Date Established: 8/23/2016
Date Last Updated:
Financial Management and UB Foundation
Vice President for Finance and Administration
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University departments, entities, and organizations may conduct raffles to raise funds in support of university related activities in accordance with this policy.
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.
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.
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:
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:
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.
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.
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.
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.
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.
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.
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.
A form that must be completed and submitted to Financial Management and the UBF for approval prior to the start of raffle ticket sales.
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.