Todd and Puanani Wataoka were happy to hear they had won a charity raffle even though the grand prize had been downsized from a $600,000 house to a $50,000 home makeover.

But the Wataokas did not expect a host of problems that would lead to their rejecting the prize from the Forbes Foundation.

The Wataokas said the foundation and its president, Suzan Forbes, were not clear on what the home makeover included and that most of the goods and services in the grand-prize package appeared to be donated by Forbes’ friends.

Feeling uncomfortable in their dealings with the foundation and fearing that their winnings would pose a problem when filing taxes, the Wataokas decided to sever ties with the organization.

"We didn’t accept any of the prizes at all," Todd Wataoka said. "It’s been kind of shady."

Puanani Wataoka, who won first place, and Todd Wataoka, who by coincidence won third place (he was supposed to get a car but combined it with his wife’s prize to get a new deck), were among the thousands of people in Hawaii and overseas who entered the Forbes Foundation’s house giveaway raffle that was scheduled for May 1, Forbes said. The highly publicized contest promised raffle participants the chance to win a home on Oahu if they held a winning raffle ticket. Raffle organizers hoped contest participants, who received one ticket for each $25 contribution, would donate enough money to cover the cost of the home and provide a hefty surplus to be given to the National Kidney Foundation of Hawaii and Rotary Clubs across the state, she said. By the time the contest ended in May, however, the foundation had raised only about $200,000—not enough to buy a house, she said.

Fearing back in March that the foundation would be unable to raise sufficient funds to give a home away, the state Attorney General’s Office instructed the foundation to list smaller alternate prizes in its contest rules. When the winners were announced in May, the foundation awarded a much smaller giveaway—an interior home makeover valued at more than $50,000—in accordance with that list.

The Wataokas—who just completed a home remodeling project before winning the prize—said Forbes verbally agreed to build a deck for their home instead of doing an interior makeover, but failed to make good on her promise after a contractor who agreed to donate his time for the project backed out.

"I think the intent is good, but there’s much to be desired," Wataoka said. "People should give to charity, but maybe give to charities directly."

Forbes said building the deck was a larger undertaking than expected and was too expensive for the foundation’s budget.

The Wataokas were not the only contest participants to complain about the raffle. When the lesser prize was awarded in May, Forbes said a number of ticket-holders who thought they were in the running for a home—not a home makeover—demanded refunds on their donations.

Despite participant complaints and the scrutiny of the state Attorney General’s Office, the foundation kicked off a second round of fundraising yesterday. If the foundation can reach its $2.5 million fundraising goal, Forbes said it will give away one home or a mortgage pay-down equal to half the price of the prize house. Rather than setting a firm deadline on the fundraising drive, she said the foundation will continue issuing tickets until it reaches its goal.

Forbes said she realizes the public might be skeptical of her foundation and its second fundraising push, but she hopes that people participate in the raffle to generate money for local nonprofits.

"I’ve learned my mistakes, and, let me tell you, we’re going to give away this home," she said.

The Forbes Foundation has nothing to do with Malcolm S. "Steve" Forbes or Forbes Magazine.