An Administrator's Guide to California Private School Law

Chapter 19 – Fundraising

A lawful “raffle” is defined as a scheme that provides the opportunity to win prizes by chance among persons who have paid money for paper tickets and which meets all of the following requirements: 2471  Each ticket must be sold with a detachable coupon or stub, and both the ticket and its associated coupon must be marked with a unique and matching identifier;  Winners of the prizes must be determined by draw from among the coupons or stubs;  The draw must be conducted in California under the supervision of a natural person who is 18 years of age or older; and  At least 90 percent of the gross receipts generated from the sale of raffle tickets for any given draw must be used by the eligible organization conducting the raffle to benefit or provide support for beneficial or charitable purposes. Alternatively, the organization may use those revenues to benefit other private, nonprofit organizations, if the organizations receiving these funds are eligible organizations that may conduct their own raffles. In no event may funds raised by raffles be used to fund any beneficial, charitable, or other purpose outside of California. 2472 Schools may pay for administrative and other costs associated with the raffle from the remaining ten percent of gross receipts of ticket sales, or from any other source. 2473 Schools may compensate employees operating the raffle from the remaining ten percent or other sources other than the 90 percent provided for beneficial or charitable purposes, but schools may not compensate volunteers or non-employees for their assistance in operating a raffle. 2474 At all times, schools must ensure that at least 90 percent of the gross revenue from the raffle is used for charitable or beneficial purposes. 2475 No individual, corporation, partnership, or other legal entity, besides the School, or the eligible organization receiving charitable support from the School, may have a financial interest in the conduct of a raffle. 2476 LCW Practice Advisor

The Legislature has determined that nonprofit organizations affiliated with major league sports teams may hold 50/50 raffles, permitting them to avoid the requirement that 90 percent of gross receipts must be used for beneficial or charitable purposes. 2477 This exception does not apply to schools not affiliated with a major league sports team. Schools, therefore, are generally prohibited from holding 50/50 type raffles.

No raffle may be conducted, and no tickets may be sold, by any gaming machine or within an operating satellite wagering facility or race track. 2478 Importantly, raffles may not be operated or conducted in any manner over the Internet. Thus, selling, trading, or redeeming raffle tickets online is prohibited. 2479 This prohibition, however, does not prohibit advertisements of a raffle

An Administrator’s Guide to California Private School Law ©2019 Liebert Cassidy Whitmore 600