Angel Investors Back New Business Idea That Helps Raise Money for Charities

Tax-exempt entities are referred to as “non-profit” organizations, but they are truly big business operations generating a lot of money by serving a public benefit. Two Los Angeles entrepreneurs recently launched a new online company for charitable fundraising.

Omaze raffles once-in-a-lifetime experiences on its website to raise money for charities. This system is different than elite charitable auctions that sell dream events to the highest bidder. The Omaze website gives anyone a chance to win such opportunities as a trip to SpaceX’s Singularity University headquarters or a visit with the cast of It’s Always Sunny In Philadelphia.

The result opens charitable giving to the masses instead of only the wealthy. A donation of $5 is all that’s required for participation in a raffle. Donors can enter as often as they wish. The Omaze website identifies a charity to receive 80 percent of the proceeds. For instance, initial proceeds raised on the site benefited training of veterans as first responders in disaster relief situations.

Omaze is the creation of Matt Pohlson and Ryan Cummins, who were friends at Stanford. They created the idea for their new company in 2011 after working together on swanky charity events that were too exclusive for the general public. The duo raised nearly $1 million of capital from angel investors to launch their charitable endeavor for the casual-giving crowd.

Users of Omaze select a dream experience or make several choices. A cause is matched with each experience. Every $5 donation increases a donor’s chances of winning. In addition, a donor earns additional raffle entries by inviting friends to support the featured charity. When the pre-determined deadline arrives for an experience, a computer-generated random process selects the winner. The website tracks the funds raised for each cause so that participants can see the impact of their support.

The Omaze site launched in a beta version in 2012. As supporters discover the new gifting platform, Pohlson and Cummins anticipate implementing enhancements with new raffle experiences and more charity campaigns.