Fund Raiser Auctions

One of the best ways for a nonprofit organization to raise money is though a fund raiser auction.  I know of at least three high schools that raise substantial amounts.  In turn, those funds are used to fill deep voids in their budget.  More and more organizations are turning to fund raising auctions as the economy and state/government funding continues to shrink.  Everyone involved with this type of event benefits.

Contributor:  Those individuals who donate items for auction have the ability of taking credit on their taxes.  The nonprofit organization cannot place a value on the item.  The organization will provide a receipt validating the donation.  Those contributing have to assign a value to the item for the tax deduction. 

I suggest searching a few areas on the Internet to justify the value.  The receipt will stand as paper trail in the event of tax audit.  But there is always a chance of questions on the assigned value.  I suggest researching eBay, and other Internet sources.  Use those sources to determine the value.  At the same time document the name of the source, Internet address, the date and time.  Screen prints work very well for this.  Then staple the supporting value documentation to the receipt. 

I am not an accountant.  Nor can I speak for any individual conducting a tax audit.  But I personally feel that the receipt along with the supporting researched value information will help.  It will prove transfer of the item and justify the amount entered for the deduction.  Speak with the individual that prepares your taxes for more suggestions. 

Often the question comes up involving the actual sale of the item.  A specific question might be: what if the item does not sell very well?  The response is the same.  The nonprofit organization provided a receipt of donation.  The value assigned was supported from research.  The amount the item auctions for is not relevant.  The nonprofit organization will receive the proceeds regardless if the item sells low or very high.

Nonprofit Organization:  Organizations that have success with fund raiser auctions follow the same basic procedures.  Contacts are made with businesses, supporters and other individuals seeking donations.  As donations are received a receipt identifying the item is given the contributing individual or business.  

Items are cleaned up, repaired if necessary.  Detailed descriptions are written and the items stored until the day of the auction.  Prior to the auction the display area is set up and handouts or catalogues of the items published.  The auction is promoted in the community and promotional information passed out.  A preview time is set up, usually an hour or so prior to the auction, and the sale begins.  Proceeds received are deposited and thank you communications sent out. 

There are some elements that help make the event successful.  A fund raiser always brings in donations.  But if you posture the fund raiser auction as a semi-formal event, the total amount collected will be substantially higher.  There is nothing wrong with a casual auction.  But history shows that people who dress up and view the evening as a social networking fund raiser bid higher.  The end result is a higher overall donation that is raised. 

A nonprofit organization looking to host a fund raiser auction begins with a series of meetings.  The first is with nonprofit staff.  A listing is gathered of people who will be available to help.  Then, pending their availability, schedules are assigned and volunteers solicited to work on specific tasks.  The tasks discussed here focus on promotion and preparation. 

Promotion is probably one of the most important tasks.  It covers a wide range of activity beginning with selection of the date and times of the event.  Search other venues in the community and try to select a date that has very little events taking place.  At the same time be sure to set a date that is far enough in advance for other preparations to take place.  The idea is not to compete with other popular events in the city.  The fewer things on the community calendar the better chances are for attracting a larger bidding audience.

With the date set a series of contacts seeking donations takes place.  Businesses need to be contacted.  I suggest a flyer delivered or mailed to businesses asking for donations.  Some key elements that help prompt donations involve exposure for the business.  If the business name is included in handout booklets that night, listed in the flyers distributed as advertising and mentioned during the evening you should expect community wide involvement. 

If you place yourself in the donating business position it helps.  They will take a deduction for the donation.  But businesses are contacted for donations every time someone wants to host an event.  What will make a difference is the advertising impact for the business.  You might want to go so far as to allow the business to set up a booth that night to help promote their products.  A good rule of thumb is the more exposure that is included, the higher the responses will be with businesses to participate.  

Another activity that coincides with the business contacts is individual.  Again flyers help introduce event.  Contact needs to be made with supporters, members and individuals who have participated or donated in the past.  When speaking with businesses you emphasize exposure and advertising.  Speaking with individuals you should mention the potentials for tax deductions.  A cash donation is never turned down.  But this contact is an attempt to collect items for auction.

People will need to work in the receiving area of the preparation.  That would involve making sure receipts were issued for donations received.  The receipt needs to be specific.  For example, a receipt for a laptop would be described as a Dell Inspiron E1705 laptop and include the serial number if possible.  The receipt needs to include enough identification so there is no question what was actually donated.   

With receipt given the next activity would be to search the Internet, or other sources, to determine the value of the item.  At the same time, the item is cleaned up and a detailed description assigned that will be used in the auction catalogue.  If the item is such that it will be used in promotional materials a picture might be taken for the flyers, etc.  Finally the items are stored waiting physical auction set up. 

Promotional materials including direct mail, posters and flyers are published.  They need to include pictures and other advertising information that will help draw an audience to the auction.  These materials are distributed through each business/individual that made donations.  Follow that up with mailings to all members and past contributors.  Notify the local media using a press release.  If needed, an Internet search will help with press release composition.  Make calls, and respond to calls, as needed continuing to distribute promotional information.

If a dinner is not being prepared by the nonprofit entity I suggest contacting a local caterer.  The caterer is also another source to distribute promotional materials.  The dinner helps make the evening special.  Many people enjoy dressing up for a social evening of support for a nonprofit organization.  It needs to be determined how the dinner will function.  The successful fund raiser auctions I am familiar with set the dinner up in the same area as the auction.  Dinner is served and handled as a social event. 

I recommend charging for the dinner.  I view the dinner as an audience magnet necessary to help bring in people.  In other words I do not suggest trying to make large profits on the meal.  Charge enough to cover caterer costs but do not inflate the dinner cost.  The flyers and other promotional materials should include the dinner time, and the time the evening auction will begin.  This gives people the choice of attending the meal or not.  In most instances people will make a night of it and come for the dinner.  The number of tickets sold will give you an idea of the size of your audience that evening.   

I recommend setting up a series of silent auctions on the side.  People are welcome to browse and bid before, during and immediately after dinner.  The nonprofit organization might also wish to host a couple 50/50 raffles during the early part of the evening as well.  As people arrive they need to register, and receive their bid number as they enter the dining area.  It is always best to get the registration done as people enter the event.  If not, they may not find their way back to the registration table before the auction begins. 

Some nonprofit organizations run silent auctions on the side.  It is a nice added twist for the people bidding to use their bid number.  That way no one can identify who is bidding against them.  This also helps those attending to get in the habit of using that number.  The main auction will top off the evening and they will also use that number as they bid.  Silent auction items also remind people who may have slipped by to go back to the registration area and register.   

Begin the evening with some formal announcements.  People should be seated at the dinner table at this time.  Welcome and thank you for attending types of announcements need to be made.  Any special comments on smoking areas, bathrooms, etc should also be made at this time.  Include a friendly reminder for people to pick up their bid number if they have not done so.  Conclude the opening announcements with prayer, if that is offered before the dinner.

I always try to break up the dinner once or twice with some additional announcements.  That is the time I would briefly mention some of the key sponsors for the evening.  Certainly identify the caterer at this time.  You might also wish to mention a business that might have provided tables, chairs, music, the P/A system or other support.  Don’t keep the audience from eating too long.  But two or three announcements of this nature, lasting may three or four minutes, during dinner is a nice touch.

After dinner you need to make some more announcements.  It is always best to offer a summary of the nonprofit organization and what the evening proceeds will be used for.  Announce the time the silent auction winners will be identified.  Allow a time block big enough for plates, etc to be cleared.  Some people will need to use the bathroom and others might need to step outside and smoke. 

The evening will top off with the live auction.  I suggest two announcements be made setting this up.  The first should be 10 minutes before the auction begins.  A simple “our auction will begin in 10 minutes” statement will work fine.  Then, make another announcement for 5 minutes.  When that time has expired begin introductions of the auctioneer.

The auctioneer will make announcements about the sale.  Expect to hear statements such as sales are final, items must be paid for by the end of the evening, do not remove items until they are paid for and items being sold as it with no guarantee or warrantee.  There will be other announcements made involving the auction process too.  The auctioneer may also spend a little time here allowing people to come back in and settle down before launching the first item.

As the auction progresses continued business/donator acknowledgement needs to be made.  This is often the most valuable part of a business donation.  As their merchandise is being introduced, mention the business.  Other comments may also be made that might prompt the audience to visit that business for service in the future.  A word of caution:  take the time to learn about each contributing business.  Do not give a four minute commercial for one business and only a thirty second intro for another.  Try to have some positive comments for all contributing businesses. 

The conclusion of the evening is equally important.  Those attending should experience a smooth check out.  It is nice to have a little bag full of hand out items to give them as you thank them for coming.  The bag can contain key chains, pens, scratch pads and other hand out materials you might have from the contributing businesses.  The bag is another way to try to get some of the business advertising into the hands of the audience. 

Any unsold items can be stored and used for silent auction items at other events.  They may be donated to another nonprofit organization.  If the item can be used by a needy family the nonprofit organization may donate it to them.  Unsold items can also be listed on eBay or Craigslist for sale.  The final resort would be to donate to the local Salvation Army. 

As people registered they provided address information.  Be sure to send out thank you cards or another kind of acknowledgement.  At the same time make detailed notes of the event.  Identify the caterer, businesses/individuals that made donations and other people who helped.  Be sure to include narratives on what went wrong, what you would change if another fund raiser auction were planned and what went well.  These are the same notes you will refer to the next time you consider hosting a fund raising auction.  The more detailed your notes the easier it will be to set up the next one.