There are two auction formats, and both require considerable effort and planning. To determine whether an auction of either type is feasible for your organization, carefully review the requirements and make sure you have someone with experience running a successful auction.
Live Auction or Silent Auction?
In a live auction, an auctioneer guides the bidding, and people place bids by calling out amounts or holding up numbered bid paddles or their auction programs. Live auctions are often more productive if there is a professional (or at least experienced) auctioneer. They know how to get the bidding for an item up or when the bidders are tapped out. They can make decisions on the fly about whether to offer a “multiple” of the same item if bidding went well the first time around, and they can weigh in on where to start the bidding for specific items.
During silent auctions, participants place bids by writing them on bid sheets or submitting them over their phones through a mobile bidding platform. Silent auctions require additional space, and the bigger the auction, the more space that’s needed. Aside from the area in which the silent auction will be held, you’ll need storage space and a location in which to assemble gift baskets.
The Challenges of any Fundraising Auction
Auctions are labor-intensive. Some of the significant tasks that have to be completed include:
- Preparing and mailing bid letters
- Making personal solicitations for auction items
- Picking up donated items or managing a drop-off location
- Organizing and packaging donated items
- Setting up/breaking down the auction at the venue
- Taking credit card payments and distributing paddles or programs
- Delivering auction items to winning bidders
- Mailing tax deduction letters to winning bidders
For philanthropists (would-be bidders at the auction), tax deductions are often necessary. To offer donors tax deductibility (for the amount paid over and above the fair market value of the items received), your group must be “organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, educational, or other specified purposes and meet certain other requirements” under Internal Revenue Code Section 501(c)(3).
Auctions require donations: physical items (airline tickets, hotel rooms, food, beverage, sports memorabilia, jewelry, children’s items, pet products, electronics), experiences (lunch with the Mayor, golf clinics, riding lessons, spa days), or live animals (puppies). Soliciting donations involves a strategy and community connections to famous or popular individuals and companies. You’ll have to decide whether your organization is equipped and up to the task.
The Worthiness Question
Your organization will have a better chance at both soliciting auction donations and earning revenue from bidders if the cause is worthy. This is arguably a subjective determination on the part of donors and bidders. To have a successful auction, there needs to be a pool of donors and bidders you can recruit to support your worthy cause.