Your nonprofit can add to its bottom line by adding an auction to its fund-raising mix.
I was recently the high bidder on dinner for two on a nonprofit online auction. Thanks to the auction, I discovered a restaurant I would never had tried otherwise, and just as important, I was able to donate to a cause near and dear to my heart while not breaking my budget. Participating in the online auction was a wonderful way to find interesting, unusual gifts – and see the money go to nonprofits.
“Fund-raising auctions are tried-and-true,” says Jon Carson, CEO of cMarket. cMarket has helped schools and nonprofits raise over $44 million through its online auctions. Since many nonprofits lack the space and staff resources to throw a gala or other auction event, the ability to host an auction online is becoming increasingly popular.
The Online Approach
“The Internet removes barriers of time and geography,” Carson points out. More people are able to participate, and as Carson emphasizes, “more bids plus more items equals more money.”
With cMarket’s launch of the Bidding for Good portal, a nonprofit organization’s auction is publicized to nearly 100,000 potential new donors – an “amassed community of cause-minded members.”
Online auctions allow for:
- more bids
- advertising space for sponsors (a marketing opportunity other than a simple charitable ask)
- new items to be added until the day it closes
- evaluating the auction mid-stream and make course corrections if necessary
cMarket, which has been operating since 2003, has learned how to predict how successful an auction will be early on, and can help you change strategies if it isn’t going well. cMarket offers a library of email templates to help drive your donors to the auction site, while partnering with a traditional print company to also send out postcards.
Being There Is Half the Fun
Auctions work under the fundamental concept of competitive arousal. “The status of being ‘the one’ to [win] this item over and above the other parents absolutely matters,” explains Paulo Adams of Paulo Adams Auction Services, a Boston-area auctioneer specializing in benefit auctions. “There are certain benefits to the ‘sniping’ mentality.”
However, Adams reminds us that there are definite pluses to hosting an in-person auction. “People come [to the event] to donate anyway,” he reminds us, observing that organizers often forget that. Donors who attend an auction are there to give you money.
By shutting out that second-place bidder in an online auction, you are “letting the money walk away,” as the bidder may not have the opportunity to bid on another item, and is less likely to be invested in your cause. Adams cautions that you should “do your best not to leave money in the room.
“Strictly having an online event does not maximize the donation.” Live auctions are an opportunity to “put people in touch with the shared community that people are going to the event for in the first place.” Kid-created items, for example, or items made by the women’s cooperative you serve. “You don’t have that community vibe in an online setting.”
Carson reports that “women are the dominant bidders online.” Whereas in a live silent auction there are social obligations, items at nonadjacent tables, and a crowd to elbow through to continually check on your items, “social distractions are gone” online. Women are more comfortable being competitive bidders when the “elbowing” is virtual.
Erin Ryan, development associate at the Center for Teen Empowerment, described their recent silent auction as a “gauntlet of great items.” “There is too much to look at – people never spend this much time [browsing] in a store.”
Having It Both Ways
The Center for Teen Empowerment put on a “combo” auction, where items were available online and offline. A typical combo auction will have items that close out online. Some items that are bid upon online, and then transfer to a silent auction with the starting bid being the highest bid online. And then more traditional big ticket items that can be previewed online, but are only bid upon at the live auction.
By having items available for review ahead of time online, guests can arrive having already “edited” their lists instead of feeling overwhelmed by the selection. But by making some items only available online, supporters who can’t make the event can still participate.
Carson recommends that 20 items, plus 20 items per 100 guests, roll over to the in-person silent auction. With cMarket, nonprofit organizations can choose how many items to close out ahead of time, and leverage the more unique listings to attract bidders to the event itself. Absentee bidders can also place a maximum bid on an item, and at the live auction, a proxy bidder will bid up to that maximum. “[It] helps keep bids from getting stale,” Ryan explains.
Tips for a Good Auction
Unique experiences.“What sells best at charity events are unique experiences,” advises Paulo Adams of Paulo Adams Auction Services. He suggests talking to your town’s fire department about having a truck brought to a kid’s birthday party, or working out with the city that the winning bidder will have that pile of snow left by snowplows removed from their driveway all winter.
“[These] sorts of things go over big,” Adams states.
Erin Ryan, development associate at the Center for Teen Empowerment, which held a combination auction earlier this year, says that the center held back art and other unique items for the live auction, but posted the descriptions online to generate interest.
Beware too many items.However, Ryan warns, they had “incredibly generous donors and almost too many items.” Adams also cautions against having too many lots, and recommends bundling them together. He mentions a previous auction where the community really pitched in and contributed 600 lots, but there were only 200 people attending the event. By bundling together items such as dinner and a show, or putting together a spa basket, lots become more attractive. “Don’t be afraid to package things together – it makes for a really nice event.”
Plan ahead. Adams recommends that your fund-raising committee start planning months in advance, ideally a year. Paula Goldfarb, events and sponsorship manager at Susan G. Komen for the Cure in Boston, strongly suggests forming an auction committee, since the pre-auction preparation is the most difficult part. This will help with outreach and finding donors.
Consider your demographic. Jon Carson, CEO of cMarket, which helps nonprofits conduct online auctions, says that gift cards do well – bidders can see the obvious value, and competitiveness and the desire to score a bargain kick in. cMarket’s logs show that women tend to favor dining, travel, and health and beauty items, while men tend to bid more generously on dining, sports items, and electronics.
Be sure to take credit cards. Adams says he cannot emphasize this enough. While merchant processing fees may feel overwhelming, by not allowing bidders to use credit cards “you are costing your organization money.” He suggests working out a sponsorship agreement with a local bank, where the bank will donate the processing fees.
Know your audience. “Be keyed into who your event attendees are, and what their [spending] capacities are,” stresses Ryan. “If an item is too precious, people are afraid to bid.” Adams advises that “the price point of your items needs to meet the means of your bidders.”
Quality, not quantity. Goldfarb emphasizes that having a good range of items is much more important than the number of items.
Take advantage of your board’s connections. Encourage your board members to hit up their friends, and reach out to potential donors not in your database.
Leverage external events.The Center for Teen Empowerment had several Celtics items online. While the items started off slowly, when the Celtics entered the playoffs, bidding suddenly became furious. Komen for the Cure had several Red Sox items (signed bats, etc.) during the World Series.
Pair your celebrity auctioneer with a professional auctioneer. “Celebrity auctioneers are great to get people in the door,” Adams confirms. However, he suggests using them as emcees and handing the microphone to a professional when it’s time to start bidding on items. “[Celebrity auctioneers] don’t know the trade. They don’t know how to draw bids from the floor. They don’t know when the audience is done bidding.” A professional auctioneer can help you get the best value for your big-ticket items.
Allow maximum bids.By including a “guaranteed bid amount” of twice the item’s value, you are giving an opportunity to a donor who doesn’t enjoy competitive bidding to still walk away with the item they want, to your organization’s benefit.