Raffling a House or Condo for Charity
In Florida, and many other states, it is perfectly legal for charities and some other nonprofit organizations to have a fundraiser by selling raffle tickets where the prize is a house or condominium. These can be good sources of revenue if carefully planned. But without first building in the proper safeguards, these types of raffles can lose money for all parties involved.
Charity auctions are governed by municipal laws, county laws, state law (Florida Statute §849.0935) and federal tax laws. There are also specific federal tax consequences to the donor of the house or condo, raffle winner and charity itself. Raffles of houses and condominiums that are "upside down" on their mortgages present special challenges to overcome. Also, if a charity carries on too many similar raffles, it will be in danger of incurring "unrelated business income taxes" on a portion of the raffle proceeds, even though the charity is tax exempt.
Before holding a raffle, be sure to review the laws and regulations governing them, so that your raffle will be successful, and not inadvertently violate any laws.
Attorney Jay Fleisher is familiar with the laws governing charity raffles, and has guided charities and donors when they plan and operate them. If your charity is considering a house or condominium raffle, please contact Attorney Fleisher for an initial no cost consultation.