Monday, September 25, 2023
Selling tickets for a chance to win a prize may seem like an easy way to raise funds for a cause or awareness for an event, but raffles at nonprofit organizations, including state agencies like UNC Charlotte, are actually controlled by North Carolina law. Make sure you know the rules before you sell tickets!
- What does the state consider to be a raffle?
A raffle is defined as a game in which the prize is won by random drawing of the name or number of one or more persons purchasing chances. If money exchanges hands – either for entry to the event or for tickets for a chance to win prizes, it’s a raffle.
- What is not a raffle?
Any drawing for prizes for which chances to win are not purchased. E.g, drawings from tickets handed out to attendees at an event without an entry fee, pulling winning names from a pool of names submitted without any purchase required, etc.
Using the term "raffle" should be avoided in these instances; drawing, door prize, etc. are appropriate terms.
. - Does the state regulate how many raffles the University can have?
Yes! The University, as a nonprofit organization, is permitted only four raffles per year under NC General Statute §14‑309.15.
This does not include separate affiliated entities such as foundations and student organizations, which have their own limit of four raffles per year.
- If I want to hold a raffle, what do I do?
Approval to run a raffle must be obtained from the Office of the Associate Vice Chancellor for Finance in advance of the event to ensure that it fits within the four raffles permitted for the year. Approval is granted on a first-come first-serve basis regardless of the date of the raffle. Contact Anne Brown at abrow316@charlotte.edu or
704-687-5770.
- Are raffle winnings subject to taxes?
Raffle winnings are subject to federal and state taxes and reportable on IRS Form W-2G. The unit conducting the raffle must collect the winner’s name, address and taxpayer identification number, as well as provide information about the winnings, using IRS form 5754, to ensure proper reporting. The Tax Department can provide guidance on this process.
Raffle winnings in excess of $5,000 are subject to tax withholding which must be coordinated with the Tax Department before the winnings are disbursed to the winner.
- Are there other restrictions on awards and prizes?
Other important, but less common, requirements and restrictions can be found in section IV.G. of University Policy 602.11 Gifts, Awards, and Prizes.