Auction and raffles are common and successful ways for non-profit organizations to raise funds. To help makes these event successful, organizations often ask for donations to be used as auction and raffle items. The accounting treatment for these donations is dependent on whether the item is used for the auction or raffle. The organization should keep record of all items received and the type of fundraiser the donation was used for to ensure proper accounting treatment is used.

Auction Items

The organization receives a donation valued at $3,000. At the time the donation is received the following entry can be made:

If the item is sold at auction for $5,000:

If the item is sold at auction for $2,000:

Raffle Items

The organization receives a vacation package that is valued at $3,000. The vacation is raffled off. Raffle tickets are $50 per ticket. At the time the donation is received the following entry can be made:

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150 tickets are sold for the raffle for a total contribution of $7,500:

50 tickets are sold for the raffle for a total contribution of $2,500: