In the realm of event-based fundraising for nonprofits, there are a lot of ways to raise funds. At the invitation of Stephen Nill, CEO at CharityChannel, I’ve been invited to talk honestly about the pros and cons of charity auctions.
As a professional charity auctioneer for six years, how could I resist such an invitation? In my view, when they’re done right, there’s no better way to engage donors in just one night than a fundraising auction.
My goal is to share what I have learned while also setting aside, at least for the “con” part, my natural predisposition in favor of this form of event fundraising. So, with that disclosure, let me dive in!
The Pros of Charity Auctions
Let’s start with the pros:
Inspire Others to Give by Example
The number one reason for an auction is to inspire others to give. Public displays of philanthropy typically inspire others who have similar capacity to help.
When the formula of a charity event is just right, the energy and the feeling in the room can be contagious. You can’t recreate that energy outside of a fundraising event. The energy will draw out priceless new donors and champions of your cause.
Build Valuable Connections with Existing Donors
Charity events are a great way to connect with your existing donors. Personal interactions with your donor base are incredibly valuable. Most organizations focus on their major donors and don’t get to connect with midsized donors. Events are the opportunity to connect with them face to face. These are the biggest advocates and champions of your cause.
Think of your charity event as the ultimate first date. Craft every detail so that potential donors fall in love with you and existing donors fall in love with you all over again.
A charity auction can be viewed, and in my view should be viewed, as a key opportunity to cultivate relationships with prospective donors that will lead to a later solicitation of significant individual charitable contributions far greater than what was contributed at the auction itself.
The Numbers Make Sense
Only have an event if you’re committed to covering the cost from ticket sales. That way, all fundraising activities that occur the day of your event go towards the charity directly, rather than paying for the event. Communicate this in the invitation by printing an asterisk next to the ticket price and clearly stating that the ticket price goes toward event costs only. Make it very clear on the invitation that the event is for fundraising.
A Great Way to Share Your Organization’s Vision
Visions are inspiring, and a charity auction is a powerful platform for sharing your organization’s vision. Most charities talk about their mission instead of their vision. Your vision is what impact your organization will have had in three, ten, or more years. These are bigger ideas, fantastical goals, and grand solutions that you hope to obtain.
When you share your vision with donors and invite them to help you achieve it, you create excitement. Excitement and momentum can catapult your event to the next level of attendance and donations.
The Cons of Charity Auctions
Charity auctions are not the right fundraising method for many nonprofits. Typically, they are expensive and always have some hidden costs.
They are also time intensive. Charity auctions, like most event fundraising, take an exorbitant amount of time to plan and are taxing on your team.
If you have a small development team that is already maxed out, a charity auction could put some members them over the edge. A common time for staff to quit is after a fundraising event.
They Are Expensive
Charity events take time, money, and energy, so make sure it’s worth before doing one. You want them to be impressive and memorable to the people that have donated and new potential donors. For many of the donors, this is a night out on the town, so make it awesome!
You’ll need a venue, a top AV system, invitations, centerpieces, and a kick-ass auctioneer. And that’s all before you even feed your guests.
Failure to account for staff time is the biggest mistake most development directors make when they create a budget. Most forget to create a line item for number of hours worked for each staff member, including admin, marketing staff, and the executive team.
The Space Is Crowded with Competition
Charity Auctions have become increasingly trendy. Schools, hospitals, churches, synagogues, and other nonprofits of all sizes are holding charity auctions. Due to their increased popularity, they’ve become trendy and there’s a lot of competition.
Face-to-Face Solicitations Have a Better ROI
Direct solicitation of individual donors for large gifts, assuming optimal cultivation over time, will raise considerably more for a nonprofit organization than will any event, including charity auctions.
The risk with a charity auction, as is typical of all events-based fundraising, is that the focus will be on the event itself to raise funds, while missing the important opportunity to cultivate the right individuals.
A Charity Auction Will Not Magically Solve All Your Fundraising Problems
If you think that a charity auction will be the panacea for your organization’s issues, it won’t.
Charity auctions require a lot of behind the scenes prep work to be successful. You’ll need to fill the room with the right people, who have the capacity to give and the capacity to care. Getting the right people in the seats can be a full-time job.
To have a truly stellar charity auction, you will need to block your calendar for the entire week prior. After the auction, you will need at least one week to process all gifts and logistics.
Another large problem I see are organizations believing that hiring me or another auctioneer will just magically raise tons of cash. I wish this were true, but the only way to get donations at a charity auction is with a fully prepared event and audience. People who have come to dance, get dressed up, party, or just have dinner, usually will not donate.
Sure, part of my job as a consultant is to make the ask, but my real job is to inspire those in the room to dig deeper and care. To inspire people who came thinking they were going to donate $10,000, and get them to give $20,000. The true power of a skilled auctioneer is to not leave a dime on the table.