First of all, I just want to clarify that the Home Kitchen Operation law is only in a select few counties. If your county is one of the ones that allows homemade baked goods to be sold under that law, then I’d assume that you would still have to package and label the product. The reasons for packaging and labeling are based on health and safety concerns… it doesn’t really matter if there’s a price tag or not. If you cannot sell homemade food under that law, then it’s probable that you also wouldn’t be able to give it away for free.
However, there is probably an exemption for offering baked goods at fundraisers, and the packaging and labeling rules probably wouldn’t apply there. You should talk to the health dept about trying to use that exemption to get around packaging and labeling. http://forrager.com/faq/#nonprofit