Q: What should ministries consider before awarding prizes in a ministry promotion?

If your ministry is considering hosting a bingo night, for example, your ministry may need to register as a bingo hall. Ministry leaders also should clearly prohibit any side betting. Such activities often constitute illegal gambling.

Before hosting any type of promotion, be sure to talk to a local attorney to help develop a set of rules that meets state and federal guidelines.

Follow the Rules

Most states require sweepstakes and contests to have an official set of rules. Provide a copy of the rules to every person who enters your promotion. You also should post the rules in an easy-to-find location for all to view at any time.

Official rules should include the following information:

• Who is eligible to participate in the promotion—minors and those who are not residents of the state in which the ministry is located are usually excluded. Often additional laws may apply to these situations.
• The value of the prize—prizes that have a retail value of more than $600 may require the ministry to issue a 1099 tax form to the winner.
• How long the promotion will last and the deadlines for submitting entries.
• The legal responsibility of the ministry, including a statement releasing the ministry from any liability associated with the outcome of the promotion. This release of liability can help protect the ministry from lawsuits brought by participants.
• The ministry’s name and complete contact information.

Other important provisions that you might add to the official rules of your ministry’s promotion are a “no purchase necessary” statement and the location where the list of winner’s names will be displayed. If your ministry will be incorporating a social networking site into its promotion, also consider the promotion guidelines of the social network you are using. 

Before hosting any type of promotion, be sure to talk to a local attorney to help develop a set of rules that meets state and federal guidelines and ensure that your ministry’s promotion complies with applicable law.

For further information about ministry-sponsored promotions check out the following resources:

• Sweepstakes, Doorprizes, and Raffles: Are Your Church Fundraisers Legal?
• A Closer Look at Promotional Activities

*Important information: Brotherhood Mutual is pleased to provide Legal Assist as a complimentary resource. The services we offer through Legal Assist are intended to provide general legal information to our current and prospective policyholders.

The information we provide is intended to be helpful, but it does not constitute legal advice and is not a substitute for the advice from a licensed attorney in your area. Accordingly, no attorney/client relationship is created through this process, and no legal advice will be provided. We strongly encourage you to regularly consult with a local attorney as part of your risk management program.