I’m confused on how the person that is hosting a charity event would make their money. For example: Let’s say someone’s hosting a casino charity event, and all the money that the people loose goes to the cause. So how does the person that host’s the event make any money? Or doesn’t he? Does he just do it to get brownie points for his karma? But then how do big charity organizations make their money, who pays them?
The person operating the event is a volunteer and 100% of money raised goes to the charity or they are a professional fundraiser that contracted with the charity for a percentage of the proceeds.
Some take as much as 60%
If a person hosting an event makes money then he is not involved in charity work, he is a promoter. Some are professional fundraisers who charge a fee and are worth their pay, some are hustlers who prey on the good intentions of others.
Some volunteer their time because they are spiritually motivated.
In any case, there are expenses that must either be “taken off the top” of the funds raised, or underwritten by an individual (rent, electricity, for example). Big charities make investments in the stock market and sometimes collect large, tax deductible donations from big business.
I belonged to a non-profit organization. We built our own gaming tables after renting them one time. Later, we could charge a fee for other charitable causes to use them. The fee they paid went back into good works instead of someone’s pocket.
Our group helped(volunteered) for another non profit group (waited tables, ran the tables, etc) at a casino night. We agreed at the beginning that our non profit would receive a flat rate of $200 for our helping out; the non -profit took enough to cover rental of the equipment but the people wouldn’t be getting paid.
That way the majority of the money is given to the charity.
The host doesn’t make money.The host rents the stuff, buys the food, puts on the event. All costs are paid from the profits. The rest is donated to charity. Remember, that casino night is gaming so you also have to have a license.
a casino always makes money for the house. A charity event would in that event make money
I have done this type of work before not only because I love to volunteer but also because I was asked to by my employers. What usually happens is that the person/group that hosts does not MAKE money but they recoup/deduct expenses and donate the surplus. So you may rent/own the casino set up, but because you are doing it for charity, the person who rents (or sells at a DEEP discount) the equipment to you may deduct the loss at the close of the tax year. The location is usually free or cheap as well (again if they let you use it for free the cost that they would have made is now tax deductable). Servers/workers are usually easy to come by if you go to a local college. If you find a sorority, fraternity, organization and let them know that this is volunteer work, since most colleges actually make it mandatory that organizations volunteer a specific amount of time to community based work to maintain active status, they are willing to do it.
As for the person who actually works the event, (makes phone calls, sets up, coordinates, etc.) if they are doing it for an employer, they are paid by their company but not off of the proceeds from the event participants. If they are doing it independently (out of the goodness of their heart) they may recoup or deduct the expenses that they incurred (traveling, food, printing promotional materials, etc.) but no more than what they spent (they MUST provide all receipts). Failure to keep accurate records will lead to consideration of fraudulent collection which is monitored by way of the Internal revenue service (in the US anyway) and track able through charitable contribution tax forms. If you recoup your expenses from donations without proof of what you spent (receipts) and how it contributed to the success of the event/organization you open yourself up to the possibly of being audited. If you are found to be fraudulent by what the IRS finds you face being charged with charity fraud by the FTC which is punishable by anything from repaying the money (and tarnishing your name) to jail time (I know someone who ran an organization, did not keep receipts, recouped costs and served 3 yrs jail time for it).
As for who pays charitable organizations operational fees, some get paid for services other than what they are known for. So maybe I do volunteer work but I may also rent out space in my building for a small fee. Some do what is called a requisition to pay bills. So if I have a gas bill for my building I would fill out a requisition form and send it to a larger organization that has agreed to pay our operational expenses. Some join up with places like The United Way and solicit for donations every year with the expressed purpose of covering operational costs. These organizations really run by the skin of their teeth so to speak and it’s a month to month thing. Employees are paid but (other than the manager) most are part time so they do not get benefits or get paid full time salaries which keep costs down. The most important thing is to not make an excessive surplus or you could lose your tax exemption status. This can usually be avoided as long as you are doing the right thing and using the money for operational expenses and not paying employee bonuses or elaborate gifts to members of the board.
A lot of times if you are just truthful with the vendors they are willing to help and give things away so you pay little if anything. Most require that you compile a letter stating the intentions of your event/organization and where the money will go (info for organization including tax exempt number so it can be verified). Most companies are extremely generous in helping out.
Here is a list of donations that I have received from organizations for charitable purposes (for my employers):
Extravagant tea set (3 ceramic kettles, service for 16)-was for tea party promoting self esteem for inner city girls in a city with a 53% teen pregnancy rate found to be directly related to self assessment in girls 15-18 yrs of age.
3 yr commitment of free casino rental equipment (casino night is fun!)
Various venues. Never paid for a spot once
Clothing donations (suits, dresses, shoes) for women and men trying to get back into the workforce and off of public assistance.
Resume consultations and printing
Hair Cuts/styling (for children going back to school that can not afford a simple hair cut)
Medical exams/vaccinations
Portraits by professional photographers
Party platters
Promotional material printing (was free for first 300 then had to pay for additional but it helped)
That’s all I can think off the top of my head and I know I gave a lot of info but this is what I like to do and talk about. Hope it helps!