Fun Raising While Fundraising:
Nonprofits Embrace Online and In-Person Auctions

Your nonprofit can add to its bottom line by adding an auction to its fund-raising mix.

A toast during dinner for two I was recently the high bidder on dinner for two on a non-profit 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 non-profit 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

Auctioneer in top hat and tails taking bids at a nonprofit auction

Paulo Adams manages the recent fundraising auction for Emperor Norton's Stationary Marching Band

Photo credit: Tim Pierce

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.”

Silent Auctions

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

Photo: silent auction items at the 2008 center for teen empowerment auction 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, non-profit 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.

Next: Part II contains advice for running your auction, whether on- or offline.

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