As a nonprofit pro, you’re probably at least a bit familiar with charity auctions. Typically held in conjunction with larger events (like galas and golf tournaments), this popular fundraiser allows supporters to bid on auction packages the nonprofit has gotten donated or procured at a low cost: think gift cards, silent auction baskets, a trip to Napa Valley – the possibilities are endless. The highest bidder takes home the item, and your organization collects the proceeds.
Charity auctions make it possible to raise tens of thousands of dollars (or much more) in a single night. But if you’ve never hosted one, you might be surprised to know –
Hosting an auction is anything but simple.
It can be difficult for a first-time event chair to understand the degree of cost, difficulty and expertise required to pull off this type of fundraiser.
Before you start procuring items and putting money down with vendors, you’ll want to candidly assess whether your charity has the foundation for a successful, profitable event.
To help, here are 5 questions to consider.
Will an auction appeal to your donors?
Auctions are popular among almost any demographic. Many people enjoy shopping and buying gifts, and benefit auctions are a prime place to find one-of-a-kind items – not to mention the proceeds go directly to a cause they care about.
That said, it’s important to know your donor base well before deciding to do an auction. What’s the potential audience size? Are you a local organization or chapter that can rely on guests showing up – or are supporters mostly engaged online?
Making sure an auction event is worth your time is the name of the game.
What is your audience’s giving capacity?
Nonprofits tend to underestimate their audience’s giving capacity – but you should try to establish a reasonable range of what donors typically give, and what they might give. This is important for a few reasons.
First, it helps you predict if hosting an auction will end up being profitable. Costs add up quick. You should at least break even through ticket sales (if not make a slight profit), so try drawing up a rough budget to determine how much you’ll need to charge per head. Everything else in the auction can then go straight to your cause.
Knowing your donors’ giving capacity allows you to procure packages tailored to your donors. You’ll also be better equipped to decide what kind of auction to host (more on that next).
What are your goals in hosting an auction?
Your fundraising goals should guide the planning and execution of any event you choose to hold – auction or otherwise.
Here’s a brief rundown of the types of auctions, charities typically employ, and how your primary goals fit into each:
In a live auction, a benefit auctioneer presents about 7 to 12 premium, big-ticket packages one at a time for guests to bid on. Donors place bids by raising their bid cards at certain amounts.
The live auction offers the greatest rewards per item, and one top seller is travel. Unique travel experiences can be reserved for live auctions at no upfront cost, then sold multiple times – ensuring a greater profit and more satisfied donors.
Since the live auction is expected to pull in thousands of dollars for your cause, its packages can be more difficult to put together. But if the #1 goal is to raise as much money as possible and provide major “WOW” factor at an event – a live auction can do that.
In a silent auction, items are displayed on tables for guests to browse at their leisure before the auction closes. Donors can place bids on bid sheets (pen and paper) or electronically (via mobile phone or tablets provided).
Silent auctions take the most time to organize and put together, but lower priced items (like discounted luxury hotel stays) allow you to engage more of your donor base. If the #1 goal is to spread awareness for your cause, engage as many supporters as possible and have fun – a silent auction can do that.
This is essentially a digital silent auction. Donors browse, bid on and pay for auction items online. Items are shipped to winning bidders, picked up in person, or sent electronically (if the item is a voucher or certificate). When looking for online auction software, keep donor data top of mind and select the most secure platform possible.
Without the “peer pressure” and in-person urgency, online auctions tend to rake in the least money. However, they’re straightforward to host; low cost; and open to supporters around the world. If the goal is to engage virtually all supporters and tap into online shopping dollars with minimal cost – an online auction can do that.
Can the auction boost momentum from a different event, and vice versa?
As mentioned, auctions are often held in conjunction with other events: such as dinners, galas, special performances, awards banquets, sports tournaments, 5K races and more. Together with ticket sales, event sponsorships, raffles and a fund-a-need, including an auction makes other fundraising events much more lucrative.
Smaller events, like golf tournaments and awards banquets, often choose to auction off just a handful of items for some additional revenue.
At larger events like galas, the silent auction typically is held during the cocktail hour – while the live auction is the main entertainment of the night.
Do you have the resources needed to put together a great event?
By all means, do not underestimate the ability of your organization to put on a terrific fundraising event. But it’s helpful to take stock of your resources and manpower before committing to an auction.
- Time – Many successful auctions take at least 6 months to plan, if not one full year. Have you allotted enough time to put together a high quality auction event?
- Labor – There are many different teams and roles that need to be fulfilled: organizing logistics, procuring items, managing volunteers, marketing the event, arranging decor… Be sure you have (or can reasonably recruit) enough people and volunteers for an auction.
- Connections – We will go into greater depth about the process of procuring unique, high quality charity auction items in a future blog post. For now, be aware that procuring donated or no-risk auction items requires persistence, creativity, organization and connections.
- Cost – It takes money to make money, and nowhere is this more apparent than a fundraiser. Auctions can be expensive. With time and persistence, they can be highly profitable – just make sure you’re willing to commit the time needed to turn “costs” into lucrative investments for your cause.
As you can see, there are many considerations you’ll want to keep in mind when deciding whether a charity auction is right for your organization. But don’t let them intimidate you from trying an auction for the first time.
Thousands of nonprofits across North America have found great success with this type of fundraising event.
If you’re willing to commit to creating a top-notch experience for every donor that walks through your doors on auction night, you’re already in a great position to succeed.
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