CalNonprofits Articles

Lots of nonprofits hold raffles to raise funds, so why is CalNonprofits opposed to Senate Bill 549, a bill that would expand charitable raffles? Because SB 549 lets professional sports teams and their foundations play by different rules than the rest of us.

You’re probably thinking, “Wait, what!?”

Here’s some background:

Before 2001, nonprofits (or anyone) could not legally conduct raffles at all. CalNonprofits helped initiate a multi-stakeholder process that changed state law through a voter-approved initiative, which allowed nonprofits (and only nonprofits) to conduct raffles as long as 90% of the gross receipts from a raffle are directed to "beneficial and charitable purposes." This “90/10” raffle provision has allowed all charities to hold raffles and raise much-needed funds to support their mission-based activities.

But SB 549 would create a carve-out with special rules for an exclusive set of nonprofit organizations: nonprofit affiliates of nine major sports leagues (such as the NFL and MLB) that are named in the bill -- and only these organizations -- would be authorized to conduct raffles where 50% of raffle receipts can be awarded to a winner. All other nonprofits – school bands, symphonies, humane societies, rotary clubs and food banks, and all the rest of us – would be limited to the current 90/10 rules, whether they prefer it or not. And that’s not fair.

And it also doesn’t appear to be very charitable, confusing the public about the real purpose of all raffles. Current law ensures that the primary purpose of any charitable raffle is to benefit a nonprofit. Raffles with a 50/50 split move away from that intent, and may inadvertently put more focus on gambling to win a cash prize. And the public could rightfully become confused about whether raffles really benefit nonprofits at all.

At CalNonprofits, we strongly believe that laws affecting nonprofits should be crafted with input from stakeholders throughout the sector and should treat nonprofits equally.

That’s why we’re on record – joined by CalNonprofits members like Housing California, the Napa Valley Community Foundation, the Center for Human Services, the Association of California Symphony Orchestras, Meals on Wheels San Francisco and the Santa Barbara Community College Foundation – in opposition to SB 549.

The Republican caucus in the Assembly gets where we are coming from, writing, "This is really a 'robbing the poor to feed the rich' scenario in that multi-million to billion dollar owners are utilizing the patrons of a sporting event to increase their charitable giving. Why don’t the professional sports team just up their ante and support their own causes?"

If you share our concerns, please contact your Assemblymember today. If you’re not sure who your Assemblymember is, you can find out here.

We'd love to hear from you about your questions, comments and views -- this is an ongoing discussion. Please contact Policy Director Nancy Berlin. You can read more about this bill and others that CalNonprofits is weighing in on here at the CalNonprofits Bill Tracker.

Update: Please see our letter of opposition here.

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