Increasing Attendance at Annual Meetings with Raffles and Other Incentives
Dan Zimberoff
Homeowner apathy and low turnout at annual meetings is a common concern for community associations. Without the necessary quorum, official association business, including election of directors, cannot legally occur at the meeting. In response to this quandary, association boards of directors and managers often wonder what they can do to incentivize members to attend association meetings, and whether offering raffles, drawings or other prizes is legal.
Before discussing specific incentivizing methods, it might be helpful to identify a well-proven tool—proxies. The first step in increasing attendance at annual (or other) association meetings should be the use of proxies. State law (e.g., the Washington Condominium Act, Homeowners’ Associations Act, and Nonprofit Corporations Act) and nearly every condominium or homeowners’ association bylaws allow for written proxies to be used for association-wide votes. In addition to directed and general proxies, proxies solely for the purpose of obtaining a quorum can be used. Thus, associations should be sending proxies with all annual meeting notices.1
In addition to proxies, some community associations have been successful in increasing attendance at annual meetings by combining the meeting with another “fun” or community building event, such as a barbecue, spring clean-up or landscaping party, children’s scavenger hunt, chili cook off or other similar affair. If done properly to ensure maximum interest, these events have proven successful in increasing homeowner participation.
Another key to increasing attendance is to provide onsite childcare. Teenagers who live in the community are an inexpensive resource for this purpose. It is most effective if the childcare is offered at the same location as the meeting, perhaps in an adjacent room or even outside, depending on the time of year. To increase participation, the association can pay the babysitters. If an association offers this benefit, it should ensure at least one adult is supervising the childcare providers.
Some associations have found success in offering alcohol to entice adult community members to attend meetings. Though seemingly attractive, this method is fraught with legal pitfalls and is not recommended without serious forethought, reasonable limitations and legal advice.
Other than trying to influence attendance through alcohol, the next idea often proposed is to offer prizes for owners to attend association meetings. An association that is considering this option should be aware that raffles or drawings are heavily regulated in Washington by the State Gambling Commission. The legislature also has adopted strict laws for raffles, drawings, lotteries and other “contests of chance” under RCW 9.46 (the 1973 Gambling Act). In short, raffles sponsored by nonprofit organizations can only be conducted if the organization is formed for certain purposes, of which homeowner or community associations do not qualify. However, there is an exception if the participants do not pay for their chance to win. Under RCW 9.46.0209, “the conducting of bingo, raffles, and amusement games and the operation of punchboards, pull-tabs, card games and other social pastimes … are hereby authorized, as are only such lotteries for which no valuable consideration
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has been paid or agreed to be paid.” So as long as community associations do not charge a price for tickets, or require other “valuable consideration,” then the voluminous and detailed regulations and laws under the 1973 Gambling Act and licensing requirements under the Washington Administration Code (i.e., WAC 230-06) do not apply.
Though state law does not prohibit a community association from offering prizes for attending meetings, a board or manager should still review the association’s governing documents to confirm there are no express prohibitions. Many declarations ban an association from paying directors or officers for their volunteer service; yet, the author has never seen a prohibition on offering monetary incentives to owners for attending annual or other meetings.
If a board decides to offer prizes to its owners to attend meetings, it should ensure fairness and appropriateness of the compensation. Cash-value gift cards in nominal amounts could work, as well as a discount off a monthly assessment. Due to the potential for mishandling of funds, cash prizes should be avoided. Prizes could be awarded to in-person meeting attendees, as well as owners who send in their proxies. Lastly, the cost of the prizes should be included as a line item in the association’s annual budget.
When used reasonably along with other incentivizing practices, offering nominal prizes can be an effective tool to increase owner participation in community association annual meetings.
1
Proxies must meet several statutory elements, and requirements may vary depending upon a particular association’s bylaws or declaration. A detailed discussion of proxies transcends the scope of this article. Readers who have questions on the legal requirements of proxies may contact the author directly.
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