Raffles Are Gaining Popularity For Non-Profit Fundraising
Fundraisers have become big and many people want to take part of it. One of the greatest ways that fundraisers can be active is by holding a raffle fundraiser with students. Students that get involved should be awarded for that type of work and make students want to do more. Especially when it comes to non-profit organizations, people are willing to help because they know that their work is going towards a good cause.
Raffles are gaining popularity for nonprofit fundraising. Often combined with a gala or other big event, raffles are accessible and fun. In a tight economy, attendees might hesitate to bid on a big auction item, but almost everyone can afford a raffle ticket. While everyone likes a nonprofit raffle, many nonprofits don’t realize the registration and reporting that raffles require. Many organizations give the winner a 1099 and hope for the best. If you’ve done that in the past, you’re not alone. Unfortunately, that’s not the right way to run a raffle. The IRS has increased its scrutiny of gaming activities and has partnered with many states to compare state gaming registrations to proper IRS reporting. If you run a raffle for your nonprofit, learn about the requirements that may apply to you and make sure you’re running it right.
Running a raffle can be a good source of revenue and a good fundraising tool. It gets many people involved in supporting the organization and generates excitement and fun. To avoid penalties and hassle, use these questions as a starting point to make sure you know the registration, reporting, and withholding requirements related to your raffle.
A qualified organization may offer any prize except money. “Money” is defined as coins, paper currency, or a negotiable instrument that represents and is readily convertible to coins or paper currency. If the raffle organizers offer a prize which they have purchased or have given other consideration for, the value of the prize may not exceed $50,000, or $250,000 if the purchased prize is a residential dwelling. There is no value limit on prizes donated to the organization.
Texas lottery tickets may be purchased and offered as prizes, even though the tickets’ payoff may exceed $50,000. The organization must have each raffle prize in its possession or ownership or must post a bond for the full amount of the value of the prize with the county clerk of the county where the raffle will be held. Proceeds from ticket sales must be used only for the charitable purposes of the qualified organization.
Timing plays a role for other cash and stock donations, too. You can’t claim a deduction for a check with a future date that falls into the next tax year, even if you send it by the end of the year. Post-dated checks with January dates that are delivered December 31 don’t count as a deduction for that tax year, for example. You must use the current date and mail your check by December 31 if you need the deduction.
The day you instruct your broker to transfer a stock gift to your favorite charity is not the gift date; the day the transfer goes through determines the tax year for your donation. However, year-end credit and debit card donations can be claimed for the tax-year in which they were given, regardless of when you pay your bill.The key date is the processing date, advises Parquette.