Who doesn’t love a good tombola?
The spin of the drum. The swish of the tickets. The pun-rich announcement of the numbers/names/prizes.
Non-UK readers may recognize raffles, prize draws, lucky dips, or potentially sweepstakes (although that does have other uses in some sport contexts). Some form of lottery.
A fundraising game widely used and often loved. Pay to play, a random chance to win, prizes and parties galore!
What’s not to love?
Well… gambling.
In principle, nonprofit lotteries are a very low-yield form of chance-based gamifcation. Anyone getting their fix at the village fete needs an intervention.
However the reality is, lotteries are still a form of gambling, which means when implemented in certain contexts at certain levels, they require regulation. It's very unlikely that a government would need to step in to regulate a village fete tombola, but issues surrounding online donations and the payment platform Stripe are more clear cut.
Why you shouldn’t use Stripe for your lottery fundraiser
There’s a very simple reason why you shouldn’t use the Stripe payment platform to accept payments for tickets for your charity fundraiser.
They tell you not to.
On Stripe’s own web page where the URL suffix is legal/restricted-businesses you will find the following in the section titled ‘Prohibited Businesses’ which in Stripe’s language refers to ‘Industries that can’t use Stripe, and products Stripe doesn’t support’
- Games of chance including gambling, internet gambling, casino games, sweepstakes and contests, and fantasy sports leagues with a monetary or material prize
- Payments of an entry or player fee that promises the entrant or player will win a prize of value
- Lotteries
The more specific ‘Restricted Businesses’ category defined by Stripe as ‘Industries and products that can’t use Stripe’s services without Stripe’s prior approval in writing’ includes the following
- Charity sweepstakes and raffles for the explicit purpose of fundraising
Thus theoretically it is possible for you to use Stripe for your fundraising charity lottery IF you have gotten EXPLICIT written permission from an official Stripe representative.
What happens if we make a mistake?
If you do use Stripe as the payment system for your charity lottery fundraiser and you haven’t gotten explicit permission, you MIGHT get away with it. For now.
Stripe is a big company. It handles millions upon millions of payment transactions every minute of every hour of every day all around the world. They have neither the time nor the resources to monitor every single last transaction closely enough to know if your organisation is selling lottery tickets or lots of trinkets.
But sometimes they do notice. Sometimes you will get found out. And if you do, the consequences can be severe.
Your account can be suspended.
Your payment processes can be blocked.
Your donation systems will stop working.
And it's very likely you won’t be able to get them back.
Appealing a decision by Stripe on these kinds of areas can be a long and difficult process. Not only that, at the end of the day you may well still fail. Stripe would be well within their rights to deny your plea. Especially since you would have broken a rule that’s not exactly ambiguous, unclear, or in any way less than entirely obvious.
This is woe-filled work, a deluge of delay, and problems aplenty, for a situation that you had no real need to get yourself into in the first place.
What’s the solution?
The first and most obvious option is to simply not do online lotteries. This is an especially good idea if you are a smaller nonprofit. Many other forms and manners of fundraiser exist, and moving into a gamified mold is perhaps not the best idea given the inherent complications.
The second option is, if you use Stripe, reach out to them and ask permission. As evidenced by their terms of service, they do sometimes offer it. However, you need to do this BEFORE you announce any plans to hold such a lottery. Better to be sure before you say anything in public.
The third option is to look into lottery specific services. Companies such as StarVale and Woods Valldata are specifically engineered with lottery in mind, and may be able to help you here. Of course these do come with additional associated costs.
Whatever you choose, and however you want to look at your digital fundraising in the future, you need the best in donation platform expertise to help you along.
That is why you need to speak to Everfund today.
