501(c)3 Foundation holds online drawing qualified by micro-contributions

[Rafael]

Hi. I've been asked by a California non-profit foundation to design a global social media campaign that would solicit visitors to its cause site, asking them to contribute to their cause in exchange for qualifying to participate in a drawing. The drawing would award two prizes. One prize, with fewer perks, would award contributions at the $5 level. The second prize, with more perks, would award contributions at the $10 level
The prizes consist of tickets and all-expense-paid travel and accommodations to a sporting event in a foreign country, scheduled for the second quarter of 2010.

What legal basis is there for running the above-described program in California, targeting a global audience to generate contributions for the non-profit foundatio ?

 

[Michael Wechsler]

You need legal advice on this matter from an attorney. The law with regard to games of chance, e.g. lottery law, sweepstakes, etc. is different from state to state. You may have to register in one or more states and also post before the drawing. There are also issues that can arise with requirements for entry in a drawing, e.g. a purchase, which is why you see many of these contests that say "no purchase required to enter" but, if you want to enter, you need to send in a letter in the mail instead of having your chance to win on the back of a label of a coke bottle, etc. I have done a good deal of these kinds of games and frequently issues arise as to how to qualify a certain offering, e.g. a game of skill versus a game of chance, limitation of who can enter, etc. If you need professional help, feel free to use our case review or take out a support ticket or ask your own good online lawyer if you have one. Without knowing all the facts and details, I would never want to provide an answer as to what you have to do.