How to Run a 50/50 Raffle for US Nonprofit Fundraisers

A 50/50 raffle is a fundraising format in which participants purchase raffle entries and the proceeds are divided between the winning participant and the organization, typically on an even basis. The growing prize amount can be part of the appeal because supporters can see both the potential prize and the amount being raised for the cause.

Before organizing one, however, nonprofits should confirm that a 50/50 raffle is permitted where they operate. Raffles are regulated primarily under state and local law, and the rules can differ substantially across the United States. The IRS also treats raffles as gaming activities for federal tax purposes.

If your organization is permitted to hold one, the basic process involves establishing the raffle rules, determining how entries will be sold, tracking the proceeds, closing sales at a stated time, selecting the winner according to the published rules, calculating the prize, and maintaining appropriate records.

What Is a 50/50 Raffle?

A 50/50 raffle is different from a traditional raffle with a predetermined prize such as a vacation, gift basket, or donated product.

Instead, the prize is based on the proceeds collected from raffle ticket sales.

For a straightforward example, suppose an eligible organization conducts a permitted 50/50 raffle and collects $4,000 in qualifying ticket sales. Under an even split, $2,000 would form the winner's prize and $2,000 would remain with the organization, subject to the rules that apply to that particular raffle.

That example illustrates the concept only. Organizations should not assume that this prize structure is legal in every state.

California, for example, generally requires eligible nonprofit raffles to devote at least 90% of gross raffle-ticket receipts to charitable purposes, and its special 50/50 program applies to qualifying major-league sports organizations.  Massachusetts also warns that cash prizes funded from raffle proceeds can raise issues under its raffle rules.

These differences are why state-specific compliance needs to come before campaign setup.

How Does a 50/50 Raffle Work?

Where permitted, the basic concept is relatively simple.

Participants purchase entries for a chance to win. Ticket proceeds accumulate during the fundraising period. Once sales close, the organization determines the qualifying proceeds according to its rules, selects a winner, and awards the applicable share of the proceeds.

The organization retains the remaining amount for the stated fundraising purpose, subject to applicable laws and requirements.

Because the prize may depend on ticket sales, organizers should clearly explain how the prize is calculated rather than advertising a cash amount that hasn't yet been determined.

How to Run a 50/50 Raffle Step by Step

1. Check Whether Your Organization Can Legally Run the Raffle

This should happen before selling or promoting entries.

Raffle regulations aren't uniform across the United States. State and local rules can determine which organizations may conduct raffles, whether registration or a permit is required, how tickets may be sold, what prizes are permitted, and how proceeds can be used.

For example, Texas permits certain qualified organizations to conduct charitable raffles subject to statutory restrictions, while its separate professional-sports raffle law addresses cash prizes.

Don't use another nonprofit's raffle as proof that your organization can legally use the same format.

Check the official requirements for the state and locality where your organization plans to operate the raffle and obtain professional advice when necessary.

2. Establish Your 50/50 Raffle Rules

Once you've confirmed that the fundraiser is permitted, establish the rules before accepting entries.

Your rules may need to address:

• Who is eligible to participate
• Ticket or entry pricing
• When sales open and close
• How the prize is calculated
• When and how the drawing takes place
• How the winner is selected
• How winners are notified
• How the prize is claimed
• What happens if a winner cannot be contacted
• Any geographic or age restrictions
• Other disclosures required by applicable law

The rules should be accessible to participants before they enter.

Avoid changing important conditions once the raffle is underway unless applicable law and your published terms permit it.

3. Decide How Raffle Entries Will Be Sold

Depending on applicable law, your fundraiser might use physical tickets, an approved digital process, or another permitted method.

If you're using physical tickets, unique ticket numbers can help with entry management and winner verification.

If you're considering online ticket sales, check the law first. Don't assume that because a platform can technically accept online participation, your organization is legally permitted to sell raffle entries online in every jurisdiction.

California, for example, states that qualifying nonprofit raffles governed by its general raffle statute cannot be operated or conducted over the Internet, although they may be advertised online.  Massachusetts likewise states that its current law does not permit Internet raffle-ticket sales.

4. Set Clear Entry Options

If permitted, decide what entry options you'll offer.

Keep pricing easy to understand. If you offer multiple-ticket packages, make it immediately clear how many entries the supporter receives.

Avoid complicated pricing structures that make it difficult for participants or volunteers to determine how many valid entries someone has purchased.

Whatever structure you use should match your published raffle rules and applicable requirements.

5. Track Raffle Proceeds Carefully

Because a 50/50 prize may be calculated from raffle proceeds, accurate recordkeeping is especially important.

Keep clear records of qualifying ticket sales, ticket numbers or digital entries, refunds or voided entries where applicable, and the amount used to calculate the prize.

If several volunteers or locations are accepting entries, establish one process for reporting and reconciling sales.

Don't rely on an estimate when calculating the final prize.

6. Promote the Fundraiser Clearly

Once you're authorized to proceed, explain both sides of the fundraiser: the chance to win and the cause being supported.

Your promotional materials can explain:

• What the nonprofit does
• What the fundraiser supports
• How the 50/50 raffle works
• How to participate
• When entries close
• When the drawing takes place
• Where participants can read the complete rules

Avoid guaranteeing a particular final prize unless that amount is genuinely guaranteed under the raffle structure.

If the prize grows with qualifying ticket sales, explain that clearly.

7. Keep Supporters Updated

Where appropriate and permitted, keeping participants informed can maintain awareness of the campaign.

Updates might include reminders about the closing date, information about the nonprofit's mission, and the current prize amount if your organization can accurately calculate and advertise it.

Every update should remain consistent with your official raffle rules.

8. Close Entries at the Published Time

Set a specific closing date and time and make it clear to participants.

Once that deadline arrives, stop accepting entries according to your rules.

Reconcile the entries and proceeds before conducting the drawing. Check that your records are complete and that any invalid, cancelled, or otherwise excluded entries are handled according to your published terms.

This gives your team a final opportunity to identify discrepancies before selecting the winner.

9. Calculate the 50/50 Prize

Calculate the prize using the method stated in your rules and permitted by applicable law.

For a true even-split structure, that generally means identifying the qualifying raffle proceeds and determining the winner's applicable half.

Keep documentation showing how the final amount was calculated.

This is particularly important because the final prize may have tax reporting or withholding implications.

10. Conduct and Document the Drawing

Follow the drawing method described in your rules and any applicable legal requirements.

The exact process may differ depending on whether the raffle uses physical or permitted electronic entries.

Maintain appropriate records of the drawing, including the winning entry and the final prize amount.

Afterward, notify the winner according to the process established in your rules.

What Happens After Someone Wins?

Confirm the winner's eligibility before paying the prize.

Your organization may also have federal reporting and withholding responsibilities depending on the amount and circumstances of the winnings.

The IRS treats lottery and raffle prizes as gambling winnings. Its current instructions explain that Form W-2G and withholding requirements can apply to qualifying raffle winnings based on the prize amount and its relationship to the wager.

Organizations handling a significant cash prize should understand these requirements before the drawing rather than trying to resolve them after selecting a winner.

Are 50/50 Raffle Tickets Tax-Deductible?

Organizations should be careful about describing raffle-ticket purchases as charitable donations.

The IRS states that amounts paid for raffle or lottery tickets aren't deductible as charitable contributions.

This distinction should be reflected in communications with supporters, particularly when a nonprofit is also accepting ordinary charitable donations during the same campaign.

Can You Run a 50/50 Raffle Online?

The answer depends on the applicable laws and circumstances.

Online fundraising can make participation more convenient, but online raffle-ticket sales are not automatically permitted simply because the organization is a nonprofit.

Different states impose different rules. Some may restrict online sales or impose additional eligibility, registration, geographic, or operational requirements.

Before launching an online 50/50 raffle, determine which laws apply to your organization and participants and whether your proposed online setup is permitted.

Common 50/50 Raffle Mistakes to Avoid

A major mistake is starting the campaign before confirming that the organization is legally eligible to conduct it. Another is assuming one state's rules apply nationwide.

Nonprofits should also avoid unclear prize calculations, inconsistent ticket records, missing closing information, changing rules during the campaign, and describing raffle entries as tax-deductible donations.

Finally, don't treat compliance as an afterthought. State raffle rules and federal tax obligations can affect how the fundraiser needs to be structured from the beginning.

Run Your Fundraising Campaign With GalaBid

For organizations that are permitted to conduct an online raffle, GalaBid's US raffle platform provides tools for creating and managing digital fundraising campaigns and giving supporters a convenient way to participate.

Before launching a 50/50 raffle, confirm that the format, online entry method, and campaign structure comply with the laws and requirements applicable to your organization and participants.

Explore GalaBid's US raffle platform and start planning your next fundraising campaign.

Frequently Asked Questions

What is a 50/50 raffle?

A 50/50 raffle is a fundraising format in which the qualifying proceeds from raffle-ticket sales are divided between the winner and the organization, typically evenly, where that structure is legally permitted.

How do you run a 50/50 raffle?

Start by confirming that your organization is legally eligible to conduct one. Then establish the rules, set up an approved ticketing process, promote the fundraiser, track proceeds, close entries, calculate the prize, conduct the drawing, and document the result.

How is the winner's prize calculated?

In a standard 50/50 format, the winner generally receives half of the qualifying proceeds used for the prize calculation. The precise calculation should be defined in the raffle rules and comply with applicable law.

Are 50/50 raffles legal for nonprofits?

It depends on the jurisdiction and organization. State and local laws govern charitable gaming and can impose different eligibility, registration, prize, ticket-sale, and operational requirements.

Can nonprofits sell 50/50 raffle tickets online?

Not everywhere. Online raffle-ticket sales may be restricted or prohibited in some jurisdictions, so organizations should verify the rules that apply before accepting online entries.

Are 50/50 raffle winnings taxable?

The IRS treats raffle prizes as gambling winnings, and federal reporting or withholding requirements may apply depending on the circumstances.

Are 50/50 raffle ticket purchases tax-deductible?

The IRS states that amounts paid for raffle or lottery tickets aren't deductible as charitable contributions.

Run Your 50/50 Raffle Online With GalaBid

Ready to bring your fundraiser online? GalaBid's US raffle platform gives eligible organizations an easy way to create and manage online fundraising campaigns, promote prizes, and give supporters a convenient way to participate.

Before launching a 50/50 raffle, make sure your organization and campaign structure comply with the raffle laws and requirements that apply in your jurisdiction.

Explore GalaBid and start planning your online fundraising campaign today.