Pros and Cons: Raffles

To hold a raffle, you sell people tickets, then have a drawing. One or more ticket-holders win prizes. 


  • The potential return is high.
  • If you can get a corporation to sponsor your raffle, you can offer a fine prize with no cost to your organization.


  • Raffles may be illegal in your state.
  • You must register with every state in which you solicit funds. The cost in time and filing fees may make the 
    project unfeasible.
  • There are many laws, IRS regulations, postal rules, and accounting hoops to go through.
  • Recordkeeping is complicated and difficult.
  • You face potential lawsuits if you don't meet your obligation to provide the prizes you advertise.


  • Do a cost analysis first to be sure you will exceed your break-even point by a comfortable margin.
  • Consult with an attorney and accountant before going ahead, and have them on hand throughout the project. Their professional opinions will be critical to the specifics that come up.
  • The purchase of a raffle ticket is not tax-deductible. You must clearly explain this fact on every announcement of the raffle, including the ticket itself.



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