Don’t Forget to Register Your Raffle with Form CT-NRP-1. The California Attorney General monitors charities to ensure that their assets are used for charitable purposes only. This article discusses some of the details to note when filing California Registry of Charitable Trusts Annual Registration Renewal Form RRF-1, which all California charities must file in addition to Internal Revenue Service (IRS) and California Franchise Tax Board (FTB) filings.
California nonprofit organizations must attach a copy of the appropriate IRS Form 990 series with the Form RRF-1 filing.
The gross receipts and assets determine which form of the 990 series these entities file with the IRS:
- Form 990: Public charities with gross receipts of at least $200,000 or assets of at least $500,000.
- Form 990-EZ: Public charities with gross receipts between $50,000 and $199,999, and assets less than $500,000.
NOTE: Small charities with less than $50,000 in gross receipts can file a Form 990-N, sometimes called an “e-postcard” or simply a “postcard.” The 990-N is available online only for conforming nonprofits (<$50k in receipts) that file their tax forms electronically. These small charities must attach Form CT-TR-1 (Annual Treasurer’s Report and Instructions) to Form RRF-1. Form CT-TR-1 is attached in lieu of Form 990-N e-Postcard, which does not contain all the information needed by the attorney general’s office.
All private foundations, regardless of size, file Form 990-PF with the IRS. Foundations with gross receipts less than $50,000 are not required to file Form CT-TR-1 and, instead, must attach Form 990-PF with the Form RRF-1.
Raffles – Registering And Filing Requirements
Raffles often generate extra money for the nonprofit and they are an exciting and fun way for the audience members and donors to be even more supportive of their favorite cause. But remember that entities conducting raffles have additional reporting requirements with the Registry of Charitable Trusts.
- The organization must be in good standing with the IRS, Franchise Tax Board, and Registry of Charitable Trusts for at least one year, after which they must file Form CT-NRP-1 to register the raffle.
- Once the nonprofit has received approval (it must be in the form of a written confirmation of the raffle), the entity must file Form CT-NRP-2 annually to report raffle activity during the calendar year.
PLEASE PLAN AHEAD! Approval for the raffle can take 60 DAYS or more.
- Entities should be aware that at least 90% of the gross receipts from raffle ticket sales must be used for the organization’s charitable purposes.
You may have heard of some places doing a 50/50 split (half to the organization and half to the raffle winner) with the raffle proceeds. This 50/50 split, while popular, is not in compliance with the state’s requirements. Detailed regulations relating to raffles are located on the California Attorney General’s website: https://oag.ca.gov/charities/raffles.
Charitable organizations do a lot of good for society. They often allow us to meet medical needs both domestically and internationally, feed and clothe people here and around the world, help our youth, support environmental and animal causes, and much more. The state and federal government want to ensure that the funds for our favorite causes are handled properly. Knowing which forms to file makes it easier to comply.
Please let us know if you need help with these. LSL CPAs would be glad to answer any questions.