Fundraising question...

[silvertrombone]

I was chatting with a friend regarding a fundraiser that I've heard of in the DC community. Anyone had any experience with this?

Sell 100 tickets for $1,000, give away a pickup truck or some such.

It would be for something outside of drum corps. Thanks for input.

[kickhaltsforlife]

for my theater program we sold 5 dollar raffle tickets for a truck that was donated for us... we made like 5000 off of it, it was a great fundraiser. It may be illegal in some places, but most places don't care. It's illegal where i live and no one asked any questions (we even went door to door)

[Kasspa]

I run a charity event down here... but it runs the same as a fund raiser pretty much...

We put on a music festival at the end of every year and in exchange for entry we get people to donate toys and food stuffs, the goods donated go to toward people in the local community that can’t afford anything special at that time of year...

In return for donations, we hand out numbered tickets and at the end of the night there are a few give always of items donated by local businesses... iPods, phones, gift cards etc

But turning that into a fund raising idea, it works really well.. You will find that if you approach local businesses, they can’t always help with money but they can normally donate services and goods that you can use in raffles or as donation incentives.

Edited October 12, 2008 by Kasspa

[TerriTroop]

I don't have personal experience, but I was on the board of a non profit choral organization that had done this a few times. It was a Mercedes and a trip to Germany. The car and the trip were partially donated and members of the organization had to sell enough tickets to make up for the rest of the cost plus profit. Obviously the limited number of tickets is a bonus. I think the tickets were $500 each and I don't recall how many we sold but I think it was 200.

[Peel Paint]

In this economic climate, it may (or may not) be easier to sell 1000 raffle tickets for $100 than to sell 100 tickets for $1000, with the same prize.

Besides cars, raffles have been held for prizes like homes, and vacations.

The Cavaliers have a raffle every year, but they do it with cash prizes. Personally, I don't like buying expensive raffle tickets. For a few bucks, sure, why not?, but I wouldn't buy a $1000 raffle ticket or probably even a $100 ticket even if I was going to be donating that much. Raffle ticket purchases are not tax deductible, legally, though I'm sure many people claim them as deductions and hope they don't get audited and asked to produce proof of donation, and other people don't take tax donations and don't care about them, so you can reach a different fundraising audience with raffles. But if I'm donating, I want the tax letter, and prefer not to mix donations with gambling.

[SkyRyder_FMM]

In this economic climate, it may (or may not) be easier to sell 1000 raffle tickets for $100 than to sell 100 tickets for $1000, with the same prize.

Besides cars, raffles have been held for prizes like homes, and vacations.

The Cavaliers have a raffle every year, but they do it with cash prizes. Personally, I don't like buying expensive raffle tickets. For a few bucks, sure, why not?, but I wouldn't buy a $1000 raffle ticket or probably even a $100 ticket even if I was going to be donating that much. Raffle ticket purchases are not tax deductible, legally, though I'm sure many people claim them as deductions and hope they don't get audited and asked to produce proof of donation, and other people don't take tax donations and don't care about them, so you can reach a different fundraising audience with raffles. But if I'm donating, I want the tax letter, and prefer not to mix donations with gambling.

Based on the new IRS requirements, you must have proof of a donation from a non-profit to claim it as a charitable deduction (i.e., donation receipt, etc.). You cannot give a donation receipt for the purchase of a raffle ticket.

To the OP, you need to check with the laws in the state where the raffle will be held. You will need to register the raffle and obtaina license to conduct it. There will likely be a nominal registration fee, and there will be paperwork involved at registration and the conclusion of the raffle. You will also have to worry about IRS reporting and withholding requirements depending on the size of the prize. Some states have limits on the amount the ticket price can be (many are $100). Raffles can be a good source of revenue, but it depends on the prize and the target market. For larger prizes, a limited number of tickets works best. It also limits the fundraising potential of the event.

[Peel Paint]

Based on the new IRS requirements, you must have proof of a donation from a non-profit to claim it as a charitable deduction (i.e., donation receipt, etc.). You cannot give a donation receipt for the purchase of a raffle ticket.

I understand that, of course. That's why I said I don't buy expensive tickets. However, many people do buy them and take the deduction illegally, hoping they won't be asked to produce the tax deduction letter they will not have because it was a raffle ticket purchase. If the IRS doesn't ask for the tax receipt letter from the charity by following up on the return, the raffle-ticket buyer who improperly takes a deduction will get away with it.

[DCIHasBeen]

Cadets tried this with a BMW some years back ... They didn't get enough takers and cancelled it before the drawing.

Neat idea, but you have to be dealing with a lot of seriously cashed-up folks.

[Peel Paint]

...and if OP is asking about running or the friend running a fundraising raffle, I would highly recommend getting an attorney to look at the plans and make sure all the T's are crossed. You don't necessarily have to pay legal fees for this, if there's an attorney on the board of or that volunteers for the charity, but you definitely don't want to get tagged by your state attorney general or by state or federal tax agencies for doing it wrong, and that does happen. Sometimes, when an illegal raffle has been run, the charity has to give all the raffle-ticket purchase money back and pay penalties as well, and the bad publicity hurts future fundraising. If people run a raffle or lottery that is not entirely for the direct benefit of a bona fide charity, it's usually considered fraud or illegal gambling, and there can be jail time involved.

[jonnyboy]

My local hospital has been doing this with great success for ten years now. Every spring they make arrangements with a car dealer for a purchase. Approximately April they sign the contract. Every weekend they sell tickets at an event, tickets are $50. Approximately July 1st the payment for the car is due....IN FULL. They have to sell enough to cover the cost (500 or so at $50 is $25,000). They continue to sell tickets every weekend until about Oct 1st. Winning ticket is drawn in public by a local accounting firm.

The car is NOT donated, but is sold at cost. The car sits at the dealership, and the folks at the dealership do sell tickets during the week. The volunteers get the car on the weekend and drive to an event, usualy a fair, golf club function or some big local event. They do cap the amount of tickets they sell, I think at 1000 or 1500. So if you sell 1000 tickets at $50 that is $50,000. If the car costs half that, you can make a good profit.

Higher cost tickets are hard to sell. $100 or more is almost impossible, but $50 seems to work in my area. Some people even go in together (my sister and I have done 25 each). They have chanced off Mustang, Chargers and Pickup trucks in the last few years and always almost sell the max, but sometimes they fall short.

I purposely picked the guys brain on this because I thought it would be a great fund raiser for a corps, but you need dedicated volunteers to sell those tickets. Giving corps members 5 tickets each and telling them to sell them wouldn't be fair, and trying to make $25,000 in one month doing this is just not realistic in my mind.

Good Luck.