From time to time, we pitch a question culled from the ISM Advancement Listserv to our experts. This month, Michael Christopher, Assistant Headmaster—School Advancement, at Lausanne Collegiate School (TN) is at the plate.
The question is: “Our new parent Auction Gala Chair has suggested a partial tuition raffle as a fund raiser. Anyone have experience with this? I have a suspicion that there must be pitfalls, legal or maybe even ethical issues.”
Michael Christopher suggested this simple list of pros and cons:
Pitfalls:
- Raffle tickets are not tax deductible and the winner has to pay tax on the winnings.
- The raffle has to raise at minimum the cost of the prize in order for this to make good economic sense.
- Spending on raffle tickets can detract from spending on other auction items.
- In some states raffles are either strictly regulated or are illegal because it is considered a form of gambling.
- Policies should be in place to handle issues such as families on financial aid—the prize might be greater than the family would owe.
Benefits:
- Can generate excitement about the auction event if the drawing is held during the gala
- Could be a significant revenue generator
When you explore this potential fund raiser, is it essential that you check your state and local charitable gaming laws, as Michael noted. For general information, you can check your state’s laws here, but be thorough!
Additional ISM resources of interest
ISM Monthly Update for Development Vol. 8 No. 3 Organizing a Casino Night Fundraiser? Check the Laws!
ISM Monthly Update for Development Vol. 9 No. 7 It’s Auction Time!
