Is it legal to hold a charity raffle on the Internet?
In light of recent years, companies shifted to online digital fundraising in order to combat the limitations imposed by the pandemic. Scroll down if you want to know more!
Online raffles and lotteries are not only for the lucky ones who find the winning numbers! Many lotteries donate part of their profit to charity. Online raffles and lottery are quick ways to acquire and raise funds for the chosen charity. Raising funds digitally became more popular during the pandemic as it became impossible to do so in person and at public gatherings.
In online charity raffles, participants obtain digital numbered tickets, each of which has a chance of winning a prize. The winnings are usually a percentage of the total funds collected through ticket sales, and the remaining will go to the chosen nonprofit organization or charity.
- Online charity
- Are online charities legal?
- Cloverhut
Online charity
In most countries, part of the revenue gained from lotteries and raffles is given to the State. However, in Anglo-Saxon countries, such as the United Kingdom (UK), raffling homes make a commitment to the charity of their choice to donate part of their earnings or profit.
This way, for each amount of money spent in a raffle tickets, a certain amount, decided by the company, is donated to the partner Non-Governmental Organization (NGO). This makes it possible to finance local and national NGOs, working in fields as varied as education, health, environmental protection and other causes.
These donations are made with the hopes of preserving social links and support those who need it most. In order to avoid the misuse of the funds those associations receive, the donations are closely monitored.
The shift to digital fundraising came during recent years, and became significantly more important during the pandemic.
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Are online charities legal?
Fundraising raffles are a great way to raise money, but there are many rules and regulations that shall be followed in order for the raffle to be successful. Online lotteries and fundraisers are increasing in popularity and they are used to raise money. Not to mention, lotteries, raffles and some other competitions are forms of gambling, organisers must be aware of the relevant regulations before starting to organise such activity.
Fundraising, raffles and lotteries are all forms of gambling and they must follow the rules for the type of lottery they are running. These three fall under the scope of the Gambling Commission. Pursuant to the commision, online lotteries may not be ran without a Gambling Commission licence.
Online lotteries include: lotteries on social media, auction or selling site, fundraising platforms and live streaming platforms.
Additionally, and by means of the Gambling Commission, licences are also required to those activities which: which sell, or expect to sell more than £20,000 in tickets from a single lottery or £250,000 in a calendar year. Licences are also required to those activities that sell tickets to members of the public outside of an event or private club, to local authorities who plan to run a lottery or lotteries, and to those activing as external lottery managers for a society that holds a licence with the Gambling Commission.
Furthermore, lotteries not conducted online, such as the selling of tickets at an event, at a private society, club or to its members, at residences, workplaces or businesses and those lotteries who only take payments face to face, do not require a licence. Notably, it is important to register with the local authority if those activities sell less than £20,000 in tickets from a single loterry, or less than £250,000 in a calendar year and if you plan to sell tickets to the public in a lottery, outside of an event or private club.
Organising lotteries with non-commercial purposes is not as strictly regulated as lotteries, however, the organisers shall be well aware of the rules and procedures to follow in order to organise a successful charity raffle.
Indeed, online charity raffles are legal, however, organizers shall abide to the rules and regulations set forth by the Gambling Commission of the UK.
If you wish to know more about how to organize a charity raffle in the United Kingdom, click here.
Cloverhut
Cloverhut has recently started a partnership with an NGO, by which it is committed to donating 80% of its profits. This sum is made binding by a partnership contract with the NGO and in line with the Terms and Conditions of Cloverhut. These ensure that the donation is given to the NGO. Not to mention, a team of lawyers has reviewed the agreement and are there to make sure such statements are committed to.
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