Buying discount vacations to support charities. Is it worth it?

The premise seems almost too good to be true: A fundraising company offers you a discounted price on a vacation and a charity receives a donation. Explore the world while helping the world and everybody wins, right? It's worth digging into the details to see if it checks out.

A different model for travel

Two leaders in this space are Omaze, a Los Angeles-based company that opened its doors in September 2012, and Charity Buzz, a New York-based company founded in 2005. The two companies operate with subtle differences, but both are looking to revolutionize both the way that we pay for travel and other experiences, and the way that we give to charity.

The market opportunity that both of these companies see has to do with the metrics that donors use to judge charities. A key measure at sites like Charity Navigator involves the ratio of fundraising expenses to total expenses. This lowers scores for nonprofits that spend from their budgets toward marketing and fundraising, even if the nonprofit gets back several times more fundraising dollars than they spent. In other words, charities are frowned upon for investing money in ways that might pay off in the long run, like raising brand awareness.

According to Omaze, the result is that these charities are forced to rely on "time-intensive galas, expensive dinners and black-tie auctions" to raise large sums of money all at once from a limited donor base. Omaze says that charities can only do these big events once or twice a year, which means that they're doing very limited fundraising for most of the year and only tapping the most well-off members of their potential donor base.

Omaze flips this traditional model on its head by raising money for charities through giveaways, contests and experiences. In the case of contests, you don't always have to spend money to enter, but you'll have a better shot of winning if you spend a few bucks on entries. Then, depending on the specific details, the charity connected with the giveaway gets some percentage. I've seen this percentage range from 70 to 100 percent, so make sure you read each page. Or as Omaze puts it, it "grant[s] the donations, minus the experience fees and costs," to the charity. On charity's end, there is no expense.

The model aims to democratize traditional auction-giving. Omaze, for instance, claims to have received donations from people from more than 180 countries and supported more than 350 charities, while also exposing charities and properties to a wider customer base than it would typically have the power to reach.

From the looks of it, both new services are spearheading exciting new ways to support causes you care about, while getting to travel.

How it works for you

According to Omaze, wanderlusters can either purchase a pre-designed trip or enter a lottery to win a one-of-a-kind travel experience. However, a look through the site seems to reveal only the latter. The lotto option is free to enter, but making a small donation of $5 or $10 increases the number of entries you get, and therefore your chance to win. Featured experiences include a week-long private yacht excursion through the Greek islands, five nights of luxury glamping in Bali and a month in a European city of your choice for you and a friend.

Each listing tells you which charity the experience supports, allowing you to choose trips that support the causes you care most about. For more information on where donation money goes and how the process works, check out the Fundraising Transparency explanation at the bottom of each listing.

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What are the vacations like?

At both Charity Buzz and Omaze, you'll find a variety of travel experiences right here in the U.S. and beyond, including the Caribbean, Mexico and Central America, South America, Europe, Asia, Africa and Australia. Due to the ongoing pandemic, the terms of most travel experiences state that the trip will be scheduled when it's safe and the customer is ready to travel. But, carefully read the terms of any auction you enter to be sure you can travel when you want and not on specific dates.

When we looked this week, Charity Buzz was offering 70 travel auctions, including stays at luxury resorts and private condos and homes. There was even a listing for a three-night private yacht charter, a three-night stay at the Versace Mansion in Miami and a five-night South African safari.

There was a nice mix of auctions that include stays at resorts from brands like Fairmont, Hilton, Kimpton, Solaz and more.

Is it a good deal?

It depends on your luck. The experiences are high-end and exclusive — many of which you couldn't arrange at any price.

For instance, the Omaze travel section currently offers a double lunch date with Nicole Scherzinger (of the Pussycat Dolls) and rugby player and model Thom Evans. The deal includes round-trip airfare for two people to London and accommodations at a four-star hotel. The package supports the charity Arms Around The Child UK — dedicated to building better circumstances for children around the world who are experiencing extreme adversity.

Bottom line

Both services -- Omaze and Charity Buzz -- allow you to combine charitable donations with a chance to win a trip. If you already plan to donate to causes you care about and you love to travel, this seems like a no-brainer.