Policy Information

Date Established: 8/23/2016
Date Last Updated:
Category:
Financial
Responsible Office:
Financial Management and UB Foundation
Responsible Executive:
Vice President for Finance and Administration

Policy Contents

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Raffle Policy for University Fundraising Efforts

Summary

University departments, entities, and organizations may conduct raffles to raise funds in support of university related activities in accordance with this policy.

Policy Statement

The University at Buffalo (UB, university) permits departments, entities, and organizations, to conduct raffles to raise funds in support of university related activities. Raffles must be conducted in accordance with university, state, and tax reporting requirements.

University Requirements

A university department, entity, or organization planning to conduct a raffle must review and complete the Raffle Proposal.

The Raffle Proposal must be completed and submitted to Financial Management and the University at Buffalo Foundation (UBF) for approval prior to the start of raffle ticket sales.

Raffle tickets may not be purchased using university accounts or university funds.

All raffle proceeds must be deposited into a University at Buffalo Foundation account.

To be entitled to any raffle prize, the winning raffle ticketholder must provide all required documentation within ninety calendar days after the date the raffle drawing is conducted. Raffle prizes not properly claimed within ninety days are deemed forfeited, and any or all of the amount of the forfeited prizes may be retained by the UBF for its charitable purposes.

State Requirements

Within New York State (NYS), the Charitable Gaming Division of the NYS Gaming Commission governs the conduct of raffles. As a general rule, a not-for-profit organization that is tax exempt and which is established to provide a benefit to others may conduct a raffle.

The following requirements apply to all raffle categories:

  • Raffle tickets may be sold on university premises, and in certain instances it may be permissible to sell raffle tickets to the public outside of university premises. Consult with the UBF to discuss the specifics regarding your raffle intentions.
  • Raffle drawings must be conducted on university premises.
  • Only persons eighteen years of age or older may purchase raffle tickets, sell raffle tickets, or conduct or assist in the conduct of a raffle drawing.
  • Raffle tickets may not be sold more than 180 days prior to the date scheduled for the occasion at which the raffle is conducted.
  • Raffle tickets may be sold by a member of the university or one of its affiliates.
  • The winner of a raffle prize is not required to be present at the time the raffle drawing is conducted.
  • All proceeds derived from games of chance, including raffles, must be disbursed solely for lawful purposes pursuant to Article I, Section 9 of New York State’s Constitution, the Games of Chance Licensing Law, and the Commission’s Rules and Regulations, and in accordance with Section 189 of the General Municipal Law and Part 4624 of the Commission’s Rules and Regulations.
  • A single prize in any raffle may not exceed $100,000.
  • The maximum aggregate value of prizes an organization can award in any one calendar year in all of the different types of raffles, combined cannot exceed $2,000,000.
  • Raffle tickets may not be mailed to purchasers or sold over the Internet.
  • Raffle tickets may not be purchased with a credit card.

Tax Reporting Requirements

The value of a prize awarded through a raffle is considered taxable income to the recipient and may require the university to report the value of the prize to federal and state revenue agencies, and collect identity information about the winner. Additionally:

  • Certain Internal Revenue Service (IRS) requirements exist for prizes valued at $600 or more and the prize value is more than 300 times the wager requirement.
  • If the prize is $5,000 or more, the university may be required to collect withholding tax from the prize winner.

The federal government may seek federal unrelated business income tax (UBIT) on the net revenue from the activity. In order to meet the federal exclusion for UBIT on charitable gaming, units conducting raffles must maintain accurate records reflecting the number of hours worked on the raffle by compensated and volunteer workers. The net revenue can be excluded if substantially all the work is performed by volunteers.

Background

A raffle involves selling pre-numbered tickets for the opportunity to win a prize. In some instances the prize may represent a cash payout. In particular, a 50-50 raffle involves the sale of pre-numbered raffle tickets with the proceeds being split evenly between the winner and the organization. When conducting a game of chance raffle, various university, state, and federal tax reporting requirements must be considered.

Raffles conducted in NYS are a form of charitable gaming governed by the Charitable Gaming Division of the NYS Gaming Commission.

Applicability

This policy applies to all raffles conducted by or on behalf of university departments, entities, and organizations as a form of university fundraising efforts for university purposes.

Definitions

Charitable Gaming

Occurs in the form of bingo, bell jar sales, the conduct of Las Vegas nights, and operation of raffles in each of the 62 counties of New York.

Games of Chance

Include games known as merchandise wheels, coin boards, merchandise boards, seal cards, raffles, bell jars, and such other specific games, in which prizes are awarded on the basis of a designated winning number or numbers, color or colors, symbol or symbols determined by chance, but not including games commonly known as bingo or lotto and also not including bookmaking, policy, or numbers games and lottery. Games of chance do not involve wagering of money by one player against another player.

New York State Gaming Commission

Organization which regulates all aspects of gaming and gambling activity in the state, including charitable gaming.

Penny Socials

Events in which a participant pays money for a ticket that will be randomly drawn to determine the winner of a merchandise prize. Penny Socials meet the definition of a Raffle and must be lawfully conducted.

Raffle

Game of chance in which a participant pays money in return for a ticket or other receipt and in which a prize is awarded on the basis of a winning number or numbers, color or colors, or symbol or symbols designated on the ticket or receipt, determined by chance as a result of a drawing from among those tickets or receipts previously sold. (NYS General Municipal Law, Section 186.3-b)
Raffles include Penny Social, Queen of Hearts, and Treasure Chest Raffles.

Raffle Category

Classification that best describes the type of raffle an authorized organization intends to conduct. Raffle categories are defined by the NYS Gaming Commission Division of Charitable Gaming.

Category 1 – raffle in which the cumulative net proceeds for all raffles conducted during the calendar year will meet or exceed $30,000.

Category 2 – raffle in which net proceeds derived from a single raffle will meet or exceed $5,000 or the cumulative net proceeds for all raffles conducted during the calendar year will meet or exceed $20,000, but will be not meet or exceed $30,000.

Category 3 – raffle in which net proceeds derived from a single raffle will be less than $5,000 and the cumulative net proceeds for all raffles conducted during the calendar year will not meet or exceed $20,000.

Raffle Proposal

A form that must be completed and submitted to Financial Management and the UBF for approval prior to the start of raffle ticket sales.

Raffle Ticket

Pre-numbered form utilized to identify individuals participating in a raffle.

Request for Taxpayer Identification Number and Certification (W-9)

Form utilized to collect the taxpayer identification number for the person who is required to file an information return with the Internal Revenue Service (IRS) to report income paid.

Unrelated Business Income  

Income from a trade or business, regularly carried on, that is not substantially related to the charitable, educational, or other purpose that is the basis of the organization's exemption.

Wager

Ticket price.

Responsibility

Departments/Units Conducting Raffles

  • Review and complete the Raffle Proposal.
  • Forward the completed Raffle Proposal to Financial Management for review and approval.
  • Conduct raffles in accordance with procedures outlined in the approved Raffle Proposal.
  • Maintain accurate records reflecting the number of hours worked by compensated and volunteer workers when conducting a raffle.
  • Deposit all raffle proceeds in a UBF account.
  • Notify the UBF of all prize winners and the amount of each prize.
  • Obtain a completed Request for Taxpayer Identification Number and Certification (Form W-9) from a tax-eligible prize winner when a prize is awarded, along with the winner’s driver license number and the state that issued the license. This information is used to report game winnings to the IRS. (See Tax Reporting Requirements.)

Financial Management

University at Buffalo Foundation

  • Review the Raffle Proposal for compliance with university, state, and tax reporting requirements.
  • Communicate approval of the Raffle Proposal to the department/unit conducting the raffle.
  • Prepare and distribute prize checks to raffle winners.
  • Provide accounting and required reporting for raffle proceeds and prizes.

Contact Information

Tricia Canty
Financial Management
420 Crofts Hall
Buffalo, NY  14260
Phone:  716-645-2639
tscanty@buffalo.edu

Christopher Decker
University at Buffalo Foundation
103 Center for Tomorrow
Buffalo, NY  14260
Phone:  716-645-8740
cdecker@buffalo.edu

Related Information

University Links

Forms

Related Links

Presidential Approval

Signed by President Satish K. Tripathi

Satish K. Tripathi, President

8/23/2016

Date