Student Organization-Sponsored Raffles

Nonprofit student organizations or associations may conduct raffles provided that these raffles are conducted in compliance with North Carolina General Statute section 14-309.15. A student group/organization is not automatically a nonprofit entity nor does it fit under the umbrella of the university's nonprofit status. There are separate filing requirements to become a nonprofit entity. (See the separate web page information on becoming a nonprofit.) Failure to comply with the statutory requirements for a raffle is a misdemeanor offense. The requirements are as follows:

http://www.ncga.state.nc.us/EnactedLegislation/Statutes/HTML/BySection/Chapter_14/GS_14-309.15.html 3-3-2005

  1. The organization must be recognized by the North Carolina Department of Revenue as tax-exempt . This can be accomplished provided the organization's constitution and/or bylaws state: (a) the organization's purpose, (b) that no part of the net earnings of the organization or association shall inure to the benefit or, or be distributable to, its members, officers, or other persons, and (c) that upon dissolution, the assets of the student organization shall be turned over to one or more organizations which are similarly exempt as non-profit.

http://www.secretary.state.nc.us/Corporations/

Once approved by the NC Secretary of State as being recognized as a nonprofit organization, the NCDOR will contact the entity and request the additional information necessary for tax exempt status: a copy of the approval from the NC Secretary of State, a copy of the bylaws, information on how money will be raised, the type of nonprofit it is and a request for some information as to what the entity does. This information is sent to NCDOR, P.O. Box 25000, Raleigh, NC 27640.

http://www.dor.state.nc.us/

  1. Each student group is limited to two raffles per year
  2. The maximum cash prize offered or paid for any one raffles is $5,000.00 and, if merchandise is used as a prize, the maximum fair market value of that prize may be $25,000.00. No real property may be offered as a prize in a raffle.
  3. Raffles shall not be conducted in conjunction with Bingo .
  4. No less than 90% of the net raffle proceeds , less the cost of the prizes awarded, shall be used by the nonprofit organization for charitable, religious, education, civic, or other nonprofit purposes. No proceeds may be used to pay anyone to conduct the raffle or to rent a building where the tickets are received or sold or the drawing is conducted.
  5. A raffle is a game in which the prize is won by the random drawing of a name or number of someone purchasing the chance.

This is general information about Raffles and is not intended to be a substitute for legal advice as it relates to your particular situation. Consult with our office to discuss how your particular facts relate to the law.