Editors’ note: This article, first published in print during Jan/Feb 2005, has been republished for Nonprofit Quarterly with minor updates.

Adapted from The Accidental Fundraiser: A Step by Step Guide to Raising Money for Your Cause by Stephanie Roth and Mimi Ho, forthcoming (Fall 2005) from Jossey-Bass.

Auctions, whether of the live, silent, or more recently, online variety, are a popular and versatile method of fundraising. They can be the entire focus of a fundraising event, or an add-on to a dinner, cultural event, or other gathering of your supporters.

There are two major kinds of auctions: live auctions with a skilled auctioneer, and silent auctions where people write their bids next to displayed items.

Depending on the goods or services being auctioned, auctions can raise anywhere from several hundred to several thousand dollars. This article describes how to do a relatively simple live or silent auction that should raise between $500 and $5,000.

BEST USES OF AUCTIONS

Auctions can be a lot of fun — both to organize and for the people attending.

Silent auctions are great add-ons to a special event, and it’s possible to do a silent auction on a small enough scale to keep it manageable and still raise money. At a community potluck, for example, auctioning off 10 to 20 low-budget items could add $250 to $1,000 to your event’s income.

The key to a successful auction is the combination of donations of high-quality goods and services that people want and a large enough group of people interested in bidding on them.

THINGS TO CONSIDER

Like all special events, auctions are very labor-intensive to organize and therefore require a core of dedicated volunteers. Without a team of volunteers, too much work will fall on the shoulders of too few people — usually your paid staff — and will result in too little money raised for the amount of time and effort spent.

Organizing an auction involves a high level of attention to detail, along with making sure there are enough people willing to attend and participate in bidding. According to auctioneer Sandy Bradley,
author of Benefit Auctions:

A Fresh Formula for Grassroots Fundraising, you need critical mass for a “real-time” auction to be financially successful. She suggests there be a minimum of 25 people in the bidding audience, and at at least two people for every item you’re auctioning. In other words, an auction with 15 items to be bid on needs a bidding audience of at least 30 people.

A live auction will rise and fall on the personality of the auctioneer. While it would be ideal to have a professional auctioneer rattling off numbers and encouraging the crowd, a volunteer who is fast talking and able to hold the attention of the audience might do just as well. The energy of a live auction is created in large part by a number of people bidding against each other. If a lot of your audience doesn’t bid on the items, your auction can seem flat. Therefore, if your group is new to putting on an auction, we recommend starting with a silent auction your first time out. You could also do a combination of a silent and live auction, in one of two ways: 1) have most of the items bid on silently, but have a few choice ones auctioned off live; or, 2) have all the items bid on silently, then have an auctioneer visit each item and solicit bids to exceed those on the bid sheet (this way you’re starting from a higher base bid than having live bidding from scratch).

Costs

The following items should be considered as potential costs when producing an auction. You should, of course, try to get as many of these donated as possible.

  • Space
  • Equipment
  • Tables and chairs
  • Insurance
  • Auctioneer’s fee
  • Invitation design, printing, postage
  • Publicity (flyers, ads)
  • Catalog design and printing
  • Materials for displaying silent auction items
  • Decorations
  • Food and drink
  • Paper goods
  • Postage for thank-you letters

STEPS TO SUCCESS

As with most events, following a series of well-thought-out steps will help make your auction most profitable. Here are the details of eleven steps to holding a winning auction.

Step One: Make a Plan

Decide whether to do a live or silent auction, or a combination of the two. In either case, you’ll need to decide what kind of event to hold — a simple gathering where the auction is the main feature, or a larger party, dinner, or cultural event in which the auction is a part. That decision will be based on how much money you want to raise and how many people you can count on to help carry out the event. You will also need to choose a date for the event and create a timeline detailing what has to be done by when.

Once you know how much money you want to raise, plan to obtain donations of goods and services that are worth twice that amount. This way you will be able to meet your goal even if bids amount to only 50 percent of the value of each item. For example, if you want the auction to raise $5,000, you will need items worth a total of $10,000 to be auctioned. Moreover, because about half the people you ask to donate items will decline, you will actually need to plan to solicit $20,000 worth of items.

Step Two: Recruit Your Team of Volunteers

Identify people to help out with the auction. Here are some of the things you’ll want to ask people to do:

  • Solicit items to be auctioned
  • Organize logistics of the event
  • Help publicize the event
  • Get lists of people and organizations to send — and email — publicity about the auction
  • Help out at the event itself

Step Three: Prepare Volunteers to Solicit Items

Before sending volunteers out to solicit items for the auction, bring them together to brainstorm whom to ask and to conduct an orientation to the process of asking. You’ll want to come up with a master list of who’s being solicited in order to avoid having one person inadvertently asked by two
different solicitors.

It is helpful if the auction has a theme, such as “vacations,” “services,” “electronics,” “household goods,” or “restaurants.” Make a list of all the vendors who might donate something and what you want to ask them for, such as dinner for two, a weekend at a cabin, and so on.

Remember that people who own small businesses, particularly storefronts, get asked for donations frequently. They might turn you down for a number of reasons not having to do with your group: they may have policies against making donations, they may have donated to five other charities and are not giving to any more at the moment, or it may be a hard time for their business. Therefore, it’s good to have at least two and preferably three times as many potential sources of donations as you ultimately need. See the sidebar for some ideas of items to solicit.

Step Four: Solicit Items to Be Auctioned

In this step, volunteers solicit the items for the auction. This may take a couple of steps: a letter requesting an item with a promise to follow up in a few days, then a visit. In some cases, with people a volunteer knows, they can just make a phone call and follow up with a letter of confirmation if the prospect agrees to donate something. In other cases, they might want to send a short letter first, stating what they’d like the person to donate and what cause or organization the auction is supporting.

Merchants must think about how giving an item to your organization is good for their business; you can help them in that thinking. Selling points to the merchant include the number of people you expect will attend the auction, other publicity you are going to do, a promise not to ask for another item this year, or whatever is true for you. You will likely have greater success getting items donated by merchants you know personally, or whom your organization does business with, or who you know believe in the cause you’re raising money for. So, start with them. Left is a sample letter asking for a donation. Below is a sample form that should be included with the letter. Merchants should be asked to fill it out and return it so you can keep track of what’s being donated and get any instructions about how the gift should be handled.

Give volunteers two or three weeks to solicit donated items. It’s good to check in a couple of times a week to see how they’re doing and to find out what kind of support they need if they’re having a hard time completing their solicitations. Be prepared to help people problem-solve and provide encouragement to keep the momentum going.

A form can help you track progress on getting auction items (see sample below).

Step Five: Plan Program and Logistics of the Event

Once the process of soliciting items for the auction is underway, you can start paying more attention to the details required to hold a successful event. First, decide whether you want to have speakers or entertainment in addition to the auction itself. If so, consider whether people will sit or stand during that part of the event and figure that into your site selection. Second, find a venue for the auction that is large enough to accommodate the number of people you expect for the program you envision, has enough well-lit space to display all of the silent auction items, or, for a live auction, has a stage or elevated platform. In addition, you’ll need a place to store the donated items ahead of time.

Step Six: Publicize the Auction

This step has four parts. Create an invitation and a reply card and envelope to make it easy for people to RSVP and to send in a contribution if they can’t attend the event. In addition, you may want to create a flyer that you can mail to organizations for posting and that they can photocopy and distribute to other people.

Send invitations and/or flyers to your mailing list and to people whom members of your auction team know but who may not know your organization yet.

Send an email message to anyone you have email addresses for announcing the event. Use or attach the flyer to give your announcement sparkle, and provide an easy way for them — see next item). If your organization has a website, post information and the flyer about the auction there. Include examples of items that are being auctioned and all the details visitors need in order to attend. Include an RSVP button.
Use whatever free publicity outlets you can think of: ads in community papers, PSAs on your local radio station, and announcements in your sister organizations’ e-newsletters.

Step Seven: Make Follow-Up Calls to Invitees

One of the keys to any successful event is making sure you get enough people to attend. This is especially true for an auction, where the money you raise depends on how many people engage in the bidding. Ask your volunteers to follow up on the invitations they sent to people they know by calling these people about two weeks before the auction is scheduled to take place. A reminder call like this can make the difference between someone showing up to the event or completely forgetting about it. Consider getting your volunteers together for two evenings during which everyone will call their own lists and anyone else who received an invitation.

Step Eight: Make Final Preparations

For live and silent auctions, this step involves carrying out all the details of organizing the event itself — details that are the same for any entertainment or program, including setting up the space to allow for the best presentation of items and traffic flow so people can easily place bids, preparing or purchasing food and/or working with a caterer, and so on.

For a live auction, you will need to create a catalog that contains a description of each item and the minimum bid for that item. Start putting this together as soon as the auction items start coming in and at least a couple of weeks before the auction to give yourself plenty of time to get any missing information on the items and to design and print the catalog. If you have enough people involved, you can expand the catalog to include ads from some of the donating merchants or others, for additional income. Give everyone a copy of the catalog as they arrive so they can look through it during the social time before the auction begins. Decide in what order you will auction off (or display) the items. Usually you start with lower-priced items that you think a number of people will want to bid on, then move to more expensive items as people get warmed up and more excited about the bidding.

For a silent auction, prepare a form to place in front of each item that has a description of the item, the name of the donor (if not anonymous), and indicates the minimum bid and in what increments additional bids can be placed. For example, a gift basket of skin care products that would sell at your local bath store for $30 might have a minimum bid of $20, with increments of $5. And a trip to Hawai’i, flight and accommodations included, worth $2,000, might have a minimum bid of $1,000, with bidding increments of $100.

Step Nine: Hold the Auction

For a live auction, it’s important that the people attending are serious about bidding. Otherwise, you risk both not selling enough to raise the money you need to raise, as well as not having the excitement of bidding to make the event an enjoyable one for the guests. Assess the donated items to make sure they will be of interest to bidders. Also, if you feel something is worth much more than people attending the auction will be willing to spend on it, make arrangements to sell it outside of the auction. Here’s an example: a neighborhood association held a live auction for which residents donated many wonderful items. One was an antique broach valued at $250 by an antique dealer. While certainly worth this much, the broach was too old fashioned for the audience’s taste. To save the donor of the broach, an elderly resident of the neighborhood, from feeling bad, the organization sold it to an antique jewelry dealer for more money than they thought they would get from the auction.

As part of the preparations for the auction, think through how people will pay for, and collect, the items they’ve acquired. You want to avoid having a pile-up of people coming to pay for their items at the end of the evening, which makes an otherwise enjoyable experience irritating. Make sure you have several volunteers ready to collect money and distribute the items, as well as enough space set aside for that task. You also need to make arrangements for winners who have to leave early to be able to claim their items (and pay for them) later.

Let people know that payment for items they have purchased at the auction is not tax-deductible.
If at all possible, you want to be able to accept credit card payments for the items people have bid on. This is especially important if you have any high-ticket items, such as expensive art work or vacations.

Step Ten: Send Thank Yous

Send thank-you notes to everyone who attended the auction as well as to each person who sold tickets and to each merchant and others who donated items.

Step Eleven: Evaluate the Auction

If you think you might want to conduct another auction in the future, this step is crucial to making improvements and potentially raising more money the next time. Your evaluation can be a simple set of notes jotted down (legibly) soon after the auction is over, perhaps at a final wrap-up meeting of the auction team. Note how many items were sold, which were the most popular, any problems with the volunteers, the merchants, the logistics, and so on. Make a file with all the information about the auction, including lists of who donated items, who purchased items, who volunteered, and notes about timing and other issues. The following year, it will be much simpler to do the auction if a committee can pull out the file and benefit from the previous years’ experience

VARIATION ON A THEME: THE ONLINE AUCTION

If you don’t have the resources to organize an in-person event as described, an online auction may be a great alternative.

Online auctions take place “virtually.” People go to a website, view the items to bid on, and submit their bid. Anyone familiar with sites like e-Bay will understand the process of placing bids online.

Online auctions work well with a community of people who are comfortable with (and have easy access to) the Internet. They also lend themselves to a geographically dispersed community because they don’t require people to go anywhere in order to participate. One thing to keep in mind is to make sure the items that are donated can be easily sent to the winners; moreover, some items won’t work for people outside of your community — for example, a dinner for two in Chicago won’t get many bids from your supporters in Houston. Online auctions don’t require a high level of commitment to the cause, as long as the items you are auctioning off are appealing to the people, you’re approaching to bid on them and you have a way of reaching a lot of people to let them know about the site

Online auctions are not the best strategy if you’re trying to build a sense of community or if you want to celebrate something with a group of people, or even if you want to increase people’s understanding of the issue, you’re raising money for. However, they are a way to get people who are more peripheral to your organization excited to be spending their money on something they want that also supports a good cause. . Online auctions do have some costs; you may be able to get some of them donated:

  • Web designer to create the site
  • Fees for the domain to host the site
  • Printing and postage to send letters to people soliciting items to auction
  • Postage to ship items to winners (depends on the items; if most of them are gift certificates, cost will be minimal)
  • Printing and mailing flyers to advertise the auction

You will need plenty of lead time to create the website and post the items to be auctioned off. Using a volunteer means you have to build in extra time. Take digital photographs of any physical items that will be auctioned so that the image can be posted. For tickets, gift certificates, and so on, create a generic image that you can use. Decide on a minimum bid for each item as well as the increments for increasing a bid. For example, a dinner for two at a local restaurant that might be worth $50 could start with a minimum bid of $25, with increments of at least $2 for each successive bid.

Of course, being sure the technology is working is the most important issue. Make sure you have all items posted on the website and that the mechanism for submitting bids is working smoothly before the official launch of the auction. One thing to check is that when someone posts a bid, it shows up immediately. Otherwise, you might get more than one bid at the same level for the same item and it won’t be possible to determine whose bid was entered first.

As the auction gets underway, monitor the level of bidding activity to see how it’s going and to determine if you need to increase publicity to get more people involved. Once the auction is closed, make sure winners have paid for their items before they receive them. The easiest system is to have them mail in a check, at which point their item is mailed. If you have the capability of accepting credit card payments, or using an online payment service such as PayPal, then purchasers can pay online.

If you’ve organized smaller-scale auctions and want to move to a level that will raise substantially more money, check out Sandy Bradley’s book, Benefit Auctions: A Fresh Formula for Grassroots Fundraising. You can read a review of her book in the next issue of the Grassroots Fundraising Journal.