Article

Opinion: Please, Stop Doing Auctions This Year

Charity auctions have been a staple of nonprofit fundraising for years. Silent auctions, live auctions, and combos of both are simply a big part of how traditional fundraising is done.

But if we’ve learned anything during the past few months of COVID, it’s that “the way we’ve always done it” isn’t going to work anymore.

Instead of running an auction that saps your resources and staff time, it’s time to focus on sustainable fundraising that makes sense in the COVID world.

We’re against nonprofit auctions this year because of three major reasons. Read on to see if you’re…sold on our take (HAHA, that is an auction pun).

1. It’s A Serious Pain To Manage

The ideal fundraising strategy is one that is an engine — you put in minimal time and energy on a regular basis, but it keeps generating donations weekly. Your job as a fundraiser is to find and hone that strategy.

Unfortunately, if you’re running an auction, your focus will be on dozens of small tasks that don’t really fit your mission. 

You are effectively a social event planner instead.

Instead of focusing on your organization and its needs, you’re seeking out gifts, setting up pricing, finding an auctioneer, creating bid sheets, and a thousand other nitpicky projects that can take months to plan, while taking you away from connecting with donors.

Does all that time and effort pay off in the end? Let’s take a look at some numbers.

The first major challenge with auctions is that you won’t be earning the real value of the items. 

In general, fundraisers expect to make 75% of a live auction item’s value, and only 50% of a silent auction item’s value. That means you’ve done all this work to get something donated to you that’s worth $100, but you’re only raising $50 from it. 

Why not refocus efforts to just get the full $100?

And that’s only if you get good auction items. You can spend hours reaching out to item donors and ending up with items that don’t even sell. 

Your job is to raise funds for your organization, and to do this effectively you want to have the highest return-on-investment (ROI). 

Ideally, that includes implementing strategies that go beyond one-time gifts. According to Fundraising & Philanthropy Magazine, events have one of the worst ROIs of all fundraising activities. For every $1 spent, you get back $3.43. 

Compare that to general donations, where your ROI is $19.11 per dollar spent, or building up gifts from major donors, which returns $33.33 per dollar spent, or even email fundraising, which returns $40 per $1 spent. 

Any way you slice it: you’re wasting time and money by holding auction events.

2. Zero Mission Alignment

But there’s more that’s wrong with auctions than bad ROI. 

As a fundraiser, you know that one-time gifts are lovely, but they don’t build a strong foundation for your organization. You want to create connections and build donor relationships. Your donors should care about your mission.

Auctions are a horrible way to do this. 

It’s rare that the items have any connection to your mission, which means that people are only there because they want stuff. All you get is a one-time gift from someone who wanted to have a fun evening and get a deal. 

This is an old style of start-stop project fundraising. It doesn’t create momentum, and it doesn’t give you donors who will make multiple gifts.

Why not spend your time on mission-driven fundraising that gets you long-term donors? Digital fundraising is all about building those strong relationships that will sustain you into the future. Some alternative strategies include:

3. This Is The Wrong Time

Oh hey, did you remember that we’re in the middle of a pandemic? 

Your fundraising strategy is going to be different in 2020 because COVID has changed all of our lives. It has also made this the worst year ever to try to hold an auction.

In-person events are out for the rest of the year thanks to social distancing, and while it’s possible to host an online auction, it is definitely not the ideal way to have one. 

If your audience is used to participating at a live auction, they may be hesitant to make the move to a virtual space now that everything is digital. Plus, when they’re not in a room with the thrill of socializing (and a couple of drinks in hand) they are far less likely to spend.

Even if your audience is on board for an online auction, this is a particularly challenging time to put together an auction. Small businesses are struggling. According to Main Street America, “Of the nation’s approximately 30 million small businesses, nearly 7.5 million small businesses may be at risk of closing permanently over the coming five months, and 3.5 million are at risk of closure in the next two months.” Almost 80% of small businesses are temporarily closed. 

Imagine reaching out to a small business that’s barely scraping by and asking them to make a donation. 

Not a good look. 

Even your normal donors may have to duck out this year thanks to COVID’s massive impact. You’ll be left with a smaller auction and worse items than usual.

And then there’s the question of what kinds of items you’d even be able to offer. The most popular auction items are usually experiences and travel. How many people are going to excitedly bid on that Disney vacation package when we have no idea what will be open and how safe it will be to travel? Who will bid on restaurant gift cards if we can’t go out to eat?

People don’t really want more stuff, and the really exciting auction items aren’t a possibility in 2020. Your ROI will suffer, and donors will be turned off by a dull auction.

Do Something Different

Stop doing auctions this year. There are way more effective ways to raise funds for your organization.

You’ll save yourself a lot of time, headaches, and money by leaning further into the peer-to-peer strategy, donation pages, and recurring giving. Increase your ROI plus raise more sustainable funds for the long run by ditching the auction and focusing on digital fundraising for the long-term.

Here are some articles to help you build up sustainable digital fundraising at your organization:

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