An Administrator's Guide to California Private School Law

Chapter 19 – Fundraising

C. F EDERAL L OBBYING L AW The Lobbying Disclosure Act of 1995 2462 requires registration with the federal government and quarterly reporting if an organization employs a lobbyist and expects to incur lobbying expenses of more than $10,000 in a quarterly period, as calculated under the statute. 2463 Under this law, a lobbyist is currently defined as someone who makes at least two lobbying contacts in a three- month period and spends at least 20% of his or her time lobbying. 2464 This law only applies to lobbying on federal issues, not at the state level. D. C ITIZENS U NITED S UPREME C OURT D ECISION In 2010, the United States Supreme Court issued a decision in a case known as Citizens United . 2465 The decision received a great deal of attention because of its effect on campaign finance laws. While some non-profit groups (such as 501(c)(4) issue advocacy groups) were impacted by this decision, its impact on other types of non-profit organizations, like 501(c)(3) organizations, was not directly addressed by the Court. The decision does not appear to have altered the absolute prohibition against candidate electioneering by 501(c)(3) organizations.

C HAPTER 19 – F UNDRAISING Section 1 R AFFLES

Under California law, it is generally illegal for organizations to sell lottery or raffle tickets. 2466 Generally, organizations may only conduct raffles if the raffle involves an indiscriminate distribution of tickets and participants need not pay for a chance to win. 2467 The legislature created an exception to this general prohibition to permit certain qualified tax-exempt organizations, including nonprofit schools, to hold raffles. 2468 Qualified charities and other private nonprofit organizations may conduct raffles to raise funds for beneficial or charitable purposes if certain conditions are met. 2469 A. E LIGIBILITY , R EQUIREMENTS , AND R ESTRICTIONS Qualified tax-exempt organizations, including nonprofit educational organizations, may sell raffle tickets and conduct raffles in accordance with Penal Code section 320.5. Under this statute, a raffle may only be conducted by an organization that has been qualified to conduct business in California for at least one year and is exempt from taxation pursuant to the California Revenue and Taxation Code. 2470 Private schools holding nonprofit status are tax-exempt and generally fulfill this requirement.

An Administrator’s Guide to California Private School Law ©2019 Liebert Cassidy Whitmore 599