Charity sweepstakes and raffle fundraisers can be a nice way to raise money for a social cause. In this article, we’ll explore the differences between charity sweepstakes and raffle fundraisers below.
Charity Raffles
Raffles and sweepstakes are similar in the sense that both offer the chance to win a prize in exchange for a donation. But, the key differences lie in how they’re regulated. According to government regulators, raffles are considered a form of gambling, since donors make a payment in exchange for a chance to win something.
Raffles for charitable purposes can be allowed at the federal level for 501(c)(3) organizations in many instances. Organizations conducting such raffles must still follow the state and local raffle laws and regulations that apply to them. These regulations can make it very difficult to run an interstate raffle, and almost impossible to run one nationally. Fortunately, for local fundraisers by 501(c)(3) organizations who qualify, raffles are an excellent way to raise money.
Please note: Online raffles are prohibited entirely in Alabama, Hawaii, California, Kansas, Utah, Washington, New Jersey, Iowa, Minnesota, and Montana.
Charity Sweepstakes
Charity sweepstakes have fewer geographic regulatory restrictions than raffles. Entries for charity sweepstakes may be sold nationally or even internationally. This allows organizations to run charity drawings that have a wider reach if that’s their goal.
The primary difference between sweepstakes and raffles is that a sweepstake must offer a free method of entry, along with donation-based entries. Due to this, sweepstakes aren’t considered to be a gambling activity in the same way that raffles are.
Most of the time, mail-in entries total to less than one percent of the number of donation-based entries. Some sweepstakes may receive no mail-in entries at all. Most people are willing to donate to participate since it’s for charity. Charitable sweepstakes often have only one free entry per person to prevent abuse.
