Avoiding Three Licensing Mistakes Which Could Shut Down Your Benefit Auction

By Sherry Truhlar

When I worked as an event planner, I would have been mortified to inadvertently overlook a detail which could have shut down my event. With so many rules to follow from municipal, state, and federal bodies, it can be hard to stay on top of details.

Licensing varies greatly from location to location, but here are three common licensing issues I see in the four areas I most often work: Florida, Virginia, Maryland, and the District of Columbia. I’m not an expert in licensing, so always check with your local and state government to learn what is applicable for your situation.

#1: A License for the Raffle Many states have regulations around raffles, sweepstakes, and contests.

My Washington, D.C. charity auction clients have debates as to whether they want to involve themselves in the raffle licensing laws. When an organization secures a raffle license, it must follow rules affecting advertising, the number of tickets sold, and even the time of the draw (because an official will come onsite to witness the draw). In contrast, a sweepstakes – like a raffle – allows for a drawing and for prizes to be awarded, but there is no requirement that a guest pay for the ticket.

I know of one school fundraiser which conducts a sweepstakes to avoid the hassle of raffle rules. They ask guests to enter the sweepstakes, but since they can’t sell the tickets, they encourage donations. Most guests do make at least a $5 donation, but a donation isn’t required to win a prize.

#2: A License to Serve Alcohol Are you paying a company to manage the alcohol? Or was the wine donated and your volunteers are serving it? Are underage students handing out glasses of champagne? Is there a difference between serving hard alcohol versus wine and beer?

There are so many variations on this single area. I suggest you call your local authorities and check on the rules.

#3: A Licensed Auctioneer At this point, some of you are thinking, “Are you kidding me? You need a license to be an auctioneer?”

The answer: Yes, no and sometimes. It varies by area.

In Virginia and Florida, a license is required. If a person accepts any sort of payment for calling a benefit auction (“payment” could be as simple as a meal), an individual is required to have an auctioneer’s license. The penalty for conducting an auction without a license is a $2000 fine.

To secure my license, I had to attend an approved school (I attended a course in Missouri), pass a state-administered test, and secure a bond. Now I must keep up with continuing education requirements. The process is similar to that of getting a real estate license.

In Washington, D.C., the laws are relaxed. Virtually anyone can walk into the municipal building and — about $800 later — walk away with an auctioneer’s license.

A potential caveat: If you are holding your auction in an embassy, you are on “foreign soil.” You would then abide by the rules of that country.

In Maryland, licensing varies by city. When I work an auction in Anne Arundel County (such as Annapolis), I must pay a $250 fee. The City of Baltimore has a similar law.

I’ll be honest: It’s confusing, complex, and costly. I will spend several thousand dollars this year in licensing, but it’s important to your event. Here’s an example why:

A colleague of mine was working a benefit auction in a museum in Washington, D.C. Shortly before he was to perform, he was approached by the police. They asked to see his auctioneer’s license. If he had not produced it, they would have escorted him out. Can you imagine how embarrassing it would have been to the non-profit, if he’d not been licensed? The entire fundraiser — 9 months worth of work — could have been in jeopardy.

Keep these points in mind as you plan your event. Because laws change, it’s worth a phone call or two to ensure you’ve covered your bases.

If you’d like more free benefit auction ideas, get Sherry Truhlar’s free Auction Item Guide. The Guide features 100+ of the top-selling items Sherry sold in benefit auctions around the country last year. Sign up at http://www.RedAppleAuctions.com

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