Governor Signs Correa Bill to Aid California Non-profit Organizations

NOTE: The following press release was sent from Senator Lou Correa’s Sacramento office.

FROM FILE: State Senator Lou Correa and supporters presenting Senate Bill 200.

FROM FILE: State Senator Lou Correa and supporters presenting Senate Bill 200.

SACRAMENTO, CA – Today Governor Schwarzenegger approved Senate Bill 200, authored by Senator Lou Correa (Orange County). SB 200 will allow California non-profit organizations to announce and advertise raffles on the internet and strengthen the existing prohibition in the law regarding the actual sale of raffle tickets over the Internet.

SB 200 had no “no votes” in the Legislature, is sponsored by the Ocean Institute of Dana Point, and supported by the following organizations: American Legion Department of California; Bonnie M. Dumanis, District Attorney of San Diego County; California Association of Nonprofits; California Outdoor Heritage Alliance; City of Dana Point; City of San Clemente; City of San Juan Capistrano; Community Action Partnership of Orange County; Dana Point Chamber of Commerce; DesertArc; Huntington Beach Chamber of Commerce; Irvine Chamber of Commerce; Irvine Public Schools Foundation; Laguna Niguel Chamber of Commerce; Maritime Museum of San Diego; Palos Verdes Art Center; Patricia C. Bates; Orange County Board of Supervisors; Ronald McDonald House Charities Northern California; Ronald McDonald House Charities of San Diego; and, Yerba Buena Center for the Arts.

Many non-profit organizations use raffles to raise money to fund their programs and to offer classroom size reduction.  State law requires that they cannot spend more than 10% (90-10 rule) of proceeds on administration.  Thus, advertising over the internet (an inexpensive advertising option) becomes critical for these non-profit organizations as they try to raise money using raffles.

AlthoughCalifornia state law regulates raffles conducted by eligible organizations for beneficial or charitable purposes, it also prohibits a raffle from being advertised over the Internet. However, many organizations are unaware of this law provision. Last year, the Attorney General notified approximately 20 non-profit organizations that they appeared to be in violation of state law.

Trying to navigate the complicated laws regulating the charitable raffles can drive legal fees up for non-profit organizations, meaning less money going to programs.

“SB 200 will help these organizations hold down legal fees, stay within legal boundaries and lower advertising costs. SB 200 also contains provisions that strengthen the prohibition of the actual sale of raffle tickets over the Internet. This will discourage fraudulent online raffles and protect legitimate no-profit organizations from being targeted by scammers,” said Senator Correa.

For many educational and non-profit organizations, raffles are the backbone of their program funding. Most of these raffles are for big ticket items, such as homes or cars. In order to reach the largest number of potential ticket buyers and provide readers with a Web site address where they can get more information, the raffles often need to be advertised in newspapers, magazines, or newsletters.  Expensive advertising campaigns can be discouraging and must be held in check by these organizations.

“Internet advertising is the most cost-effective way to advertise a charitable raffle. Schools need low-cost ways to reach a wide audience. SB 200 bill will make raffles easier and more cost affective,” said Tim Shaw, former CEO of the Irvine Public Schools Foundation.

According to the Ocean Institute of Dana Point in California, each year more than 100,000 students participate in the Ocean Institute’s National Award Winning Programs. More than 40 percent of these students are from low income areas. The home raffle helps to support these programs. “Many of these students have never seen the ocean before, and their participation in our programs is a life-changing experience for them,” stated Daniel Stetson, President and CEO of the institute and sponsor of this bill. “Advertising our raffles in the internet not will only help us to raise the much needed funds, but also will increase awareness of our programs,” Mr. Stetson concluded.

Other organizations, such as The American Legion, founded in 1919 and representing over 135,000 members in California who served in wartime, utilize raffles to raise funds for their programs, which help to provide services for veterans and their dependents. “We supported SB 200 because it would allow us to use the internet to advertise raffles to a broader audience at low- cost and raise funds to provide services that continue to grow as our veterans return for Afghanistan and Iraq,” stated Pete Conaty, legislative representative of this organization.

Senator Lou Correa represents the 34th District which includes the cities ofAnaheim, Buena Park, Fullerton, Garden Grove, Santa Ana, Stanton and Westminster.