7 Elements of a Nonprofit Fundraising Auction from Basics to Breakdown

Dana Guterman

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May 1, 2024

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8 minutes

Nonprofit Trends

How To Nonprofit

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Here at Funraise, we get a lot of questions about auctions, raffles, and the like. And it makes sense: successful charity auctions are a huge investment of resources. Time, money, energy, quaint vacation rentals—you’ll need them all if you want a successful auction experience.

If you’re on the auction fence, we can help you decide if an auction is the right fundraising path for you—and if you should invest those hard-earned dollars into auction-specific tools.

Charity auction basics

Since you’re considering a charity auction, you’d probably like to begin at the beginning. A fundraising auction shouldn't keep you up at night; start with choosing an in-person, hybrid auction, or online auction. Then make a decision on live or silent. Get your hands on a few items. Once you get the basics down, then you can grow from there.

Whether you’re running a one-person show (we see you, nonprofit start-ups!) or employing thousands of folks around the world (any mega-churches here?), an auction can be a great way to raise money and build community.
There are several types of auctions. They can be in-person events or virtual events, and they can be live or silent.
Auctions are flexible. You can auction off 10 items or 200 (but also that’s way too many unless you just foraged for 200 truffles in Italy and need to sell ‘em off stat). Plus, you can combine formats—say, an online auction with a live-streamed bidding component—to meet your unique organizational needs.
To procure items for your auction, start with your donor base. From there, check out local businesses and spread that net!
Just like regular donations, auction item donations and bids are tax-deductible—but the IRS says that bidders can only deduct the amount once it exceeds an item’s fair market value.
If you’re hosting an online auction, you’ll need a dedicated online auction site as well as dedicated auction software. And while we love a good paddle raise at a live auction, mobile bidding tools can also be helpful. Funraise Auctions is your best bet for friendly online auction software that's easy to use for nonprofiteers and auction participants alike.
Some key ingredients for a successful auction: lots of promotion (get thee some sponsors!), an awesome array of auction items (say that three times fast), careful budgeting, and some really solid communication skills.

Benefits of a nonprofit auction

Is an auction right for your organization? Let's take a look at the benefits of hosting an auction: Your org can raise money quickly, build community, spread awareness, save money, bring in new donors, and have a ton of fun. The benefits of a nonprofit auction likely outweigh the negatives.

Raise money quickly.

Unlike campaigns that take place over several weeks or recurring gifts that trickle in once a month, auctions make dough fast. Once bidding wraps up, you can raise a lot of money in one fell swoop.

Build community.

Want to get your donor community riled up for a good cause? With a great host and a great assortment of items, a live auction can attract a super-pumped crowd that gets to mix and mingle with each other and staff members.

Communicate your mission.

By getting many of your donors (and potential donors) in one place at the same time, whether it’s an online on in-person auction, you have a rare platform to share your mission and vision with your whole community at once.

Online auctions are cost-effective.

With no rental and catering fees, an online auction can be done on the cheap—though it still requires a commitment of time.

Attract new donors.

An auction is a great way to encourage new donors to get involved with your organization. And if you take your auction online, you can attract an even wider audience.

Have fun!

Ultimately, auctions can be a lot of fun. Who doesn’t love winning prizes for a good cause? It’s a thrill.

Drawbacks of a nonprofit auction

An auction probably sounds pretty great by now. But there are drawbacks, and it’s important to consider them: cost (in time, resources, and money), keeping donors engaged, and the unexpected. When it comes to a charity fundraising auction, you've always got to factor in something going wrong or being thrown off in some way.

It can be pricey.

An auctioneer, rental space, emcee, catering, decorations, specialized software—an auction can really add up. Before you sink a lot of money into it, make sure it’s going to (literally) pay off.

It takes time.

Even a simple online auction takes a lot of time to plan, from choosing a format to soliciting and distributing items to sending thank-you notes.

Engagement can be a struggle.

Especially with live online auctions, you’ll have your work cut out for you keeping everyone engaged and motivated to bid. We'll dive into engagement tactics a little further down the article.

Things can go wrong.

As with any big event, things can go wrong—much more so than, say, when you’re sending your annual end-of-year donation requests. Make sure you have contingency plans for tech issues, staff shortages, inclement weather, and more.

Charity auction legality and compliance

When it comes to auctions, there’s one more area you need to consider, and that’s staying within the bounds of the law. Depending on where you are, your local or state laws may affect your fundraising efforts, activities like auctioning or raffling, and may require different types of record keeping.

Here are a few things to keep in mind if you want to protect yourself—and a few resources to check out if you want to learn more. We can't be responsible for providing legal advice, though, so definitely do your due diligence!

You need a license to sell alcohol.
Prior to soliciting auction items, consider writing up a donation acceptance policy detailing what you can and can’t accept. This way, you won’t feel obligated to auction off the three pygmy goats your neighbor wants to donate. (But we’d totally take them if you don’t want them. Just saying.)
Make sure you have the necessary insurance policies in place.
Donors who win items can claim a charitable contribution deduction—but only for amounts greater than the item’s fair market value. Donors who donate items get a donation receipt for anything worth more than $250.
Legalized games of chance are regulated activities, so know what’s allowed and not allowed in your state before you plan a roulette night.

Questions to shape your auction

Ready to auction it up? Excellent! You’ll need to ask yourself a few questions before you can really get down to planning—and then lots more after that.

Why should we choose to take our charity auction event online?
Do we want a live auction or a silent auction?
Should the online auction be a standalone event or part of a larger event, like an in-person gala or digital fundraising campaign?
If it’s an online auction, what should the timeframe be?
Should we include a raffle?
Should we include a direct appeal?
What is the best online charity auction website software?

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Tips for an awesome online charity auction event

Executing a successful auction means hitting the ground running with all the decisions you made as you planned your fundraising auction. Ensure that the experience is great for attendees by getting started early, procuring unique auction items, making it easy to bid, and prioritizing accessibility.

Start early.

An auction shouldn’t be rushed—after all, great auctioneers book out early, donor calendars book up months in advance, and soliciting great items takes time.

Combine items into unique packages.

People want to bid on things they can’t just walk into a store and buy, so combine a range of items to get a bigger bang for your buck. A bottle of champagne, gift card for a mani-pedi, and bathrobe aren’t so exciting on their own. Combine them (and why not throw in a chocolate bar or two?) for a spa day charity auction item idea.

Make a successful auction website

Bring fundraising auctions to life and increase revenue with easy, modern silent auction websites from Funraise Auctions. Auction websites are the best way to showcase your fundraiser's charity auction items, collect bids, and facilitate seamless payments. With Funraise Auctions, your website is connected to your auction management software, a CRM, and industry-leading data analysis and reporting tools, aka Fundraising Intelligence.

Craft experiences you can’t buy.

A private tasting from a local chef, a garden party at a board member’s super snazzy summer home—think about what people can’t get in stores.

Invest in a great auctioneer.

If you’re doing a live auction, a great auctioneer will more than pay for themselves. Interview a few to be sure you’re getting one who really connects with your cause and will put in the work to help you organize the auction to get the biggest payoff.

Bobby D. Ehlert, World Champion Auctioneer, is pretty convincing in pitching pro auctioneers. Listen up!

"Nonprofits have always used the free auctioneer, the funny uncle or the board member or whatnot. They're probably really good at whatever their profession is, but you don't go look for the cheapest brain surgeon.

I was working with an organization that had never really had a professional auctioneer before. It was kind of like the weatherman or somebody. So I bring a whole team in. It was amazing—we raised $50,000, $100,000 more than they'd ever raised."

This is just one of the insightful nuggets that Bobby D. shared with Funraise CEO and Co-founder Justin Wheeler in a conversation all about nonprofit auctions.

Advertise your items.

Once you have some awesome items, let people know! If someone sees that they can bid on a week at their dream beach house, you’d better believe they’ll RSVP “yes.”

Accessibility is key.

Whether your event is an online or in-person auction, it should welcoming and inclusive for anyone and everyone.

Turn to your volunteers.

Feeling stressed already? That’s where your amazing volunteers come in! An auction is a perfect time to ask for their services, from addressing envelopes to gift-wrapping packages.

Bonus! Three auctions secrets of successful fundraisers

Now that you've gone down the nonprofit auction rabbit hole, you're probably interested in some more advanced tactics to take your auction to the next level. Lucky you, we've got guidance on the three things that are most likely to increase your revenue while saving you time, money, and headaches. Which is why they're the things successful nonprofiteers pull out of their sleeves when it's go time.

Engage your auction attendees
Make checkout a breeze
Intelligent follow-up is your friend

1. Make bidding fun and engaging

How can event organizers check in regularly with auction guests to maintain donor engagement? Well, for one thing, assigning each bidder an anonymous number can bring excitement and competition to the bidding process of a silent auction fundraiser. It can also add a mysterious element to bidding wars, driving up auction proceeds by making competitive bidding more intriguing.

Another advanced tactic to bring bidding up through engagement is implementing scoreboards, countdown clocks, leaderboards, and progress bars. When donors see their names flash on the screen as the high bidder (donor), they get a surge of adrenaline. When they see get an outbid notification, they're driven to bid again. All of these tools gamify the auction experience, motivating bidders to support the organization's mission with higher and higher bids.

If you haven't tried texting as a way to drive bidding and engage auction guests at your silent auction, try it out! Text reminders to auction guests when bidding is about to close on their favorite items, leveraging your mobile bidding software to keep participants engaged and actively involved in the auction process. Don't sleep on the automated text alerts that let donors know that they've been outbid! When you combine those texts with dedicated auction software, you end up with a smooth, streamlined auction experience.

Finally, get yourself an auctioneer or an emcee. Not only are they trained for just this type of event, their goal is to bring in the dough! And guess what else an auctioneer does: takes one more job off of your plate. Less stress, more donations.

2. Make checkout a breeze

This is one of those secrets that makes people in the know look like suave, polished, genius pros. It's just your charity auction software.

Seriously. If you want to improve the donor experience at checkout, especially in terms of payment processing, get ahead of it. And by that, we mean do it ahead of time.

Before donors can bid, they have to provide a valid payment method that will automatically be charged at the close of the auction. Boom.

There are lots of other articles that will tell you to "set up designated areas for mobile checkout as well as for cash or check payments." No. Get the payment methods ahead of time. They'll recommend that you "implement multiple checkout lines to prevent long queues and streamline the payment process." OMG, no. Do not make your donors wait in line to pay for an auction item.

Donors can have a great experience at checkout during a fundraising event if they're not stressing over handing over a credit card or counting out ones. Use your dedicated auction software to make this the easiest part of the auction, not the most painful. That's literally what the software is for.

Use Funraise Auctions to securely process payments, enable donors to confirm the items they've won, and retrieve receipts conveniently on their mobile devices.

3. Make follow-up work for you

Just like with any other fundraising event, there are some key steps you need to take post-auction to reflect on your fundraising goals and update supporters.

But why?

Well, first, providing updates on how their contributions are making a difference can enhance donor retention and potentially lead to future donations. Next, if you hit your fundraising goals, a debrief allows you to focus on identifying ways to enhance your strategy further to raise even more revenue in the future.

And how?

Shoot out an email! Text your closest donors. Post on social media. However you do it, just send an update to supporters informing them of the amount raised and how this revenue will support your mission. Transparent communication about the impact of donations will strengthen your donor relationships.

Charity auctions: FAQs (written and answered by 100% human writer people)

Can a small nonprofit hold a charity auction?

Absolutely! One of the great things about auctions is that they’re flexible, so you can make them as intimate or as grandiose as you want. If you’re planning an auction solo or with a very small team, we suggest keeping it simple and bringing in lots of volunteers to help out.

How does a virtual auction work?

A lot like an in-person auction, but everything takes place online. Once you have a dedicated site set up, you can handle everything from registration to donation receipts with your handy nonprofit CRM. You can look into charity auction software and mobile bidding tools like Funraise Auctions, or you can livestream the whole shebang.

What staff do you need for an auction?

In an ideal world, you’d have an event lead, volunteer coordinator, marketing lead, tech lead, day-of coordinator, host/auctioneer, and volunteers galore. In many a nonprofit reality, most of those roles might be filled by volunteers—and that’s okay!

How do you procure items for the auction?

Lots of hard work! And you’ll need help, so this is where you really rely on those volunteers. Assemble a procurement team, write up a wishlist that includes a range of items, and then start asking. Reach out to donors first, then local businesses. Have board members and volunteers reach out to their network. Then, it’s all about determination (i.e., lots of letters and phone calls).

Need a breakdown of that headache? We've got everything you need for the best silent auction items: auction item ideas, procurement steps, and templates to make your ask successful.

What do you do after the auction?

Thank everyone who came, whether they donated or not. Let them know how they can stay involved with your cause. Debrief with your team so you know what worked and didn’t next time around. Review all that juicy data using Funraise's Fundraising Intelligence to identify trends and opportunities as well as potential donor opportunities. Take a breather before you start something new.

Why are charity auction sites important?

Charity auction sites are important because they provide one central place where your valued donors can bid on items, track their bids, and make donations. Fundraising charity auction software also often provides tools for marketing, registration, and payment processing, streamlining the entire auction process. And the best dedicated auction software is definitely Funraise Auctions.