Fundraising Auction

Auction sponsorship to drive bids: "Bidder Bucks"

There are many ways to offer event sponsors benefits in exchange for their sponsorship and participation. Almost every sponsorship solicitation packet I see offers a similar list: logo placement in the program, an ad onscreen during dinner, and prominent table placement the night of the event.

Give a sponsor prominent placement in your bidder's eyes and try to drive up bids at the same time.
Give a sponsor prominent placement in your bidder's eyes and try to drive up bids at the same time.

One idea to give a sponsor lots of marketing traction at your event, and hopefully drive up prices on either live or silent auction items, is to get a sponsor for “Bidder Bucks” (see photo). Bidder Bucks are essentially a currency that you hand out the night of the event that are good only in the live or silent auction.

Every couple receives their allocated Bidder Bucks, and can use them as part of their bid on an auction item. The Bucks are non-transferable, and only good the night of the event. In the example at right, every attendee got $40 in bidder bucks that were good only in the silent auction that night.

Ironically, this particular sponsor wanted to remain anonymous, so they missed out on the branding opportunity. But you can see the branding potential here, especially if the bucks are of a high enough value.

The value of the Bidder Bucks is determined by dividing the sponsorship by the number of auction items. $2,000 in a 50-lot silent auction would result in $40 Bidder Bucks. $10,000 in a 20-lot live auction would give everyone an additional $500 to spend in the live auction and so on. The value of the Bidder Bucks has to be high enough to be meaningful to people, otherwise it lacks impact. $10 Bidder Bucks aren’t going to change people’s behavior.

This type of sponsorship works best in an environment where people are value-minded, people are of potentially limited capabilities, or participation in the auction has been lackluster. Bidder Bucks are ready-made for school events, for example, or a fledgling event in the sub-$200,000 range.

The goal is to use the sponsorship as a lever to get people to spend more than they would have. Once someone bids on an auction lot they are committed and far more likely to bid again. And when people start with “free money” the natural tendency is to spend it…and then some.

The Top 5 Worst Ways to Introduce an Auction

The way in which a fundraising auction is introduced tells the crowd a lot about what is to come. Successful events carefully map out the transition to the auction, ensuring that we’re building momentum to an important moment for the evening and the organization.

Occasionally, however, instead of setting the stage for success the person who introduces the auction (and auctioneer) sends a completely different message. Here, then, are the top 5 least successful ways to introduce a fundraising auction (all of which we’ve experienced at real galas):

  1. “I hate to interrupt your dinner, but it’s time to do the auction.”
  2. “I know everyone is having a good time, but…”
  3. “Boy, has anyone else’s 401k/portfolio taken as brutal a hit as mine did this last week? Seriously. I’m glad to see so many people given how bad the economy is…”
  4. “There’s going to be some dancing later, we’ve got a great band, so just sit through this and we’ll get to the fun part.”
  5. “I know we all hate auctions, but ours is short.”

That last one is, if you can believe it, verbatim from an event Ed did last fall - I was there, and saw the whole thing. And while a bad introduction for the auction and auctioneer isn’t the end of the world, it certainly didn’t set the right tone from the onset.

A bad introduction is also a sign of a lack of clear messaging across the entire event. If just one of your representatives onstage isn't tuned-in to your message, how off is the rest of your event? The lesson isn't simply to write a good introduction for your auction, the lesson is to do a message audit for your entire event, and make sure everyone is focused on your ultimate goal.

Why No Fundraising Auctioneer Should Charge a Commission

No benefit auctioneer's compensation should be tied to the generosity of an organization's supporters.
No benefit auctioneer's compensation should be tied to the generosity of an organization's supporters.

As a profession, auctioneering has long had performance tied to compensation. Auctioneers have based their worth, literally, on their ability to market and sell assets for their clients. This makes complete sense in the world of antiquities, fine art, liquidations, estate sales, vehicle auctions, real estate auctions and the like, but it is unconscionable in the world of charity fundraising auctions.

A good collectibles auctioneer, for example, has an established system of creating a market for the extremely niche goods they bring to auction, and it is the capability of the auction house to create that market that earns them a commission. Sellers take their high-end antiques, art and collectibles to Bonhams and Butterfields because Bonhams has an established reputation and client base. Bonhams earns their commission on each and every piece they sell because they create a market within which they can sell each and every piece for top dollar.

The logic of paying a commission breaks down, however, with fundraising auctions. Fundraising auctioneers don’t single-handedly create the market at charity events. We don’t advertise the sale, nor pretend to be able to bring the bidders to the table. As fundraising consultants we work with clients to help hone best practices of bidder and donor development, and we put on an engaging show that raises top dollar at the event. But we would never attempt to claim that we are solely responsible for the bidders who come, or the attitude they bring with them.

Bidders at charity events support causes: they overpay for things they don’t need because the money is serving the greater good. Consider the bidder we frequently see at Bay Area events who will often indicate that he wants to pay more than the final sale price on an item, because he didn’t think it sold for high enough. As we’re announcing his paddle number and the amount he bought the item for he will shake his head and indicate that he wants to pay more than that, often jumping his own bid up a thousand dollars or more.

No auctioneer deserves to earn more because of a bidder’s commitment to an organization.

Charging a commission also muddles the motivation of the auctioneer. My goal at each and every event I do is to make as much money as possible for the charity, while maintaining a sense of goodwill with the bidders. That last part is crucial, because for an event to be successful the big bidders have to want to come back and do the event again next year. I could easily get more money out of each crowd I work with, but any crowd that felt as if they’d been bled dry would never want to come back and support that organization again.

Furthermore, there is no way of knowing when two big bidders are going to show up and battle it out over a particular auction lot. There are a few philanthropists in the world who are prone to showing up at various fundraising auctions willing to bid heavily through the auction, often spending more than $25,000 on  single lots.

If one such philanthropist happened to show up at an event I was doing and drove the overall price of the auction up $100,000 it does not mean I am inherently worth $10,000 more that particular evening (But it would be awesome for the charity!). Perhaps the greatest affront of all is the fact that there are auctioneers out there who charge commissions on the “Fund a Need” portion of an auction, but that topic alone is worth its own post, coming soon.

If the auctioneer you are working with insists on charging a commission, renegotiate your contract or find a new auctioneer. Because you and your attendees are getting taken advantage of.

When Surprises and Fundraising Do Mix

One of my long-held tenets is that surprises in a fundraising auction seldom succeed. Many times have I stood onstage with a donor who midway through the bidding decided to "spice up the lot" and add to it in an attempt to raise more money. Usually their efforts generate exactly zero more bids.

But for every "rule" in fundraising, there is an exception to it, and this year I've been surprised by a few onstage surprises that worked.  While it is never possible to predict when a donor will pull an impromptu add-on, knowing these will help guide you when a donor gives you advance warning of their plan.

Radical Upgrade: The change being made to the lot was a major one, radically increasing the value of the lot. This isn't about simply "adding two more seats to the dinner" here. We're talking about adding 18 onfield-passes to the 18-person luxury suite at a Raiders game, so the winning bidder and all of their friends can go down on field and meet the players before the game.

Other major upgrade examples include a donor throwing in first-class airfare on the spur of the moment, or a vintner agreeing to show up in person to do the wine-pairing for a dinner instead of just donating the wine.

Donor Celebrity: It is also imperative that the person making the changes to the auction lot has celebrity status within the crowd. The guy who jumped up at his table and announced that he'd add 18 onfield-passes to the Raiders game was a high-level executive within the Raiders organization. People were as interested in impressing him as they were getting the additional benefits he was adding to the lot.

Lots of times someone will make a change to a lot believing they have major celebrity status with the crowd, only to find out otherwise. It's a painful moment onstage, one that usually gets blamed on the crowd, not the would-be celebrity.

Easy to Understand Changes: It is hard for an audience to hear what is going on at an auction, it's the simple truth. Making changes to an auction lot mid-auction are difficult, because people simply cannot hear the changes - and even if they can hear, they have to be able to process them.

If a donor is going to change a lot on the fly, try to make sure it is a simple, easy to understand change, such as adding more seats to the dinner or doubling the number of people who can go on the trip. Finer points, such as, "we'll be having the '72 Y'Quem instead of the '84" will get lost in the shuffle.

Generally speaking, surprises in a fundraising auction aren't a good idea. But if a donor insists, do your best to guide them to a surprise that is going to work for everyone - but especially you.