As the school year arrives and charities plan fall fundraisers, we’re outlining answers to common questions, such as whether booster clubs have to register as charities, who can conduct a raffle, and how much profit an organization can keep.
- Do school booster clubs have to register with the state? Generally, yes, booster, parent-teacher, and similar groups in Ohio must register with the Ohio Attorney General’s Office. Ohio charities, or charities that solicit in Ohio, generally must register within six months of creation. Groups should complete their initial registration at Charitable Registration. Additional information about charitable registration and filing is available on the Ohio Attorney General’s website.
- Can my booster club hold a bake sale, T-shirt sale, or spaghetti dinner fundraiser? Generally, yes. All of these fundraising examples are considered solicitations and are governed by Ohio Revised Code (ORC) Chapter 1716. As long as your fundraiser is conducted in accordance with ORC Chapter 1716, it is permissible under Ohio’s charitable organizations law. If your proposed activity includes charitable gaming, please consult ORC Chapter 2915 and the Ohio Attorney General’s Policy 201. Also keep in mind that other rules may apply, and you may need to contact other organizations when planning your event. For example, contact your local health department about restrictions on the sale of food.
- Who can conduct a raffle? According to Ohio Revised Code (ORC) Section 2915.092, only the following groups may conduct a raffle: a charitable organization, a public school, a chartered nonpublic school, a community school, or a veteran's organization, fraternal organization, or sporting organization that is also a 501(c)(3), 501(c)(4), 501(c)(7), 501(c)(8), 501(c)(10), or 501(c)(19) tax-exempt organization.
- Does my charity need a license to conduct a raffle? Under ORC 2915.092, a group that is permitted to conduct a raffle does not need a license to conduct a raffle. Nevertheless, the raffle must be conducted in compliance with Ohio Revised Code (ORC) Chapter 2915. Raffles are defined in ORC 2915.01(CC) and their conduct is described in ORC 2915.092.
- Can a person who is under 18 sell and purchase raffle tickets? According to ORC 2915.11(A), a person who is under 18 may sell raffle tickets as long as that person is not selling raffle tickets at the site of the raffle. No statute in the Ohio Revised Code explicitly prohibits a person under 18 years of age from purchasing tickets for a raffle. Similarly, no statute prohibits the sale of raffle tickets to a person under 18 years of age, as long as the raffle itself is permissible under Ohio law. For a more detailed explanation specific to public schools, please see Ohio Attorney General Opinion No. 2004-042.
- Do I need to keep records if my charity conducts a raffle? Under ORC 2915.10, all organizations conducting raffles have recordkeeping requirements related to expenses and prizes. These records must be kept at least three years.
- Can I keep 100 percent of the net profit of a raffle? If a 501(c)(3) organization conducts the raffle, 100 percent of the net profit from the raffle can go to the organization. If a 501(c)(4), (c)(7), (c)(8), (c)(10), or (c)(19) conducts the raffle, the organization must distribute at least 50 percent of the net profit to a charitable purpose described in ORC 2915.01(v) or to a department or agency of the federal government, the state, or any political subdivision.
- What should parents consider when organizing a fundraiser for a school? There are many factors to consider. For example, if you’re planning to hold a certain type of event or sale, find out if similar fundraisers have been conducted in the past and what the results were. Consider whether the fundraiser is likely to generate enough profit to make the activity worthwhile. Make sure there is a system in place to properly process orders and collect money. If you plan to use a certain company to supply products or services, check the company’s reputation. Determine what would happen if products are ordered but not paid for. Also, if children will be involved in the activity, take steps to ensure they will be safe and properly supervised.
For more frequently asked questions about fundraising by charities, visit the Ohio Attorney General’s website.