SINGAPORE - A new social enterprise is raising money for charities by enticing donors with a lucky draw that offers such luxury prizes as cars or even private apartments in future.
Its move has, however, triggered the concern of the authorities, with the Commissioner of Charities (COC) saying it is looking into the matter.
Launched on Wednesday (Aug 29), homegrown social enterprise The Given Company (TGC) conducts donation draws on its website, where donations made towards its selected charities will give donors the chance to win prizes like a Mercedes Benz car.
The next day, the COC office issued a statement saying that it drew TGC's attention to relevant legislative requirements. In particular, the requirement that fundraisers have a written agreement with the charities before soliciting funds.
The statement also said the COC has not endorsed TGC's operating model and urged donors to be discerning about such online appeals.
But TGC's co-founder Charles Tan, 33, who had worked at financial services company Cantor Fitzgerald, said he believes his enterprise has abided by all relevant legislative requirements.
"We understand that our operating model is relatively new in Singapore and it may therefore take some time before it gains mainstream acceptance," said Mr Tan, who noted that TGC has written agreements with the four charities listed on its platform.
The charities include Society for the Prevention of Cruelty to Animals (SPCA) Singapore, Alzheimer's Disease Association, Life Community Services Society and The Rice Company Limited.
Mr Tan started the enterprise with his wife Cao Xin Xin, also 33, who was formerly working in investment banking.
He said donors have the option to donate to charities other than the four listed ones, adding that he does not believe this counts as soliciting for donations for the other charities.
He claims TGC's methods could be a more sustainable form of fundraising as it is a win-win situation for both donors and charities.
Also, organisations like the Singapore Children's Society had conducted similar charity raffles, he said.
"We want people to get to a stage where they are giving unconditionally and volunteering their time and money, but we take the view that sometimes people need a nudge, so that's all we're trying to do," he added.
For the first draw, donors can buy a T-shirt from the website for $20, to claim a ticket for the lucky draw. The prizes are worth more than $180,000 in total, including a new Mercedes-Benz CLA 180 Coupe which sells for about $160,888, and cash prizes ranging from $8 to $10,000.
The company plans to take a commission of about five to 10 per cent from each donation for subsequent draws, to help pay for the prizes and other operating costs.
People in the charity sector have expressed some concern about its methods.
Ideally, donors should be motivated by genuine care for the cause, said Mr Jeffrey Tan, National Volunteer and Philanthropy Centre's director for knowledge and advocacy.
"Our research shows that while big tempting prizes might garner a sudden influx of funds, it does not change the mindset of givers as the focus is on the prize rather than the impact they will make," he added.
Similar efforts in the past have fallen out of favour, said Singapore Children's Society's chief executive officer Alfred Tan, who cited the National Kidney Foundation (NKF)'s fundraising efforts in the 2000s.
NKF had also made use of lucky draws to bait donors with prizes like private apartments, but people protested against the idea of donating money for the prizes, he added.
Donors may be put off by this method of donation, as their good intentions can be misread as them wanting the prizes instead, said Mr Alfred Tan, who noted that charity raffles are not the main staple of the organisation's fundraising efforts.
The charities on TGC's list, however, are supportive.
Ms Selina Sebastian, deputy executive director of SPCA Singapore said: "For many years, people are used to the idea that giving has to come from the heart, and it's the kind of spirit that we want to inculcate, too.
"But we realised that incentivised giving reaches out to a different audience, who may want to support the cause but haven't, so it'll still be nice to give a little incentive to them," she added.
The Rice Company's director Tan Tee Tong said TGC could provide more opportunities to create greater awareness of small and medium-sized charities.
"However, we will continue to take guidance from COC and strictly abide by its recommendations," said Mr Tan Tee Tong.
This article was first published in The Straits Times. Permission required for reproduction.