Lottery legislation changes: how small charities can benefit
On 6th April 2016, legislation on lotteries (such as prize draws and raffles) changed to make it easier for small charities to raise funds.
Prior to the changes, if a lottery was not exempt, the charity would need to be registered with a local authority, or even hold a Gambling Commission licence for large lotteries.
However, the changes relax these rules and present new opportunities for small charities and community groups to raise funds.
The previous legislation stated that these could only be held at non-commercial fundraising events and all the proceeds must go to the charity. All tickets would need to be sold at the event itself, the result made public during the event and a maximum of £500 could be spent on prizes. Examples of an incidental lottery would be a quiz night or ‘guess the number of sweets in a jar’ competition.
The legislation has changed to:
- Allow lotteries to be held at commercial events as well as non-commerical events – for example, at a concert or theatre production where the main proceeds of the event (e.g. admission fees) go to another organisation
- Allow results to be announced after the event, enabling charities to run more diverse types of lotteries
Private lotteries include private society lotteries, work lotteries and residents’ lotteries, and the proceeds could not be donated to a charity or other good cause. However, the government recognised that often societies, workplaces and residents would want to raise money for another organisation; for example, if a member of a sports club was diagnosed with an illness and the other members wanted to raise money for a charity supporting that illness.
The main change to this legislation is that private lotteries can now be held to promote (and their proceeds given to) a charitable or non-commercial organisation.
What this means for small charities
The legislation change makes it easier for small charities to raise funds by lotteries by holding lotteries at previously off-limit events (such as commercial events), running new types of lotteries that don't require the winner to be announced during the event, and being able to receive donations from private lotteries (such as those held at sports and other members clubs).