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Raffles

On March 5, 2015, the South Carolina legislature ratified a constitutional amendment to allow certain nonprofit organizations to conduct raffles in the state of South Carolina.  Voters approved the constitutional amendment during the general election in November 2014.  Nonprofit organizations will be able to conduct raffles beginning on April 4, 2015, or thirty days after ratification of the amendment.

Under the South Carolina Code of Laws §33-57-120(A), only qualified nonprofit organizations are eligible to conduct raffles.  These include certain tax-exempt organizations and classes, departments, or organizations of educational institutions.  In addition, in order to conduct a raffle, a nonprofit organization must have a religious, charitable, scientific, literary, or educational purpose, or be operated for the purpose of supporting amateur sports or the prevention of cruelty to children or animals.  Finally, the nonprofit organization must be in compliance with the South Carolina Solicitation of Charitable Funds Act.  This means that the organization must be registered with the Secretary of State’s Division of Public Charities for the purpose of soliciting charitable contributions, unless it is specifically excluded from registration under the Act.  For example, churches and other houses of worship are eligible to conduct raffles, but are not regulated under the Solicitation of Charitable Funds Act.  For your convenience, here is a direct link to the Act .

Generally, in order to conduct a raffle, a nonprofit organization must file an annual raffle registration form with Division of Public Charities.  If an organization only conducts “exempt” raffles, however, it is not required to file a raffle registration.  “Exempt” raffles are different from “nonexempt” raffles in terms of prize limits, raffle participants, and frequency of raffle events.  For example, a raffle which offers a noncash prize or prizes that have been donated to the nonprofit organization, and the total value of the prizes do not exceed $500.00, is considered to be “exempt.”  The other type of “exempt” raffle is a fifty-fifty raffle in which tickets are sold only to members of the nonprofit organization and their guests, and the total proceeds of the raffle event do not exceed $950.00.  Finally, a nonprofit organization may only hold one “exempt” raffle every seven days.

If a nonprofit organization files a raffle registration form, then it will be eligible to conduct up to four “nonexempt” raffles each year.  Prizes offered in a “nonexempt” raffle cannot exceed the fair market value of $40,000.00 for an individual prize, or $250,000.00 for all prizes offered in a single raffle event.  A registered organization may conduct both “exempt” and “nonexempt” raffles.  For a detailed explanation of the difference between “exempt” and “nonexempt” raffles, please follow this link.
 
The annual raffle registration form is available on the Secretary of State’s website at www.sos.sc.gov, under Forms and Fees.  The raffle registration includes a $50.00 filing fee.  Registered organizations are required to file an annual raffle financial report with the Division of Public Charities 4 ½ months after the end of their fiscal year.  This form is also available on the Secretary of State’s website. 

To view a list of Frequently Asked Questions about nonprofit raffles, please follow this link.  In addition, here is a direct link to the chapter of the South Carolina Code of Laws governing nonprofit raffles.
 
If you would like to file a complaint about a nonprofit raffle, please submit the Charitable Solicitation Complaint Form or contact the Secretary of State’s Investigations Division at investigations@sos.sc.gov or (803) 734-1790.