Bill to Increase Payouts for Certain Charity Raffles Advances in California

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July 16, 2015; Sacramento Bee

 

California is again considering a bill allowing nonprofits affiliated with professional sports teams to conduct raffles at games and dedicate half the proceeds to winners. The proposal has divided charities and prompted questions about the line between giving and gambling, according to a report in the Sacramento Bee.

Charity raffles, illegal in California law until a ballot measure passed in 2000, must dedicate 90 percent of the proceeds to the cause, with the remainder rewarding winners. But a coalition of professional sports teams and affiliated nonprofits is pushing a bill that would allow raffle winners to claim half the proceeds so long as the event takes place during a game and on behalf of a team-affiliated charity.

The idea is that many more people will buy tickets, and while a smaller percentage of ticket proceeds will go to charity, the cause will still benefit from larger overall raffle sales, according to the Bee. Fifty-fifty raffles are legal in many other states, and a move to have California join them stalled last year, but this year’s bill passed the State Senate without a single dissenting vote.

In support of the bill are professional sports teams and leagues, all of them well connected in the State Capitol. They say it would let them expand the types of charitable organizations they currently support. But the California Association of Nonprofits (CAN) opposes the measure, as reported in Nonprofit Quarterly last week. CAN says the bill would give an unfair advantage to certain organizations and warp the altruistic purpose of fundraisers, making them more about winning money. One member of CAN’s board, which voted to oppose the bill, called it an unnecessary “carve out” that would allow sports teams and their foundations to have special rules about how they fundraise.

The bill’s author denounced opponents, and called opposing it tantamount to depriving low-income Californians by a group of “folks who have never stepped foot in minority communities where people struggle to make ends meet.”

But, some of the charities opposing the bill serve some of California’s most impoverished areas. “The professional sports teams obviously bring a lot of publicity and excitement to these things and they get a lot of good will from conducting these activities, but this is about what’s fair and equitable, and fairness would dictate that you apply the law equitably across the nonprofit sector,” said the president of the Kern County United Way.

Although some legislators sympathized with that argument, they ultimately voted for the bill, with the reasoning that it would increase funding for the affected charities. However, other opponents called the proposal a way to promote a new form of gambling. And American Indian tribes have also come out against it, saying the bill authorizes a new type of gambling without adequate controls.

But those nonprofits that already work with professional sports organizations say the reach and visibility of the teams gives them a unique venue for generating donations: “Fans who have never heard of us and maybe have never donated to anybody, [have] an opportunity to experience philanthropy,” said one proponent.

The bill now goes to the State Assembly. If it passes the legislature, it would go to Gov. Jerry Brown for signature; he has not taken a position on it.—Larry Kaplan