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I think I'm starting a new charity...?

UNCjigga

UNCjigga

Lifer
Okay, I randomly got the idea of starting my own charitable foundation. I have zero experience with any of this, but I'm committed to making this idea work. I want to raise money for poor students who do well in school but don't have access to the technology they need to pursue their dreams. Plenty of good, established, trustworthy organizations already exist so my organization would really be a 'front' for one of these.

Here's the basic premise (I'm sure this has been done before...or has it?):

Donor goes to build-a-dream.org website and is presented with the current 'Project' (currently only have plans to run one 'Project' at a time but later would want to do two or three.) A 'Project' lists the current charity that has been selected for a donation and a target goal for raising money (probably within the $5,000 to $10,000 range.) Donor can pledge anywhere between $1 to $1000 or more (I'm planning this to be a PayPal thing I guess...are there any issues with this I might not be aware of?)

Benefit to the Donor:

Depending on the level of contribution, the donor is entered to win a number of prizes good towards construction of the ultimate Dream System. Example: Billy donates $1-$10, Billy is entered to win one of many new MX500 mice from Logitech. Sue donates $20-$50, Sue is entered to win a new Microsoft Bluetooth Wireless desktop combo. Then we get into video cards, cases, and various other components. Donors who pledge $100 or more are entered to win a complete Dream System worth $2500 or more. The prize winners will be randomly selected from the pool of donors and prizes will only be given out once the goal for the Project is reached. Obviously, this site is geared towards giving the elite in the tech community a chance to give back to those who are just as interested in technology but are not able to afford even the basic hardware and software they need for school or higher education.

Currently I plan for this site to be advertiser supported as well. The donors I want to reach are professional IT types with money to spare (*cough* PAB *cough* Windogg!) and I'm sure component manufacturers and online stores would love to advertise their products and specials on the site. Perhaps they can even contribute some stuff for the prizes or for direct donation to one of the charities.

Normally people don't post business plans or whatnot in a forum because they don't want their ideas stolen. Well, for one thing, I haven't fully researched this and I don't know if its my idea to begin with. Second, I'd LOVE for someone here to steal this idea and make something of it (as long as its not for profit!) I'm just confused about how to legally get this off the ground. Since this is not a direct charity (only makes donations to other charities) is it still considered tax-exempt? Will donors get a credit for making the donation? Will advertisers be able to write-off some of their ad expenses or their contributions of goods?

Any help is appreciated...
 
Interesting idea. There might be a problem with the "gambling" aspect of it though. Technically raffles are illegal in many places.
 
Originally posted by: Demon-Xanth
Interesting idea. There might be a problem with the "gambling" aspect of it though. Technically raffles are illegal in many places.
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Even if its for charity? We used to have 'casino nights' in our dorms where all the proceeds went to charity.
 
Originally posted by: uncJIGGA
Originally posted by: Demon-Xanth
Interesting idea. There might be a problem with the "gambling" aspect of it though. Technically raffles are illegal in many places.
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Even if its for charity? We used to have 'casino nights' in our dorms where all the proceeds went to charity.
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Just because something happens frequently at college doesnt mean its legal....
 
Some observations:

yes, items donated for the raffle are tax deductable anywhere in the US.
however, raffles - even online ones - are not legal everywhere in the US.

if you build up enough interest, Visa or Mastercard would handle the transactions as a loss leader and therefore tax deductable for them (especially if have just one as the official credit card sponsor). Use paypal as a secondary option like check or money order.

an idea would be to have webspace dedicated to each item and blurbs about the donating company. that way they get googled beyond their own website and show up as "kind, caring company." That kind of advertising is only as expensive as the item (or service, perhaps? e.g. 6 months DSL access?) donated.


And you need some companies to donate money for day-to-day operations of the website. Namely 5K a month for me to act as "senior community relations manager." I clean up really well and look good on TV.
😛
 
The thing about charity raffles: Someone has to care enough to stop it.

It's kinda like a non enforced no parking zone infront of a store. Until someone complains, the cops won't do anything. And charities generally get alot of legal leeway.
 
Originally posted by: TwinkleToes77
Originally posted by: Qosis
Originally posted by: Scarpozzi
An example of a successful Charity!!!
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I wanna beat the hell out of that guy..

Stupid mooches.
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Who's more stupid? Him for making the site and trying to get ppl to pay his debts, OR the ppl who actually are paying his debts for him??

I suggest the latter.
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ayup...makes me think long and hard about doing something similar. At least I'd have to add I'd take a programming job offer over cash, though 😉
 
Originally posted by: ANY5546
Just because something happens frequently at college doesnt mean its legal....
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Ain't that the truth. But seriously, I should still be able to do this as long as I put a small print disclaimer along the lines of "participating in the Build-A-Dream fund may not be legal in some states...", but I really don't want to do that. Am I going to need a lawyer for this (pro bono?)

 
Just wanted everyone to know I was serious. I already registered the domains and such. Methinks I'll be leaving my job shortly...
 
First off, IANAL.

But technically if you require people to spend something to enter a drawing, you are running an illegal lottery. That's why most charity raffle tickets say "Donation $2". You cannot require a donation to enter the drawing, and would have to have a way for people to enter without donating. One way would be to have them send a postcard with their name, address and phone number to a PO Box somewhere, limit one entry per person. That would be enough to discourage most freeloaders. You could say people get one entry for every dollar they donate, which might increase the giving.

For people to be able to deduct contributions, your organization would have to be recognized as a tax-exempt organization by the IRS. It's not enough to just say "it's for charity". Same for items contributed to the raffle. Those are the "official rules". I'm sure there are people out there who deduct contributions to outfits which aren't recognized by the IRS, though.

I do not want to discourage you in any way, as you have a great idea. But from the practical side, it might be a whole lot easier to find an existing organization that has the same goal, and approach them with your idea to see if they will lend their name to it. They will of course have the final say on where the money goes, but if you share a common goal that shouldn't be a big problem.
 
Originally posted by: kranky
First off, IANAL.

But technically if you require people to spend something to enter a drawing, you are running an illegal lottery. That's why most charity raffle tickets say "Donation $2". You cannot require a donation to enter the drawing, and would have to have a way for people to enter without donating. One way would be to have them send a postcard with their name, address and phone number to a PO Box somewhere, limit one entry per person. That would be enough to discourage most freeloaders. You could say people get one entry for every dollar they donate, which might increase the giving.

For people to be able to deduct contributions, your organization would have to be recognized as a tax-exempt organization by the IRS. It's not enough to just say "it's for charity". Same for items contributed to the raffle. Those are the "official rules". I'm sure there are people out there who deduct contributions to outfits which aren't recognized by the IRS, though.

I do not want to discourage you in any way, as you have a great idea. But from the practical side, it might be a whole lot easier to find an existing organization that has the same goal, and approach them with your idea to see if they will lend their name to it. They will of course have the final say on where the money goes, but if you share a common goal that shouldn't be a big problem.
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Aha, I forgot about the "no purchase required to enter drawing" rule (haven't eaten cereal lately.) I like the postcard idea. And I definately agree with what you said about doing this through an established organization (so I don't have to waft through all this IRS paperwork.) I'm gonna do my homework tonight on organizations with similar goals...
 
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