Dash, I understand that the option is there to make it a legal sweepstakes.
I am addressing a different, although related point that many people (including snowbunny in the previous post) don’t seem to know:
Most people take for granted that a “donation” is tax deductible but this is not always true. If you get something in return than it is not tax-deductible.
The classic example of this is with dinner ads that come with a meal. If you pay $500 for an ad and get 2 free meals with it, the organization is not allowed to give you a receipt for the full $500, rather they must deduct the value of the meal. This is pashut and most organizations actually do follow this.
Where it gets less pashut is with “raffles”. According to the IRS, receiving a raffle ticket giving you a chance to win money is considered receiving something in return for your donation and therefore a raffle donation is NOT tax deductible.
(snowbunny’s thing about “if you don’t win” applies to maaser according to most poskim but the IRS doesn’t hold of that svara so it does not apply to taxes. Note also, whereas by maaser you can say that you would have otherwise spent $10 on dinner and therefore count $490 toward maaser, when it comes to taxes you have to deduct the full value of the fancy meal you received)
There are many accountants and tax lawyers who hold that if the raffle has a “no purchase necessary” option then it IS tax deductible because you aren’t getting anything extra for your donation that you wouldn’t have received otherwise. (Note I said “many” and not “all” – some say that even with the option it is not pashut which is why many tzedakas such as BMG don’t give receipts for their raffles and Chinese Auctions)
Which brings us to our question regarding the current Oorah sweepstakes. Until this year, they have had the “no purchase necessary” option and have given receipts.
But this “Million Dollar Raffle” seems to be a separate zach in which you have to donate to enter and the more you donate the more you can win. So for every dollar you give, you have a chance to win more so you are getting something in return according to the IRS. Therefore, according to my understanding of the situation, they should not be allowed to give tax receipts for this auction. V’tzarich iyun gadol.