New Law Changes Nonprofit Fundraising

Aug 27, 2012

Sometimes a new law is heralded by the groups it’'s meant to help.  Other times, it’'s an occasion for some organizations to realize they'’ve been out of compliance for years. 

Legislation signed into law in February governing small games of chance was intended to benefit the nonprofit groups holding raffles and drawings to raise money for their community, but lawmakers and State Police troopers enforcing it say the changes have led to confusion.  

State Police Sergeant James Jones says groups like American Legion posts and other organizations that run the games shouldn't be objecting to the law, because it allows many to keep up to 30 percent of the proceeds for certain operational expenses.

"[Non-profits] weren'’t allowed to use any before," Jones said.  "They didn'’t realize."

But he added nonprofits are now required to donate the remaining 70 percent of proceeds back to the community within a year of collecting the money.  

More confusion came from a provision prohibiting an officer or employee operating the game of chance from participating  unless it's a raffle.

"When this first came out, we had a lot of clubs calling and they interpreted this as a blanket prohibition from any participating in any games of chance," Jones said.
Jones said he’'s been battling such misinformation on various points of the law.  He says it shows that over the years, organizations have come to think of small games of chance proceeds as their own money, and not intended to serve their communities.

"The only possible negative to the clubs is a little bit more record keeping and some reporting," Jones said.  "Everything else in the act is beneficial to the clubs."