Illegal? How is it different from Verizon putting out an RFP saying "We have $250,000 to spend on advertising in the social media space, show me what you've got". It's the same thing but on a smaller level. The Wikipedia page describes it accurately: http://en.wikipedia.org/wiki/Request_for_Proposal
Bad for business? I have to call BS on that too. It's only bad for those catering to < $500 price point. If you can't handle pricing pressure on the bottom end, don't compete on price.
Thanks for the reply. However, I fail to see how you could have read the article, or even your own link to Wikipedia, before posting and submitting a reply.
This is not a request for proposal, by the definition on the page you linked to. This is a request for a finished artwork, thus a contest, and thus subject to laws of 50 states as well as international laws, as the article explains.
The only "contest" that is regulated by law is legally called a "Sweepstake". A sweepstake is quite clearly defined as "free entries into drawings of chance". http://en.wikipedia.org/wiki/Sweepstakes
Comparing a design contest to a sweepstake is incorrect. They are not the same thing.
And links to sites with a clear, stated, and extreme bias doesn't help you convince me "design contests are bad". It only drives home the points "designers -think- design contests are bad".
Did you read the article? As it says, there are multiple varieties of contest regulated by law, with games of chance being only one of them, and sweepstakes being only one of those. Your Wikipedia article is quite explicit about sweepstakes not involving skill, with reason.
The article agrees with you that design contests are not sweepstakes -- they are another type of contest which is subject to different laws. And while the article's truth would benefit its author, that does not mean it is untrue.
It sounds in the article that the laws in this area are a mess of grey areas. There are some obvious no-nos that need to be avoided: plain gambling, fraud etc. The former is terrible difficult to really define. The latter leads to heavy bureaucracy.
In this kind of a case, I guess it's a matter of testing to see if they are enforceable. They obviously aren't being targeted for prosecution. But that doesn't mean they can't be.
This is something like asking if there are developers who will do a mockup interface/database schema/class structure for your web app for free, so that you can choose the best one before the application is developed. You can probably find some people willing to work this way, but they probably won't be very experienced, as the experienced people will have figured out that it is hard to earn a living wage this way.
For logo design in particular, the initial design can be the hardest part of the process, so it doesn't make sense to give it away for free.
Bad for business? I have to call BS on that too. It's only bad for those catering to < $500 price point. If you can't handle pricing pressure on the bottom end, don't compete on price.