50/50 Raffles, Auctions, and Charity Gaming in Oregon: How to Fundraise Creatively While Staying Compliant
By: Tarn Faith, JD Candidate, Narwhal’s Summer Legal Fellow
Nonprofit fundraising events are often more than simply a means to raise money. Instead, they can serve as an opportunity to build community, directly engage with supporters of the organization, generate excitement around a cause, and most importantly they can just have a good time. Fundraising tools such as 50/50 raffles, silent auctions, and casino style charity games can transform the fundraising process from intimidating to exhilarating. But, these events are often categorized as a form of gambling, and it is vitally important your organization knows the do’s and do not’s of hosting these events.
Game Nights
Let's start with the general requirements for hosting a game night. In Oregon, charitable gaming is regulated by the Oregon Department of Justice (DOJ). Eligible nonprofit organizations may conduct certain games, such as Monte Carlo, bingo, and raffles. So what does it mean to be eligible? Well, there are three requirements and organization must meet:
Be exempt from federal income tax;
Have maintained that tax-exempt status for at least one year; and
Have actively operated for charitable, fraternal, or religious purposes during that period.
For bingo, Monte Carlo, or raffles, your organization must also be licensed to conduct the game. Each one of these events can be used to make a fundraising event far more engaging, but Oregon considers them all games of chance. As such, the organization must obtain a license in order to host these events, unless an exception applies. There are three exceptions:
Nonprofit organizations operate bingo games with a total handle of no more than $5,000 per calendar year.
Nonprofit organizations holding raffles with a cumulative handle of no more than $10,000 per calendar year.
Nonprofit organizations holding Monte Carlo events with a total handle of no more than $5,000 per calendar year.
A handle, in this context, is the total amount of money wagered or put into the game of chance. With this in mind, if you are seeking an exception, it is important to keep a close eye on how much money you are raising from the event and keep record of that information so you can keep track of it throughout the entire year. It is also important to note that Oregon limits participants to those over 18 years of age. Licenses cost anywhere between $20 - $300, and the process can be done by submitting an application to the Charitable Activities Section of the Oregon DOJ. Application forms are available online or may be obtained by contacting the Portland office: Charitable Gaming Registrar: Here is a relevant website.
Now, what if this is all just too much for you and your organization? You had a great theme, a fun idea, and were motivated a second ago, but have lost all steam after reviewing legal jargon. Don’t give up hope! The good news is that if you want to avoid these requirements and do something less intensely regulated, auctions can be a great alternative.
Auctions
Silent and live auctions are a tried and true way to garner engagement and raise money. They are also not considered games of chance in Oregon, because the winner is determined by bidding, and random selection or luck. An organization hosting an auction should still consider things such as: accurate descriptions of auction items, donation documentation, and sales tax implications (though this is not relevant in Oregon), however, there is no licensing infrastructure that an organization must contend with when hosting an auction.
Alcohol
Finally let's talk about alcohol. Alcohol has long been paired with fundraising, and for good reason. However, there are serious requirements when alcohol will be present at an event, and a good rule of thumb is to review requirements well in advance of a fundraising event if alcohol is going to be included at all. The Oregon Liquor and Cannabis Commission (OLCC) generally requires a liquor license whenever alcohol is sold at an event. A license may also be required when alcohol is provided at an event where admission is charged or donations are accepted, even if the alcohol itself is not separately sold. Here is a relevant website.
In Conclusion
Ultimately, remember that fundraising can be a unique and fun opportunity to generate money for a good cause, and fundraising creatively is an excellent way to conduct an event! But when you go to set up a cool fundraising event, just remember that compliance is key!
Need assistance on determining whether or not your event as planned is legally compliant or help establishing rules and disclaimers? Let’s discuss!
