Proceeds to Benefit Transactions
Any organization activities or events in which funds are raised for your organization are known as Proceeds to Benefit Transactions. This includes funds raised through item sales (bake sales, t-shirt sales), dance-a thons and tickets/audience participation fees or similar means. These are not tax deductible. These types of transactions should be registered as events. For more information on non-Proceed to Benefit Transactions, please see the Private External Fund Raising Activities section.
If your organization would like to hold a Proceeds to Benefit Transaction, please comply with Event Registration procedures, and submit the form to the Center for Student Involvement at least 10 bsuiness days prior to the event. The Event Registration Form must have both the organization president and treasurer signatures acknowledging acceptance of the following statement:
STATEMENT REGARDING PROCEEDS TO BENEFIT TRANSACTIONS
As officers of this recognized student organization at Cal State LA, we affirm that all proceeds raised or assets assigned will be used solely for the benefit of the organization as a whole. Further, it is affirmed that no proceeds or assets of this organizations will accrue to the benefit of any officer, member, or any private person. We also affirm that all proceeds transactions for this event will comply with all University policies and procedures including but not limited to ICSUAM Policy 3141.01 and the Cal State LA Student Organization Funds Administration Policy.
Describe the admission charge, registration, participation fee, or any proceeds that will be raised to benefit the organization. Please include how much the organization will be charging for any of these proceeds.
Should your organization have any questions on how best to hold your Proceeds to Benefits Transactions within University policies, please feel free to contact the Center for Student Involvement to review your planned initiatives and activities.
Proceeds to Benefits Checklist (10 business days in advance):
- Event Registration and Reservation Form (with completed STATEMENT REGARDING PROCEEDS TO BENEFIT TRANSACTIONS section)
- Temporary Food Facility Permit (if the organization will be selling any type of food, candy, beverage, etc.)
- Proper publicity plan
- Budget for costs and projected revenue
- Get volunteers or corporate sponsorships
Do's and Don’ts of Fundraising through Benefits to Proceed Transactions:
- Donate supplies/services as much as possible.
- Keep records of everything you do.
- Make the most of every opportunity.
- Have a goal.
- Do your homework on immediate needs and final goals.
- Get groups together before and after every event to applaud successes and to discuss strategies for problem areas.
- Use thoughtful planning - too many events are the product of an impulse.
- Think positively.
- Utilize multiple approaches to fundraising.
- Spend as little time as possible on fundraisers-they can really bog a group down.
- Make successful fundraisers traditional.
- Keep track of those that have supported you in the past.
- Let CSI know how much money you raise throughout the year so your efforts can be recognized.
- Rely totally on dues or membership fees.
- Allow fundraising to disrupt the regular business or programs of the organization.
- Ask anyone to make a donation because you "need" the money--be specific in regards to your group's needs.
- Expect too much from members--you should have fun and raise money.
- Focus on cash, in kind/operational support such as phone usage, typing services, etc. will help minimize expenses.
- Have a fundraiser based on impulse-plan carefully.
- Let the treasurer handle all the responsibility-spread it around.
- Wait until the last minute for anything -be prepared!
- Let one person completely control all the finances-have at least one more person to verify transactions.
- Forget to contact the office of Annual Giving for private external fund raising activities.
- Forget to be creative, enthusiastic, and have fun.
Prohibitions on Proceeds to Benefit Transactions
Student organizations are prohibited from conducting Proceeds to Benefit Transactions that would constittute an illegal lottery. These include sponsoring raffles, bingo or loteria games, or prize giveaways regardless of the name of the activity. Pursuant to California Penal Code (Sections 319-329), a lottery is any scheme for the disposal or distribution of property by chance, among persons who have paid or promised to pay any valuable consideration for the chance of obtaining such property or a portion of it, or for any share or any interest in such property, upon any agreement, understanding, or expectation that it is to be distributed or disposed of by lot or chance, whether called a lottery, raffle, or gift enterprise, or by whatever name the same may be known.
In other words, a prize giveaway is considered an illegal lottery if the giveaway contains the following:
- A prize;
- The element of chance;
- Consideration (payment for a raffle/bingo ticket.)
If any of these elements are missing, the giveaway is permissible. Therefore, as an example, an organization is prohibited from collecting money in exchange for a ticket to win a prize(s.)
The law specifies that any means of disposing of merchandise or property of value among persons who have paid or exchanged anything of value, whether it is called a lottery, raffle, or gift enterprise is a misdemeanor. It also holds every person who sells, gives or in any manner furnishes or transfers a ticket, chance or share liable. Likewise, persons who are involved in such activities through printing, writing, advertising, publishing or managing such activities are guilty of a misdemeanor, unless sanctioned by the state.
Only eligible private, tax-exempt nonprofit groups qualified to conduct business in California for at least one year prior to conducting the raffle may conduct raffles to raise funds (at least 90% of proceeds) for the organization and charitable or beneficial purposes in California. Additionally, a nonprofit organization, unless specifically exempted, must register with the Attorney General's Registry of Charitable Trusts prior to conducting the raffle and file financial disclosure reports on each raffle event. Whether any particular organization qualifies can best be determined by their legal counsel or by the state tax-exempt status determination letter that their legal counsel obtained for them. An organization does not become eligible merely by obtaining recognition by the University.
Student organizations are prohibited from conducting Proceeds to Benefit Transactions by means of holding yard sales on campus.