Define Raffle
You can find many interesting and creative ways to hold a fundraiser, but one of the most popular is a raffle. A raffle is a game that involves many people buying tickets in hopes that they will be randomly chosen to win a prize. A raffle is a simple concept with a potentially big payoff.
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Basics
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Some historians believe that raffles as they are known today began in Italy around 1515. The word "lottery" (a lottery is another version of a raffle) derives from the word "lotto," which means "destiny." There is no skill involved in a raffle----it is purely a game of chance. Buying more tickets increases the chances of winning. Charities and schools generally use raffles for fundraising purposes.
Types
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Raffles, lotteries and sweepstakes are "games" that are very similar in design. The difference is who sponsors them. Nonprofit organizations, such as charities or schools, hold raffles and either donate the profits or use them in a public service activity. Corporations and governments sponsor lotteries and sweepstakes. Lotteries follow the same rules as a raffle----you buy a ticket for a chance to win a prize. Sweepstakes do not require a ticket for a chance to win.
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Tickets
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Organizations make profits by selling tickets. Ticket pricing is mostly dependent on the value of the prizes. For smaller, less expensive prizes, the average ticket price is $1 or $2. For bigger prizes such as cars or trips, tickets can cost around $10. The price reflects the cost of the prize, the demographic of the ticket-buyers and the amount of money needed to be raised.
Prizes
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Prizes are arguably the most important part of the raffle----people will not buy tickets without the chance to win something. Most raffles have a "big ticket" item, like a car or a travel package, as well as several smaller items like electronics and gift certificates. Because the raffle is for a charitable cause, companies and individuals donate many of the prizes----this maximizes profits for the organization.
Legal
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Organizations need permission from the state to hold a raffle by obtaining a raffle license. Some states require filing with the state and the local government. The guidelines differ from state to state. In Colorado, for example, the organization must be at least five years old. Other states limit the number of raffles that can be held in a year, and others limit the value of the prizes. Some states, such as Iowa, require at least 30 days to process the raffle license application, so an organization must know well in advance if it wants to hold a raffle.
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