Is omaze legal

Is omaze legal DEFAULT

Omaze

Omaze is an American for-profit fundraising company which partners with charities in fundraising events. Omaze's events feature prizes, such as material goods, property, or celebrity experiences, usually with one grand prize and several lesser prizes. In order to enter the draw for the prizes, financial contributions are encouraged, with 15% to 60%[1] of the money going to the partner charity.[2][3]

The company was founded by Ryan Cummins and Matthew Pohlson in July 2012,[4][5][6] is privately owned, and is based in Los Angeles, California. The company has raised over $130 million[7] for over 350 charities,[7] including UNICEF,[8]After-School All-Stars,[9]Julia's House,[10]Product Red,[11] and Make-A-Wish Foundation.[12]

Contests[edit]

Omaze will typically launch a sweepstake that offers a grand prize or experience, with a promotional video endorsed by a celebrity. Entrants are encouraged to contribute financially to the cause, with the amount given proportionally determining the number of sweepstake entries that person receives: a person donating $100 is ten times more likely to win than a person donating $10.[13]

Sweepstake systems such as Omaze's include a "no purchase necessary" clause to avoid being classed as a lottery.[14] In the US, participants may select an "enter for free" option to receive 2,000 entries at no cost,[15] in the United Kingdom participants may submit a postal entry with no fee.[16]

Omaze released their first sweepstakes in July 2012, with the winner becoming a judge on Cupcake Wars and all entries supported Team Rubicon.[17]

In December 2015, Omaze partnered with Star Wars where people donated $10 to be entered to win the opportunity to visit the closed set of Star Wars: The Force Awakens. The experience raised more than $4.26 million to benefit UNICEF.[18] The experience launch video was a 2016 Webby Award Honoree.[19]

Model[edit]

Omaze is a privately owned, for-profit company which has two models to raise funds for charities. Sweepstake entries for a celebrity experience (set visit, dinner date, tickets to a premiere, etc.) see 60% of the money donated to charity, 25% towards fees and Omaze's costs for advertising and creating content for the event, and 15% to Omaze as profit.[1]

For prize-based experiences (like a car, vacation, or tuition), 15% goes to the charity, 70% to sourcing and shipping the prize, covering the winner's taxes, processing credit card fees, and Omaze's costs in marketing and creating content for the experience, and 15% to Omaze in profit.[1]

In the United Kingdom, Omaze gives 80% of the net profit from a sweepstake to the charity, after deducting the cost of the prize and marketing, and takes 20% as its profit.[16]

The company launched its first campaign in the United Kingdom in 2020.[2]

References[edit]

  1. ^ abc"What is Omaze? About Us & How We Help People In Need". Omaze. Retrieved 2019-06-30.
  2. ^ ab"Celebrity-backed charity platform launches in the UK — with a £1m house giveaway". Sifted. 12 May 2020. Retrieved 29 January 2021.
  3. ^Pohlson, Matt (2020-09-09). "Purpose At Work: How Omaze Reinvented Philanthropy To Unlock Exponential Growth And Impact". Forbes. ISSN 2609-1445. Retrieved 2020-09-09.
  4. ^Jansen, Monika (August 22, 2011). "Win Once-in-a-Lifetime Experiences that Raise Money for Charity at Omaze". Tech.Co. Retrieved September 6, 2015.
  5. ^Milzoff, Rebecca (February 14, 2013). "Celebrity Charity Auctions: Six Winners' Stories". Bloomberg BusinessWeek. Retrieved September 6, 2015.
  6. ^Shontell, Alyson (July 23, 2012). "Omaze Raises $1 Million So Regular People Can Experience Once-In-A-Lifetime Opportunities For $5". Business Insider. Retrieved September 6, 2015.
  7. ^ abBERNSTEIN, JILL (2020-03-10). "Meet the for-profit business model that's raised over $130 million for charities". Fast Company. ISSN 1085-9241. Retrieved 2020-03-10.
  8. ^Cummins, Ryan (2015-12-16). "How my organisation is helping Star Wars become a force for change". The Guardian. ISSN 0261-3077. Retrieved 2017-08-23.
  9. ^"Arnold Schwarzenegger Wants You To Blow Sh*t Up For Charity". Tubefilter. 2015-05-15. Retrieved 2017-08-23.
  10. ^"Robert Downey Jr raffle raises £1m for Julia's House hospice". BBC News. 2015-04-07. Retrieved 2017-08-23.
  11. ^"U2 Offer Private Concert, Make Song Title Puns for Charity". Rolling Stone. Retrieved 2017-08-23.
  12. ^"Stan Lee Tribute Event Announced". Marvel. Retrieved 2017-08-23.
  13. ^Conway, Jeff (3 December 2020). "Omaze Promotes Optimism This Holiday Season With The Help Of Charlize Theron, Ben Affleck And Matt Damon". Forbes. Retrieved 30 January 2021.
  14. ^Lindsay, Jessica (17 April 2021). "House raffles: Legit way to get on the property ladder or filled with loopholes?". Metro. Retrieved 22 July 2021.
  15. ^"Official Rules". Omaze. Retrieved 2020-11-15.
  16. ^ ab"Your Frequently Asked Questions, Answered". Omaze UK. Retrieved 22 July 2021.
  17. ^"Omaze Contest: Be A Backstage Judge On Cupcake Wars!". Omaze Contest. Retrieved 2017-07-28.
  18. ^Cummins, Ryan (2015-12-16). "How my organisation is helping Star Wars become a force for change". The Guardian. ISSN 0261-3077. Retrieved 2017-07-28.
  19. ^"2016 | The Webby Awards". webbyawards.com. Retrieved 2017-07-28.
Sours: https://en.wikipedia.org/wiki/Omaze

CA AG Brings Enforcement Actions Against Charitable Platforms Omaze, Prizeo & Charitybuzz

by Benjamin Stein

The California Attorney General quietly brought enforcement actions against charity-fundraising platforms Omaze, Prizeo, and Charitybuzz last year – alleging that each operated as a commercial fundraiser for charitable purposes without registering or filing periodic reports, as mandated by California law.

Omaze

Omaze settled the claims in January 2020. The settlement revealed that Omaze had initially entered into an agreement with the California AG on May 2019, the purpose of which was to allow Omaze to continue operations while the AG investigated whether sweepstakes run on Omaze constituted illegal lotteries. (The difference between an illegal lottery and a lawful sweepstakes hinges on whether entrants are required to offer money or other consideration to participate or whether they can play for free.)

Omaze’s 2020 settlement superseded the May 2019 settlement and resolved both the lottery-related investigation and a dispute between the parties as to whether Omaze was operating as a commercial fundraiser. Under the new settlement, Omaze will:

  • Pay the AG’s Office $90,000 (in addition to $30,000 previously paid in fees/penalties, and a $125,000 stayed penalty that will be waived after five years of compliance with the agreement) ;

  • Take a number of steps to disclose the availability of a free entry mechanism for sweepstakes offered on its platform and to ensure that those who enter using the free method are provided equal treatment with those who make a donation to participate;

  • Comply with all CA requirements related to its activities fundraising for a charitable purpose; and

  • Not misrepresent its relationship with any charity or claim that it has a fundraising relationship with any charity unless it complies with CA’s requirements for commercial fundraisers in connection with that charity.

    • Per the settlement (and Omaze’s website), Omaze provides charitable fundraising services solely to Charities Aid Foundation America (CAFA). Monies raised via Omaze sweepstakes are provided to CAFA, which in turn provides them to an ultimate charity recipient. The settlement prohibits Omaze from falsely suggesting it has a direct relationship with the ultimate recipient unless it take the steps necessary to become a bona fide commercial fundraiser for that charity.

Prizeo & Charitybuzz

On November 22, 2019, the CA AG sent cease-and-desist orders to charitable fundraising platforms Prizeo and Charitybuzz. (Prizeo and Charitybuzz are operated by the same parent company, Charity Network.)

In each order, the AG concluded that the platform had been operating as a commercial fundraiser without satisfying CA’s registration and report-filing requirements. Each platform was ordered to immediately cease all operations in California or on behalf of a California charity and to distribute all charitable funds under its control. (Prizeo is based in LA, while Charitybuzz is based in NY.) Per the order, each platform is to be fined $1000 for failure to register as a charitable fundraiser and $100 each day a delinquent report remains outstanding.

Both Prizeo and Charitybuzz appealed and requested a hearing. In its appeal, each argued that it merely operates a platform that allows charities to conduct their own fundraising sweepstakes or auctions (as applicable) and that it does not itself solicit contributions to any charity in such a way that would render it a “commercial fundraiser” for purposes of California’s law.

Each also argued that, in 2018, the California legislature considered and failed to adopt a bill that would have expanded CA’s charitable fundraiser laws to specifically address platform operators like Prizeo or Charitybuzz. Prizeo and Charitybuzz argued that this legislative history undercuts the AG’s argument that CA’s existing law regarding commercial fundraisers already reaches Prizeo and Charitybuzz. Those appeals remain pending.

Take-Aways

As noted by InfoLawGroup’s Heather Nolan in her recent Adweek article (registration required; also available on our blog), there are many considerations to account for when contemplating a charitable promotion. For any business planning a long-term charitable campaign that will rely on a third-party platform, one consideration is whether there is any reason to suspect that a regulatory or other action might disrupt your ability to proceed on that platform and, if so, whether you should explore alternatives and/or push for additional contractual protections.

In addition, the Omaze settlement is a good reminder for all sweepstakes operators (charitable or otherwise) that sweepstakes with a paid entry method not only need to offer a free entry method, but to prominently disclose its existence and to treat entries received via the free method the same as other entries (i.e., to provide “equal dignity” in sweepstakes parlance).

Sours: https://www.infolawgroup.com/insights/2020/3/31/ca-ag-brings-enforcement-actions-against-charitable-sweepstakes-platforms
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Is Omaze Too Good to Be True? Here's the Truth About the Donation Platform

Viral scams such as Fyre Fest and LuLaRoe have (hopefully) trained and educated most of us to be more vigilant and aware of what we're spending money on. Recently, one company that has been under massive speculation is Omaze, a fundraising platform that incentivizes users to donate to meaningful causes in exchange for once-in-a-lifetime opportunities. 

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Is Omaze a scam, or is it a worthwhile investment? We're doing a deep dive on the company to determine if it's legitimate, or, in the words of Holden Caulfield, if it's totally and utterly "phony."

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What does Omaze do? Is it worth our time?

As previously mentioned, Omaze is an online platform that allows people to donate however much money they would like to a wide variety of charitable causes. The site enables users to choose from a variety of major credited non-profit organizations, including UNICEF, After-School All-Stars, Julia's House, Product Red, and Make-A-Wish Foundation, which are just a few big names on the site.

According to Sifted, those who donate can win a wide variety of unreal prizes, from a game of mini golf with Bono and a game of football with NFL all-stars to a date with Idris Elba. If you aren't excited by the prospect of a "celebrity experience," however, they're currently giving away a £1m “dream home” to raise money for the Teenage Cancer Trust. 

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Is Omaze legitimate? Here's what we think about the charitable platform.

Although most of these once-in-a-lifetime experiences sound too good to be true, it seems as though the site has lived up to its word so far. According to Entrepreneur, the company has raised over $100 million for charity, and it appears that those who have entered to win these incredible prizes have been awarded them as promised. A number of celebs have advocated for it, including Daniel Craig, Arnold Schwarzenegger, and even Jennifer Lawrence.

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However, you'll want to consider the fact that Omaze takes 20 percent of the donations, as it's a for-profit organization. The company says this upfront, meaning it's not a secret or a hidden detail, but keep this in mind if you're really looking to make a difference. Donating to the non-profit directly without the possibility of being awarded one of the amazing experiences might be the better option, if you're truly looking to make a difference. 

istock

Source: iStock

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A similar organization is the All In Challenge Foundation, which is non-profit.

In April, you most likely noticed some of your favorite celebs advocating for the All In Challenge, which — similar Omaze — encourages people to donate to a variety of causes by awarding them with once-in-a-lifetime experiences like photoshoots with Charli D'Amelio or a game of golf with Tom Brady. 

The reason why you may want to consider donating to "All In Challenge" over Omaze is because it's a non-profit. According to the site's FAQs, 100 percent of your money will actually go to the charity you choose. 

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Either way, Omaze donates a certain amount of funds to charity, however, you'll want to consider that "for-profit" label before doling out your cash — a non-profit may be the better choice.

Sours: https://www.distractify.com/p/is-omaze-a-scam
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