before deciding to hold a raffle in California, it's best to check your account status using the Registry Search Tool.

California nonprofits must use employees and volunteers when conducting the raffle. Third-party organizations and outside vendors cannot hold raffles, even to benefit a tax-exempt organization.

Fill out the Raffle Annual Registration Form

Before conducting the raffle, you must fill out a registration application at least 60 days before your event date. Nonprofits must fill out form CT-NRP-1 and pay a $30 registration fee. Raffle registration in California starts on Jan 1st and ends on December 31st, but you can send in the form anytime after October 1st for the following registration year.

Registration applications must include:

You will not receive a confirmation letter that your form was received, so requesting a "certified receipt" at the U.S. Post Office is essential.

Form a Raffle Committee

After registering to hold a fundraising raffle, it is best to form a committee to help run your raffle. Raffle committees are an excellent opportunity for nonprofits and supporters. Organizations can build relationships with committee members, and volunteers have the chance to use personal and professional connections to help their favorite charity.

Invite volunteers to the first raffle committee meeting immediately and ask them to help plan the event, collect prizes, and market your raffle. If needed, you can split the committee into separate committee groups to cover all aspects of your event.

Plan Raffle Event

Are you adding a raffle to a pre-existing fundraising event, or do you plan to host a separate raffle? Raffles can be an excellent way to reach a larger audience and find new donors for your nonprofit. When planning a fundraising raffle, you must understand your audience and what types of prizes may bring in the most revenue. Look at other nonprofit organization raffles to see what they've offered, and conduct surveys with your donor base.

Choose Raffle Prizes

It's critical to find exciting raffle prizes right away. This is where your raffle or event committee can shine. Each committee member has their own personal and professional contacts. During your first committee meeting, you should give them an idea of what type of prizes to find and let them do the heavy lifting.

Design and Print Raffle Tickets

Unfortunately, California does not allow nonprofits to hold raffles or sell tickets online. Organizations must provide attendees with a paper ticket with a detachable coupon or stub. The ticket must include a unique, matching number on each section.

Zeffy has several free Zeffy tools to help you sell paper tickets, including:

Printed Raffle Tickets by Zeffy

How to make raffle tickets in 4 easy ways

Increase Raffle Ticket Sales

While California doesn't allow nonprofits to hold raffles or sell raffle tickets over the internet, organizations can advertise the raffle online with:

Be sure to market raffle activities via flyers and posters, postcards or appeal letters, social media posts, and emails.

Conduct Your Raffle

Trust is essential for nonprofits, especially during fundraising raffles, so clarify how the raffle will be run before, during, and after the event. When conducting the raffle, California requires nonprofits to have someone over 18 to pull tickets and oversee the event. Schools can use student volunteers, but a teacher or parent must run the event.

Thank Raffle Attendees

Raffles are an excellent way to find new donors. Make sure to collect and add your raffle attendee's name, address, phone number, and email address from the paper ticket purchased to your donor management system.

After the fundraising raffle, sending a thank you letter or postcard for their purchase is essential. You'll also want to send personalized communication throughout the year to share how their ticket sale revenue helped the organization and its beneficiaries.

Fill out and Submit Your Nonprofit Raffle Report

Your fundraising raffle doesn't end here. California requires nonprofits to complete and submit a Nonprofit Raffle Report CT-NRP-2 for all raffles held during the registration year. This form must be completed and sent to the Department of Justice by February 1st of the following year. If you registered to host a raffle, you must fill out this form regardless of whether you held the raffle or not.

Reporting requirements include:

The completed raffle form will be available to the public on the Attorney General's website. Failing to file raffle reports can result in California not renewing your organization's registration even if you didn't hold the raffle. Misuse of charitable assets and fraudulent fundraising practices can result in legal actions by the Charitable Trusts section of California's Attorney General’s office.

How Streets Are For Everyone (SAFE) Raised over $5,000 with a Holiday Raffle

SAFE fundraising raffle with Zeffy

Most nonprofits rely on mailed appeal letters, emails, and social media posts to solicit funds for their year-end campaigns. Streets Are for Everyone (SAFE) decided to increase participation last year with a raffle.

Their year-end campaign, starting on Giving Tuesday, allowed supporters to purchase one or three raffle entries to win a staycation at the Westin Hotel, tickets to Knotts Berry Farm or Monica Pier Pacific Park, a two-month Curves membership, or VIP passes for The Broad.

While they didn't hit their $10,000 goal, the raffle helped them raise a significant chunk! With Zeffy's online tools, SAFE has raised $8,271 and saved $431 in fees.

Start Your Raffle in California with Zeffy for Free

With limited work, raffle ticket sales can increase your nonprofit organization's event and campaign revenue. California raffle requirements are more restrictive than those of most states, but the benefits of conducting a raffle far outweigh the costs. Finding someone to provide legal advice and help you follow California's revenue and taxation code can help eliminate any issues that may stand in your way.

While California does not allow nonprofits to conduct raffles online, you can use Zeffy's free fundraising and donor management tools to encourage more participation in your fundraising raffle and increase your organization's revenue.

California Raffle FAQ

Are raffles legal in California?

Yes, nonprofit religious organizations, schools, colleges, hospitals, and private nonprofit organizations with state tax-exempt status can hold fundraising raffles in California. Check with the franchise tax board.

Are 50/50 raffles legal in California?

In 2015, a California state law passed allowing 50/50 nonprofit fundraising raffles during major league sports home games. Fifty percent of the gross revenue must go to the organization, while the other half can go to the raffle winner.

Can you sell raffle tickets online in California?

California law does not allow nonprofits to hold raffles online or sell raffle tickets via the internet, but you can promote your raffle with:

Can schools hold raffles in California?

Yes, schools, colleges, religious organizations, and hospitals can hold raffles without registering with the California Attorney General's office.

Is it legal to raffle a car in California?

No third-party company other than the eligible nonprofit can benefit from raffles in California. Charitable assets, like a car, can be used as raffle prizes if given as voluntary donations.

Can you raffle alcohol in California?

You cannot raffle alcoholic beverages without a liquor license. Obtain a liquor license through the California State Board of Equalization.

What is the legal difference between a raffle and a drawing?

A raffle is a lottery in which people purchase tickets to win prizes. Drawings can't require a fee to win prizes. Other requirements for drawings include:

Are raffle winnings taxable in California?

California does not have a specific tax on raffle winnings, but they must be included in your state taxes as ordinary income. The IRS also requires nonprofits to withhold 25 percent of the winnings and report this amount on IRS Form W-2G.