“Rules, Rules and more rules.” I believe that was a paraphrase of a recent client. Events are a great way to fundraise because they provide an experience instead of just an object. This means that consumers are willing to spend more money than they would if they were simply buying something. We at Special Moments deal with special events on a frequent basis and over the years have discovered that there are some misnomers out there. The biggest issue we run into is when clients want to charge an entry fee and serve alcohol. Here is the scoop…if you are charging an entry fee or asking for a donation and alcohol is being served, you most likely need a permit.
It breaks down like this. Any time money is attached and you are serving alcohol, in the law’s eye you are “selling” alcohol. If you have read any of our previous blogs you might know before I am retired from law enforcement. As an owner of a catering company, my firsthand knowledge of these laws have helped many of our clients not make a big mistake. Just think of how that fundraiser would flop if your CEO got a citation for selling alcohol without a license! But it isn’t as scary as it sounds. I’ll admit it’s a bit of a painful process but once you take the steps necessary to make it all legal, you will have a very successful fundraising platform. There are two parts to the process. The first is to acquire the permit through the city and the second is to get your license from the state.
One of the major fallacies out there is that anyone can go and get a liquor license or that someone with a liquor license can supply alcohol for you. Your company or group most likely does not qualify for a liquor license. Liquor licenses are only for the premise they are housed in. Therefore unless your event is in a licensed building, your food and beverage vendor cannot bring a license with them. This includes both caterers and restaurants. The only way for your group to get a liquor license is to hook up with a nonprofit charity. It’s possible that your organization is a nonprofit and that will mean even bigger returns for you. If not, find an organization that is and offer them a great opportunity to raise money with little to no effort on their part!
Here’s how it works. The state liquor board has a special license they can issue to help nonprofits raise funds. This license is limited to a certain number of events each year. By joining forces with a nonprofit, you can have them draw the liquor license for your event. What’s in it for them? The nonprofit is required to receive 25% of the gross profit from any alcohol sales. If the alcohol is included in your ticket price, a portion of the ticket would have to be assigned toward the alcohol (must be fair market value). It really offers a winning solution for both parties. If your organization is not a nonprofit but you want to use alcohol as an incentive to raise your ticket price or as a way to enhance your event experience, this is the only legal way you can do it. For the nonprofit, they earn 25% of your alcohol sales while doing very little work to get it!
My expertise lies in the City of Tempe, but most cities have a similar process. Here’s my nutshell version of how to do this process. In Tempe, you need to head on down to the city and apply for a permit. You pay the fees, show your fencing plans to create a premise or the floor plan for a building and then attend a review process. At the review you will be required to answer any questions each city department such as Police and Fire might have and make changes if needed to gain their approval. After you receive city approval, you then must apply for a special liquor license through the state. You bring your city approval and your application down to the state office and apply for the license. Once approved, you pay their fees and walk away with your one day special event liquor license.
If that version sounds a little overwhelming, feel free to call us! We can get you through this process without you lifting a finger. As challenging as it may sound, it is really not that bad! And it will assure that no cops appear to spoil what should have been a great event!