A new social enterprise is raising money for charities by enticing donors with luxury prizes such as cars or even a private apartment in future.

Its move has, however, triggered the concern of the authorities, with the Commissioner of Charities (COC) saying it is looking into the fund-raising method.

Launched on Wednesday, home-grown 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.

On Thursday, the COC office issued a statement saying that it drew TGC's attention to relevant legislative requirements. In particular, the requirement that fund-raisers have a written agreement with the charities before soliciting funds. The statement also urged donors to be discerning about such online appeals.

But TGC's co-founder Charles Tan, 33, who previously worked at financial services company Cantor Fitzgerald, said he believes his enterprise has abided by all relevant legislative requirements.

TGC has written agreements with the four charities listed on its platform, he added. The charities are: 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 working in investment banking. The couple are now running TGC full-time. Mr Tan said donors also have the option to donate to charities other than the four listed, adding that he does not believe this counts as soliciting for donations for the other charities.

He noted that organisations like the Singapore Children's Society have conducted similar charity raffles."We want people to get to a stage where they give unconditionally and volunteer their time and money, but we take the view that sometimes people need a nudge, so that's all we're trying to do."

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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, said the TGC.

The company plans to take a commission of about 5 to 10 per cent from each donation for subsequent draws, to help pay for the prizes and other operating costs.

Some in the charity sector have reservations about the company's methods. Ideally, donors should be motivated by genuine care for the cause, said Mr Jeffrey Tan, a director at National Volunteer and Philanthropy Centre.

"Our research shows that while big tempting prizes may 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'll make," he added.

Similar efforts in the past have fallen out of favour, said Singapore Children's Society's chief executive Alfred Tan, who cited the National Kidney Foundation's (NKF) fund-raising 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.

Mr Alfred Tan said charity raffles are not a main staple of his organisation's fund-raising efforts now.

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."

The Rice Company's director Tan Tee Tong said TGC could provide more opportunities to create greater awareness of small and medium-sized charities . "We, however, will continue to take guidance from COC and strictly abide by its recommendations," he said.