One school tried an experiment with its catalog.  Instead of opting for the traditional binding, the committee decided to use a ring.

The thinking was that the auction catalog would be easier to carry.  A guest could loop the ring through a finger and still hold a beverage of choice while milling through the reception.

The idea sounded good in theory but didn’t work well in practice.  “We didn’t like it,” one committee member said.

On the downside, the pages were more difficult to manage.  Flipping through the catalog to find an item or section wasn’t easy.  And overall, the group didn’t like the look and style.

If you’d like to try the idea, the concept works best on smaller auction catalogs.  When you have fewer pages, using a a small ring is a novelty and “performance” (i.e. the ability to flip through the pages) isn’t as critical.  But for a standard catalog with 15+ pages, the ring becomes unwieldy.  

Test it out before you use it. Print out your charity auction catalog and latch it with a ring before you decide.  It’s an interesting look but you might decide you prefer the old standby:  binding.

© Red Apple Auctions Co.  All Rights Reserved.

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If so, you already heard one of my issues with some nonprofit online auction vendors and electronic bidding companies (a variation is also called handheld bidding or mobile bidding).

It comes down to functionality. 

I’m a fan of a feature called “extended bidding” which — as I type this — few vendors seem to offer in online auction or mobile bidding products.

What is extended bidding? 

If a bid is placed on an item in the final minutes (for sake of example, let’s say five minutes) of the auction, the bidding on that item will be extended for an additional five minutes.  Bidding concludes when no new bid has been placed within a five minute time frame. 

Other items in the auction will close as advertised, but the most heavily contested items will continue to accept bids, pushing the sale price higher and higher. 

In contrast, some nonprofit auction vendors run their bidding platforms similar to online sites like eBay.  If an auction is scheduled to end at 8 PM, it ends at 8 PM.  Bidders place their bids, hoping to be the last bid accepted by the system before the auction closes at 8 PM.

But that’s not really an auction. It’s a game about timing, which rewards the last bidder before a specific cut-off time.  Even though the runner-up bidder might have bid again, the system doesn’t allow extensions. 

In contrast, a true auction encourages bidders to bid back-and-forth, increasing the bid until only one is willing to pay the price.  

Some items in a nonprofit auction will always draw last minute bids.  It might be a reserved parking space on the school’s campus, an exceptional wine lot, or a heavenly trip.  If you could extend the bidding on those popular items, you could raise a few hundred to a few thousand dollars more.  

How do I know?  Because we see this often happen in our traditional “manual” silent auction closings.

In short, if you’re going to use technology, use the system that ensures you’ll raise the most.  Find a vendor that includes extended bidding as part of its offering.

© Red Apple Auctions Co.  All Rights Reserved.

P.S.  Extended bidding was one of many concepts taught in the Best Practices in Mobile Bidding for Nonprofit Silent Auction teleclass. 

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I’ve been asked many questions of late about mobile bidding and e-bidding devices in the silent auction.  So much so, I’m hosting a free mobile bidding teleclass (“Best Practices in Mobile Bidding for your Nonprofit Silent Auctions”)  next Wednesday (May 2, 2012) to share best practices learned on the front lines of silent auctions using the technology.

In preparation for that call, I want to clarify the terms.

Some people refer to e-bidding and mobile bidding (mobile bidding is also called handheld bidding) as the same thing. They are different.

E-bidding may or may not be mobile, but mobile bidding is always electronic.

With e-bidding, guests bid on silent auction items using a device.  The device might be 1) an iPad (which would be mobile, unless affixed to the silent auction table), 2) a personal cell phone or a phone provided by the vendor (also mobile), or 3) stationary terminals set up in the silent auction area (not mobile). 

For the latter, the arrangement is one stationary terminal (a “terminal” meaning an iPad or touch-screen computer) per handful of silent auction items or per silent auction item.

If you’re ready to embrace e-bidding — and I’ll mention this on the call, too — I advocate making the technology mobile, unless you’re prepared to set-up a stationary terminal for each silent auction package.

In other words, if you’re going to set up one iPad (or touch screen computer)-per-item to allow bidding, feel free to embrace e-bidding in a non-mobile style. The big payoff and glamor isn’t there, but you can do it.

But don’t add a few kiosks and ask guests to use one bidding kiosk per, say, 5 items.  After all, who would want to move to this “improved” e-bid technology, only to have guests to queue up in front of a terminal, waiting to place a bid on an item?   That’s not progress.

Of course, buying 100 iPads for your 100 silent auction packages might not be a financially savvy, either. Borrowing is a better option.  A colleague told me that he knew one nonprofit which was loaned dozens of iPads for their gala to set up this 1-to-1 ratio.

Is there an underwriting opportunity in there somewhere? Perhaps.  (Though if I were a business, I’d prefer to underwrite the auctioneer so each time she got on the mic, she’d also thank me for underwriting her service fee.)

Ready to apply what I’ve been learning?  Join me on the “Best Practices in Mobile Bidding for your Nonprofit Silent Auctions” teleclass

© 2012 Red Apple Auctions Co.  All Rights Reserved.

They confidently stated their tax professionals would be able to find deductions overlooked by your previous tax preparer.

Sounds familiar. If you’ve ever talked with more than one tax expert, you probably noticed that each one has a different interpretation of what you can and cannot do, legally. Sometimes what is legal in tax law seems to depend on who you talk to.

I share this because as we delve into the issue of whether you should list item values in your nonprofit auction catalog, remember that 1) your nonprofit’s accountant might recommend something different than what I’ve heard, 2) I’m not a tax expert, 3) tax laws change frequently.

The topic of printing package values often leads to heated discussions. The argument against is two-fold.

1. Some auction items have a straightforward value. The bike is $300. The home rents for $2000 per week. That bottle of wine retails at $60. Naysayers of printing values are concerned that guests won’t pay more for that bike / trip / wine than the printed value.

2. If an item’s value is attributable to the intrinsic worth of the experience – a la “Headmaster for the Day” or “Lunch with the mayor” – the committee’s debate rages. Oftentimes groups resort to labeling these as “priceless” items rather than list a $0 value.

My understanding (based on courses I’ve taken) is that the IRS wants nonprofits to list the value of auction donations in the catalog or in some other location (perhaps a Powerpoint slide or table display) that can be viewed by the bidder before he decides to bid.

Some groups may feel they comply with the regulations by putting the value of the item on the receipt. This means that the winning bidder officially learns of an item’s value after he raises his hand, bids, and buys.

My understanding is that this would not meet the IRS requirement. One instructor shared that the failure to comply with this rule meant that – if caught – the nonprofit (not the audited taxpayer) would pay the tax, interest, and penalty on any deduction unfairly taken by a taxpayer. Whoa!

Beyond any laws, let’s consider one perk to listing values in a catalog: education.

I’ve found that many bidders underestimate values. So one advantage of listing the value could be that guests begin to comprehend what those trips, baskets, and experiences really do cost.

For official information on nonprofit auctions in the USA, check out the IRS statement at www.IRS.gov: http://www.irs.gov/charities/charitable/article/0,,id=123204,00.html

©2012 Red Apple Auctions Co.  All rights reserved.

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Ready to sell merchandise at your next auction?

I’ve said this a thousand times in the last seven years:  The quicker you can start to think about your nonprofit or school auction as a business, the faster your auction will grow.

Your benefit auction should be treated like the money-making venture it is. Marketing, sales, technology, customers … they are all components of your “business.”

And as your auction receives proper TLC, you’ll be looking for ways to add additional revenue to nurture your growing baby.

One revenue stream popular at for-profit enterprises is branded merchandise. Let’s consider how you might adopt this idea.

Branded merchandise refers to items sold at a flat rate. The merchandise is typically themed to the gala itself.

Umbrellas and ballcaps are for sale at this event.

• Stadium chairs
• Tshirts
• Umbrellas
• Ball caps
• Megaphones and mini-foam footballs
• Beer mugs / beer steins and wine glasses
• Sports-like pendants
• Beach towels (great for beach-type themes)
• Tote bags / reusable grocery bag

A vendor who sells giveaways (AKA “tchotchkes”) is going to be able to suggest items in your price point and expected volume.

What will you raise? Revenues will vary based on your sales and price point, but a few hundred dollars to the low thousands isn’t uncommon.

My advice: Ensure that you’re charging enough to raise the intended amount of money. Factor in all costs: the item itself, marketing expenses, and your “labor” in selling it. Realize that even if labor is free because a volunteer will sell the item at a table in your silent auction, you still have an opportunity cost. Is it better to assign your sales-y volunteer to the table so she can pitch $10 beach towels, or would you raise more money having her selling $100 raffle tickets?

The key is to make sure selling these products isn’t more hassle than it’s worth.



© 2012 Red Apple Auctions Co. All Rights Reserved.

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