Setting Seth Godin straight on the subject of charity auctions

I stumbled across a May 2008 post from Seth Godin called Marketing the Charity Auction. (It’s short. You might want to read it first.)

In the article, Godin writes that an auction fundraiser “never leads to a wildly successful auction, because the story that’s told is too small.”

He suggests that the nature of an auction is the lure of a deal. Charities play upon this, selling the public on bargains instead of selling philanthropy. In turn, the guests become shoppers looking for a way to snag a cheap vacation or inexpensive activity. 

Godin encourages nonprofits to fill their tables with guests who want to overpay for the merchandise offered. As an example of a group doing it right, he references the Robin Hood Foundation, which raised $56+ million at its May 27, 2008 gala. 

He doesn’t offer any specific tactics for attracting guests like Jeff Zucker (president of NBC) or Ken Langone (venture capitalist), who both attended the New York gala, but instead suggests that the average auction planner highlights the “come and get a deal” aspect instead of promoting the “satisfaction of overpaying” angle.

Let’s get a few things straight.

First, I agree with Godin that many nonprofits can work on developing their audience. It’s an area that can always be tweaked; it’s core to running a good auction. It’s so critical that it’s part of the foundation strategy I teach on planning profitable auctions.

But I strongly disagree that auctions can’t be wildly successful. The data proves otherwise.

I can only speak for the charities I serve, but if any of my clients were actively promoting the “get a deal” angle described, my client and I would have a heart-to-heart talk about the nature of their event. “Is this a party you’re throwing,” I’d be asking, “or a fundraiser? I thought our goal was to raise money.”

As mentioned, Godin wrote his remarks in May 2008. According to some, the recession had begun a few months prior, perhaps December 2007 or earlier. 

I did some research to see how my auctions were performing during this period in the recession. I pulled data for all my April and May 2008 auctions. 

• April 6, 2008 – Women’s shelter. Items sell for 108% of value.
• April 11, 2008 – Homeless shelter. Items sell for 292% of value
• April 17, 2008 – Women’s business group. Items sell for 109% of value. 
• April 18, 2008 – Catholic school. Items sell for 169% of value.
• April 12, 2008 – Wildlife group. Items sell for 115% of value
• April 25, 2008 – Social services group. Items sell for 94% of value.
• April 26, 2008 – Health organization. Items sell for 60% of value.
• April 27, 2008 – Homeless shelter. Items sell for 115% of value.
• May 3, 2008 – Private family foundation. No auction; only a fund a need.
• May 3, 2008 – Professional sports team foundation. Items sell for 103% of value.
• May 8, 2008 – Women’s special interest group. Items sell for 169% of value.
• May 9, 2008 – Social services group. Items sell for 142% of value.
• May 10, 2008 – Performing arts organization. Items sell for 93% of value.

Of these 13 galas, 12 had auctions. Of those 12, the average sale was 131% of value. That means that if I were to have offered a $1.00 bill onstage at that time, it would have sold for $1.31.

That IS wildly successful. 

To be upfront, none of my events raised $56 million. But the Robin Hood Foundation is one of the largest — if not the THE largest — gala in the USA. It’s not an ideal comparison. 

And besides, I’m not regularly serving clients in New York.  For my clientele, around $2 million is the top. 

Still, the majority of the items sold in our auctions were purchased at price points much higher than their stated value.

And before anyone says I’m undervaluing my items, let it be known that I’m one of these sticklers for stated values.   I advocate that even “free” items (like David Letterman tickets, which Godin mentions in the article) are assigned a fair, reasonable value. 

Case in point, one of the items sold during this time was two tickets to a dress rehearsal of Saturday Night Live. The estimated valued on those free tickets  was $1000 – hardly chump change. I sold them for $3250. 

Vacations have more established values. A Montego Bay villa renting for $6000 sold for $8500. A Napa Valley home renting for $1750 a week sold for $4500.

Is this NOT philanthropy? 

Yes, this IS philanthropy. 

There are no “deals” here. 

So here’s where Godin went wrong.

• Perhaps Godin is referring to silent auctions.

If so, I’d agree with him. Silent auctions aren’t big money makers and in many events should be discarded. It’s difficult to yield over 100% of value in a silent auction, even with fancy technology and other tricks I teach.

• Or perhaps he’s suggesting that a direct fund a need “ask” is a better approach than an auction. (A direct ask was one of the primary tactics used by the Robin Hood Foundation.)

I think that a fund a need is a great addition to a charity auction, but not necessarily a replacement. I say that, even though I oversee a few galas each year that don’t have a live auction component. They ONLY have a fund a need. 

Both can be important philanthropic opportunities. One isn’t “more important” than the other and comparing the two is like comparing apples to oranges.

In conclusion, yes, any auction planner can and should work on developing her core supportive audience. One can always find room for improvement. And yes, promoting the mission and ways to support it are critical. 

But she can also rest easy knowing that auctions are a tremendous method of raising funds.