FAQs > FUNDRAISING > CHARITABLE RAFFLES
Can you tell me more about charitable raffles and are they legal?
Answered by: Ben Bullock
Are charitable raffles legal in South Carolina?
The answer is YES!
Though many organizations use raffles and other forms of drawings as fundraising tools, they had long been illegal in South Carolina. SCANPO worked with other organizations like the SC Lions Charitable Services, to make charitable raffles legal and provide SC nonprofits with an effective fundraising tool used in all but four states.
The Constitutional Amendment has passed and it has been ratified by the General Assembly! Raffles became legal for charitable nonprofits starting on April 4, 2015.
What does the new law say?
- The bill is tightly crafted to ensure that this cannot be a vehicle for any other kind of gambling, such as video poker or casino gambling.
- Third parties cannot operate raffles for nonprofits. Raffles may only be conducted by the nonprofit’s directors, bona fide employees and volunteers, none of whom may be paid for their services in running the raffle, except that bona fide employees may receive their regular and ordinary compensation.
- Regulation lies with the Secretary of State and is funded by a $50 annual fee for raffles.
- No organization may raffle off prizes valued at more than $250,000, with no individual prize valued at more than $40,000. No real estate may be raffled off.
- Nonprofits operating raffles where the value of non-cash, donated prizes for the raffle is less than $500 dollars, or fifty‑fifty raffles where the tickets are sold to members or guests of a nonprofit organization and the total value of proceeds collected is not more than $951 dollars, are exempt from registration. Organizations exempt from registration may not conduct raffles more often than weekly.
- Annual registration and detailed reporting are based on the organization’s fiscal year. Fines assessed for violations are paid to the General Fund. Law enforcement will assist the Secretary of State in enforcing the law.
- The bill broadly allows nonprofits recognized by the IRS (including churches), governmental subdivisions, parent-teacher associations, athletic booster clubs and educational institutions to run raffles. The net proceeds of raffles, however, must be dedicated to the same charitable purposes that would qualify an organization for Section 501(c)(3) status as a charity.
- Organizations conducting raffles are required to disclose in all advertising for the raffle the name of the sponsoring organization, the charitable purposes to which the proceeds will go and the percentage of gross raffle proceeds over the previous two years that did not go to charitable purposes.
- Sunsets after 5 years unless renewed by the General Assembly and every ten years thereafter.