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Community Lottery Stock (CLS)

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Primary Theme: Public Policy & Advocacy 

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Secondary Themes: Financial Management; Equity, Diversity & Inclusion (EDI); Governance & Leadership; Program Evaluation & Impact; Technology & Digital Access; Small Business Entrepreneurship 

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Geographic Focus: National (United States) 

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Summary: The CLS Act (Community Lottery Stock) introduces a hybrid financial model that merges the excitement of a lottery with the long-term benefits of stock ownership. Through a multi-tiered share system—including Common, Direct, Preferred, and Trust Profit Shares—CLS empowers individuals, schools, and nonprofits to build wealth, access funding, and participate in community reinvestment. With automated monthly drawings, transparent revenue allocation, and SEC compliance, CLS offers a scalable, inclusive, and policy-aligned solution for democratizing financial opportunity and promoting equitable economic growth.

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Key Data Points: 

  • Direct Shares cost \$2 each and enter holders into monthly randomized drawings for bonus shares. 

  • 50% of Direct Share revenue is redistributed to participants; 20% supports schools, 10% supports nonprofits. 

  • CLS is SEC-compliant and operates as a C-Corporation with dividend-eligible Common Shares. 

  • All transactions are verified through ID.me and include automated tax compliance. 

  • CLS promotes financial literacy and offers a transparent, audited selection process. 

  • Trust Profit Shares expand access to users in restricted states through a 10/90 share split model. 

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Policy Relevance: The CLS Act supports national strategies for financial inclusion, community reinvestment, and equitable access to capital. It aligns with the Community Reinvestment Act (CRA), the U.S. Treasury’s National Strategy for Financial Inclusion, and SEC regulatory standards. By offering a low-barrier, digitally accessible investment platform, CLS reduces wealth inequality, supports school and nonprofit funding, and fosters economic empowerment in underserved communities. ​

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Implementation Strategy

  • Digital Platform: Web and mobile app for share management and performance tracking 

  • Security & Verification: ID.me identity checks and encrypted transactions 

  • Automated Operations: Monthly drawings and revenue distribution with third-party audits 

  • Governance: Board of Directors, annual shareholder meetings, and public financial reports 

  • Equity & Inclusion: No credit checks, accessible to verified users in participating states 

  • Pilot Launch: Initial rollout in select states with high community engagement 

  • National Expansion: Scaled growth through partnerships, outreach, and regulatory filings 

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Author(s) / Organization: Shamirah D. Ross-Gowdy, B22 PARK, INC. 

EXECUTIVE SUMMARY 

Community Lottery Stock (CLS) is a groundbreaking financial innovation that merges the excitement of a lottery with the long-term benefits of stock ownership. Operating as a C-Corporation, CLS offers a dual investment model: traditional Common Stock traded on public exchanges and a unique “Direct Share” system that functions like a community lottery. This initiative is designed to promote financial inclusion, community development, and wealth-building opportunities for individuals, schools, and nonprofits. 

EXECUTIVE SUMMARY

TARGET MARKET 

  • Individuals seeking low-barrier investment opportunities. 

  • Schools looking for alternative funding sources. 

  • Nonprofits in need of sustainable donations. 

  • Socially conscious investors interested in community impact.

TARGET MARKET

CLS SHARE TYPES & PARTICIPATION METHODS 

Community Lottery Stock (CLS) offers a unique multi-tiered share structure designed to promote accessibility, community engagement, and financial growth. Each share type serves a distinct purpose within the CLS ecosystem, allowing for flexible participation and inclusive wealth-building. 

 

Share Types 

  • Common Shares 

    • Availability: Traded on public stock exchanges. 

    • Features: Traditional equity ownership with voting rights and dividend eligibility. 

    • Ideal For: Investors seeking long-term growth and corporate influence. 

  • Direct Shares 

    • Availability: Purchased internally via the CLS platform for $2/share. 

    • Features: Each share enters the holder into a monthly randomized selection for bonus shares. 

    • Flexibility: Unlimited purchases allowed; users can choose to cash out or hold additional shares. 

    • Note: Direct Shares do not carry voting rights. 

  • Preferred Shares 

    • Availability: Donated on behalf of schools by individuals or organizations. 

    • Features: Non-tradable and non-refundable; used to support educational funding. 

    • Impact: Enables sustainable, recurring donations to registered schools. 

  • Trust Profit Shares 

    • Availability: Purchased by users in participating states on behalf of users in restricted states. 

    • Features: If selected in the lottery, bonus shares are allocated between both users (10/90). 

    • Purpose: Expands access to CLS benefits across geographic boundaries. 

 

Participation Mechanics 

  • Eligibility: Only verified CLS account holders can purchase Direct or Preferred Shares. Common Shares are available to the general public via stock exchanges. 

  • Verification: All users must complete ID.me verification and two-factor authentication. 

  • Monthly Selection Process: 

    • Each Direct Share is assigned two unique identifiers—one visible to the user, one internal. 

    • On the 1st of each month, a randomized drawing is conducted under third-party audit. 

    • Selected shares receive additional Direct Shares as rewards. 

  • Transparency: 

    • All winning shares are publicly announced (with optional anonymity). 

    • Results are published and reported to the IRS for tax compliance. 

  • Cash-Out Options: 

    • Users may pre-select to automatically cash out bonus shares or retain them. 

    • Taxes are withheld automatically for cash-outs, and funds are deposited directly. 

 

Example #1: If user cls01245 purchases three shares with identifiers #526FS52D, #GF5856D, and #THF54185, and the system randomly selects #GF5856D, that user wins the additional shares.  

 

Example #2: If user cls01245 purchases a share for user cls-x-01254, and the system randomly selects the user’s identifier, the additional shares are allocated between the user in the permitted state and the user in the restricted state. The split is 10/90 (permitted state user)/(restricted state user). When user cls01245 purchased the share, the receiving user’s information is entered for the allocation. 

 

This structure ensures that CLS participants can engage in a secure, transparent, and rewarding investment experience tailored to their goals and values. This system ensures that every participant has a fair and equal chance of receiving additional shares, reinforcing CLS’s commitment to transparency and equitable wealth distribution. 

CLS SHARE TYPES & PARTICIPATION METHODS

REVENUE ALLOCATION & COMMUNITY IMPACT 

Community Lottery Stock (CLS) is designed not only to generate financial returns for investors but also to reinvest meaningfully in the communities it serves. Its revenue model ensures that every dollar spent contributes to both individual wealth-building and broader social good. 

 

Revenue Allocation Model 

CLS uses a transparent, formula-based approach to distribute revenue generated from Direct Share purchases: 

  • 50% → Randomly distributed to individual Direct Shareholders through the monthly selection process. 

  • 20% → Retained for CLS operational costs, platform maintenance, financial literacy and economic development (supports job creation, educational resources, local grants, and community-based initiatives in participating states). 

  • 20% → Donated to registered schools via Preferred Shares (donated on behalf of schools, providing them with a recurring, non-traditional funding source). 

  • 10% → Donated to registered nonprofits supporting community development. 

 

This model ensures that the majority of funds are returned to users and community institutions, reinforcing CLS’s mission of inclusive economic empowerment. 

REVENUE ALLOCATION & COMMUNITY IMPACT

COMPARATIVE ANALYSIS 

Community Lottery Stock (CLS) is a hybrid financial model that merges the excitement of randomized rewards with the long-term benefits of stock ownership. Unlike traditional lotteries or conventional investment platforms, CLS offers a transparent, inclusive, and community-focused approach to wealth-building. Here's how CLS stands apart: 

 

Key Differentiators 

  • Ownership: CLS participants become shareholders through Direct or Common Shares. Traditional lottery players receive no equity or stake in the system. 

  • Dividends: CLS offers dividend potential to Common Shareholders, based on company performance. Lotteries provide one-time payouts with no recurring value. 

  • Transparency: CLS features live tracking of share pools, public audits, and published winner data. Traditional lotteries often lack visibility into fund allocation or odds. 

  • Community Reinvestment: CLS allocates 50% of Direct Share revenue to individuals, 20% to schools, 10% to nonprofits, and 20% to operations. Lottery proceeds are often vaguely distributed. 

  • Tax Compliance: CLS automates tax withholding and IRS reporting. Lottery winners are responsible for managing their own tax obligations. 

  • Participation Flexibility: CLS allows unlimited share purchases and lets users choose between cashing out or holding shares. Lotteries offer fixed ticket prices and no control over winnings. 

  • Financial Literacy: CLS promotes financial education and investment awareness as part of its mission. Lotteries do not. 

  • Regulatory Oversight: CLS is SEC-compliant and governed by a board of directors. Lotteries are state-run with limited public input or shareholder governance. 

 

By combining the best elements of investment and community engagement, CLS ensures that every dollar invested has the potential to generate both personal and societal returns. 

COMPARATIVE ANALYSIS

POLICY ALIGNMENT & LEGAL COMPLIANCE 

Community Lottery Stock (CLS) is not only innovative—it is also aligned with several key U.S. laws and national strategies that promote financial equity, transparency, and community development. 

 

1. Community Reinvestment Act (CRA) 
CLS supports the goals of the CRA by directing capital into underserved communities through school funding, nonprofit support, and economic development. Its transparent, metrics-based distribution model aligns with the CRA’s updated evaluation framework, which encourages digital and community-focused financial services. 

 

2. National Strategy for Financial Inclusion (U.S. Treasury, 2024) 
CLS advances the Treasury’s objectives by offering low-barrier, digitally accessible investment opportunities. It promotes financial literacy, uses secure digital identity verification (ID.me), and provides automated tax compliance—key pillars of the national strategy. 

 

3. SEC Regulatory Compliance 
CLS operates as a C-Corporation with common stock and dividend eligibility, aligning with SEC standards for investor protection and corporate governance. Its commitment to transparency, shareholder rights, and public reporting further reinforces its regulatory integrity. 

 

Together, these policies provide a strong legal foundation for CLS’s mission to democratize wealth and empower communities through inclusive investment. 

POLICY ALIGNMENT & LEGAL COMPLIANCE

TECHNOLOGY & OPERATIONS 

  • Platform: Web and mobile app for account management, share purchasing, and performance tracking. 

  • Security: Third-party identity verification and encrypted transactions. 

  • Automation: Monthly selection and distribution processes are automated and audited. 

TECHNOLOGY & OPERATIONS

POLICY PROPOSAL 

  • Governance 

    • Board of Directors oversees compliance, transparency, and strategic direction. 

    • Annual shareholder meetings and published financial reports. 

  • Transparency Measures 

    • Publicized selection process with independent auditing. 

    • Real-time share pool tracking. 

    • Public registry of gifted shares (with optional anonymity for individuals). 

  • Equity & Inclusion 

    • No credit checks or income requirements. 

    • Accessible to all verified users in participating states. 

    • Trust Profit Shares enable inclusion of users in restricted jurisdictions. 

  • Ethical Standards 

    • No misleading advertising. 

    • No manipulation of share values. 

    • Full disclosure of risks and terms. 

POLICY PROPOSAL

NEXT STEPS 

  • Secure Initial Capital: Through crowdfunding, grants, and private placements. 

  • Platform Development: Finalize app and web infrastructure. 

  • Regulatory Filings: SEC registration and state compliance. 

  • Launch Pilot Program: In select states with high community engagement. 

  • Scale Nationally: Expand operations, partnerships, and marketing. 

NEXT STEPS

CONCLUSION 

Community Lottery Stock is more than an investment platform—it’s a movement toward equitable wealth distribution and community empowerment. By blending the thrill of chance with the stability of ownership, CLS offers a revolutionary model for inclusive economic growth. 

CONCLUSION
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