Nonprofit Raffles, Auctions, and Events: Why It Matters To The IRS!

The Nonprofit Show

Is your nonprofit planning a gala, auction, or bingo night? Before you book the venue or sell that first ticket, there’s one essential step you may be skipping—looping in your accounting team. In this eye-opening conversation Dan Tritch, Director at Your Part-Time Controller, issues a clear directive to fundraisers: “Talk to your accountants before you plan your fundraising event—every time.”

Dan doesn’t just talk shop—he brings real consequences to light. From misclassifying revenue to unknowingly triggering tax liabilities, organizations that treat finance as an afterthought in event planning can wind up with costly surprises. Fundraising isn’t just about generating revenue—it’s about how that revenue is earned, tracked, and reported.

Dan breaks fundraising activities into three financial stages: 1) procurement, 2) day-of-event, and 3) post-event. He warns that mishandling sponsor agreements, mislabeling advertising, or ignoring unrelated business income tax (UBIT) can derail even the most successful-looking event. That free week in a beach condo or donated diamond necklace? It may be worth more in red tape than revenue—unless properly accounted for.

And then there's gaming. Raffles, casino nights, and even simple bingo games carry serious regulatory implications that vary by state and can prompt IRS attention. Dan urges nonprofits to consult their tax accountants and state gaming authorities before launching any game-based campaign.

The episode also tackles the misperception that all earned income equals fundraising. Not so, says Dan. Ticket sales, service fees, and campaign contributions each carry distinct accounting requirements. Getting it wrong can distort financial statements and complicate audits.

Dan’s insights go beyond warnings—they’re a roadmap for success. He outlines best practices such as separating earned income from contributions, issuing accurate receipts, tracking in-kind donations, and deferring revenue until the event occurs. His message is clear: solid financial planning empowers smarter fundraising, not just safer bookkeeping.

00:00:00 Welcome and intro with Dan Tritch
00:04:45 Why fundraising events are misunderstood financially
00:05:59 What truly counts as fundraising (and what doesn’t)
00:07:41 The accounting implications of special events
00:10:08 The legal complexity of gaming-based events
00:14:13 Three financial stages of an event
00:15:01 Sponsorship vs. advertising: know the difference
00:20:30 Ticket revenue: earned income vs. contribution
00:22:58 Best practices for event accounting and receipting
00:24:13 How in-kind gifts complicate auction accounting
00:25:54 Are fundraising events even worth the effort?
00:27:32 Final advice: ask early, plan smart

#NonprofitFinance #FundraisingEvents #NonprofitAccounting

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