Confirm that the organization qualifies as a charity otherwise you can violate your license while trying to do some good for your community. No one wants a $1,500 fine for donating to a charity! The organization requesting a donation must be a “charitable organization,” or “non-profit organization” – any bona fide religious or charitable organization or bona fide educational, fraternal or service organization or bona fide organization of veterans or volunteer firefighters, provided that donations to such organization are deductible for Federal income tax purposes.

Donations to not-for-profit organizations to auction or sell bottles to go (off-premises sales)

The organization should provide a copy of its one day permit to you before you deliver product (a “charitable permit”) allowing it to legally sell alcoholic beverages for off-premises consumption. The sale or auction must satisfy these five conditions: 1) contributions made by an individual donor must be deductible for federal income tax purposes; 2) the funds raised by the sale of alcoholic beverages are used for the organization’s non-profit purposes; 3) all the alcoholic beverages are in sealed containers; 4) not more than eighty cases of alcoholic beverages can be sold; and 5) the sales take place during the hours that a retail off-premises licensee in that county can legally sell the alcoholic beverage.

Donations to not-for-profit organizations for on-premises consumption at the fundraising event

Prior to delivering product, the organization should provide a copy of the event venue’s restaurant, bar or caterer’s license (and off-site catering permit if applicable), allowing it to legally sell full liquor alcoholic beverages for on-premises consumption. Please note that a not-for-profit organization can not sell/serve liquor and spirits for on-premises consumption at an event with a temporary beer and wine permit. Temporary permits exclude liquor.

Your distillery can also donate its product and serve it at your own premises with your own on-premises license. In other words, the charitable event is in your tasting room or restaurant and you don’t charge for the drinks.

No donations of alcoholic beverages may be made to a not-for-profit that holds its own on-premises license and plans to use the liquor to be served at its own licensed premises. This includes club licensees such as American Legions, Fire Departments and fraternal organizations. Such donations by a manufacturer, importer or wholesaler would be considered a violation of the gifts and services law and, with respect to liquor and wine, a violation of the price posting law. As a licensed retailer, the not-for-profit may not accept alcoholic beverages from another retailer.

Donations can, however, be made to such not-for-profit conducting an event catered by another on-premises licensee with a full liquor license. This is the case whether the event takes place at the caterer’s licensed premises or at an unlicensed location when the caterer has obtained a catering permit for the event. The alcoholic beverages may be delivered to the caterer to be held on behalf of the not-for-profit until the event is held. Any alcoholic beverages remaining after the event must be removed by the not-for-profit or the licensee that made the donation and returned to the distillery. Donations are only permitted if attendees at the event are not charged for the alcoholic beverages (an “open bar”, for example). If the caterer is going to charge attendees for alcoholic beverages (a “cash bar”, for example), the caterer must purchase the alcoholic beverages from a duly authorized licensed wholesaler or manufacturer and may not share profits from such sales with the not-for-profit organization.

Being a part of the local community and supporting local groups is a great way to build a loyal client base. Just be sure that you donate according to these guidelines to avoid being subject to a disciplinary action against your liquor license by the Authority. On another note, you’ll also want to create some internal guidelines as to how much product you can donate without hurting your bottom line.