Million Pound House Draws for charity, are they a scam?
You may have seen the Omaze adverts on the telly…win a beautiful house worth a million pounds; proceeds from your ticket sales will go to charity.
Sounds like a great deal: the chance to become rich as well as doing good. But are these raffles/competitions a scam?
They are legal, despite the negativity they attract. Their terms and conditions paint a much blacker picture than the rosy one the presenter in the advert dangles, however. The inference that charities benefit greatly from these raffles isn’t quite true; no more than 15% of the cost of a ticket goes to a good cause. You don’t even need to buy a ticket to enter the competition—charities won’t receive anything at all from those entries.
Whilst a good portion of the funds raised from ticket sales goes towards the purchasing of the fantastic prize, i.e. the million-pound house, it also covers the cost of advertising the competition. The remainder goes to Omaze.
You could argue that the people motivated to make donations via Omaze do so because of the stunning prizes on offer, i.e. they would not otherwise donate to charity. If this is the case, good causes are surely gaining from Omaze’s raffles, aren’t they?
You may, however, feel like many others—that there’s something a little ‘icky’ about a company presenting the opportunity to gamble under the guise of doing good. Yet thousands of charities across the UK benefit from the National Lottery—the odds certainly aren’t any better for players of the Lotto or Euromillions.
When applying for grants, it’s wise to consider whether the organisation you’re approaching is a good fit for your cause. For example, some cultures do not advocate gambling, so applying for any kind of lottery money is a no-no. The same could be said of funds linked to alcohol manufacturers or pharmaceuticals. If your charity’s message is all about healthy eating, you would confuse your audience if you were to win a grant from McDonald’s charitable fund, for example.
Back to house raffles. According to Jessica Lindsay, writing for the Metro, ‘The Advertising Standards Agency has upheld a number of complaints where winners were offered far less than the stated prize amount. It has told raffle companies to be clearer in future to avoid penalties. In other instances, sites were closed down completely, with ticket sales refunded.
‘The Gambling Commission had 43 reports in relation to house ‘lotteries’ in 2017—only six of which had no further action taken against them. With so many of these competitions out there, it’s difficult for people to know which sites are fair and legitimate.’
She adds, ‘If you placed a bet at a book-makers, you’d be given the odds and have the ability to stick with those odds if you win. As with many lotteries or raffles, this isn’t the case when you enter to buy a house. The odds are dependent on how many tickets are sold.’
If you look at Trustpilot reviews of Omaze, they’re predominantly negative; however, most comments refer to what viewers perceive to be the company’s terrible television adverts, rather than the validity of their raffles and prizes. There are even claims online that the organisation’s previous winners are fabricated.
Charities chosen are ‘big name’ organisations, and it no doubt helps Omaze that a cause is well-known and likely to strike a chord with people. Omaze isn’t a not-for-profit outfit—it clearly makes good money from its raffles; if viewers knew just how much, and how little of their ticket price goes to the good cause in question, would they still buy one?
I think it’s fair to say that the vast majority of individuals entering the Omaze raffle know that donating to the charity in question directly would be a better way to support this organisation’s work. The fact that a good cause is benefitting from the raffle campaign is secondary; their first consideration is to be in with a chance of winning a million-pound house.
I have read in some of the forums I’m part of, inhabited by people working in the third sector, posts that take a positive view of Omaze. Employees from the organisations that have benefitted from their raffles speak highly of the collaboration, believing that the thousands of pounds they received were in addition to funding received from other sources.
In summary, I can understand why Omaze’s raffles seem to be a scam or too good to be true. And it probably doesn’t sit well with some people that this company (I want to make it clear that I’m using Omaze as an example–there are other companies conducting similar competitions and campaigns) makes more in profit than it donates to good causes. On the other side of the coin, even if the organiser is quids in, as long as the charity receives something, it’s still worth it.
What good cause can afford to look a gift horse in the mouth in this economy?
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