Charitable Solicitation and Fundraising Law in Ohio: Raffles, Online Giving, and Donor Agreements

Quick Summary: Fundraising is a regulated activity in Ohio, not just a program expense. Charities must register with the Ohio Attorney General before soliciting donations under Ohio Revised Code Section 1716.02, raffles must follow specific rules under Ohio Revised Code Section 2915.092, and donor-restricted gifts are governed by Ohio’s version of the Uniform Prudent Management of Institutional Funds Act. Ohio Legacy Law helps Southwest Ohio nonprofits plan raffles, galas, and online campaigns that raise money without creating legal exposure.

Fundraising Is Where Charities Meet the Public — and the Law

More nonprofits interact with Ohio regulators through fundraising than through any other activity. A gala, a raffle, a crowdfunding campaign, or a single generous donor’s gift can each trigger legal requirements that most volunteer event committees have never heard of. The good news is that Ohio’s fundraising rules are not complicated once you know where to look.  The mistakes we see almost always come from not knowing the rule existed, not from an unreasonable law.

Registration Comes Before the Event, Not After

The foundational rule of Ohio charitable fundraising is registration. Under Ohio Revised Code Section 1716.02, any organization that intends to solicit contributions in Ohio must file a registration statement with the Ohio Attorney General’s Charitable Law Section before it solicits — not after the first fundraiser wraps up. This applies whether the solicitation happens door-to-door, by mail, online, or through a single fundraising event. Organizations must then refile annually by the fifteenth day of the fifth month after the close of their fiscal year. A brand-new nonprofit planning its first fundraising gala should confirm its registration is active well before invitations go out.

Running a Raffle Legally

Raffles are one of the most popular and most misunderstood fundraising tools available to Ohio nonprofits. Under Ohio Revised Code Section 2915.092, a 501(c)(3) organization may conduct a raffle without obtaining a license and may keep 100% of the net proceeds for its own charitable purposes. Other tax-exempt organizations permitted to conduct raffles — including 501(c)(4), (c)(6), (c)(7), (c)(8), and (c)(19) organizations — must distribute at least 50% of net raffle profit to a charitable purpose or to a government entity, keeping the remainder for their own use. A few points apply across the board regardless of organization type: only eligible tax-exempt organizations, schools, and certain veteran and fraternal organizations may conduct raffles at all, since businesses and individuals are prohibited from running raffles in Ohio; no state license is required, but the raffle must still comply with Ohio Revised Code Chapter 2915 in its entirety; expense and prize records must be retained for at least three years; and no one may be paid to conduct the raffle or any other form of charitable gaming.

Confirming which category your organization falls into and whether the 50% distribution rule applies… BEFORE printing raffle tickets avoids an awkward correction after the drawing.

Online Giving and Crowdfunding

Online giving platforms and crowdfunding campaigns have made fundraising faster, but they have also introduced new points of legal exposure. Before launching a campaign, a nonprofit should confirm three things: that the platform’s fee structure is disclosed to donors so they understand how much of their gift reaches the organization; that the platform issues (or the nonprofit itself issues) proper donation receipts for tax purposes; and, most importantly, that the funds are flowing into the organization’s own registered bank account rather than a personal account set up “on behalf of” the charity by a well-meaning volunteer. That last point matters enormously, funds raised through a personal account can create both tax complications for the individual and difficulty proving the money was ever properly received by the charity at all.

Honoring — and Occasionally Modifying — Donor Restrictions

Major gifts often come with strings attached: a donor gives $50,000 “for scholarships only,” or establishes an endowment where only the investment income can be spent. Ohio’s version of the Uniform Prudent Management of Institutional Funds Act, found at Ohio Revised Code Sections 1715.51 through 1715.59, governs how a charity must manage and invest these restricted and endowed funds, requiring the same good-faith, ordinarily-prudent-person standard of care that applies to board decisions generally. The statute also sets out a limited process for releasing or modifying an outdated restriction.  For example, if a scholarship fund’s original purpose becomes impossible or impractical to carry out, but that process requires either donor consent or, in some cases, court approval; a board cannot simply decide on its own that an old restriction no longer makes sense.

A Simple Pre-Event Checklist

Before the next gala, raffle, or major campaign, a board should be able to answer: Is our Ohio charitable registration current? Does our raffle plan match our tax-exempt category’s distribution rules? Is our online giving platform depositing funds into our own registered account? And do we have a written gift-acceptance policy that spells out how we will handle a donor-restricted gift before the first one arrives?

Serving Nonprofits Across Highland, Brown, and Adams Counties

Ohio Legacy Law helps development staff, event committees, and boards throughout Hillsboro, Greenfield, Leesburg, Georgetown, Ripley, Mount Orab, Fayetteville, West Union, Winchester, Peebles, and Manchester plan fundraisers and draft donor agreements that hold up to scrutiny long after the event is over.

Schedule Your Fundraising Legal Checklist Today

If you are planning a raffle, gala, or major campaign — or need a gift-acceptance policy before your next big donation arrives, call us at (937) 402-2348 or email jim@southwestohiolaw.com to schedule a consultation.

This article is provided for general informational purposes and does not constitute legal advice. Fundraising and charitable gaming requirements can change and depend on an organization’s specific tax-exempt category — consult an attorney before launching a new fundraising activity.