By :
Tom DiNardo
Benefit auctions are a terrific tool utilized by nonprofits! Over the last couple of years charity auctions have gained prominence as a key source of fundraising.
What are the differences between standard auctions and benefit auctions? There are many differences from the auction event itself (usually somewhat formal), people attending, venue, and the style of the auction chant used by the charity auctioneer. The basic differences are that in a traditional auction the auctioneer starts high to establish value, and then he drops down until he gets someone to bid. At a benefit auction the auctioneer will start at a reasonable wholesale value and go up from there.
Why should your nonprofit consider holding a benefit auction you might ask? There are over 55,000 charity auctions conducted in the United States every year! How’s that for opportunity? Further, charity auctions are a truly ideal way for the nonprofit organization to create opportunities for the public to become intimately aware of the charities mission. Benefit auctions are much less labor intensive than traditional auctions, but they can be equally stressful because you usually have to wear many hats (i.e. Consultant, Babysitter, Peacemaker, Psychologist, Money manager, etc.) in pleasing your guests. This is also something to consider before you decide to put on a benefit auction.
Should I pay a charity auctioneer a percentage or flat fee? I do know that some charity auctioneers will charge a percentage for charity auctions, while some charge only a flat fee, and still others do a combination of both. According to the Association of Fundraising Professionals (AFP), as specified in their Code of Ethics, fundraisers should charge either an hourly rate or flat fee. Of course, this is up to you.
Long ago I used to charge a percentage, but I have moved away from that method of payment to strictly charging
a flat fee plus expenses. Even though I am member of AFP, I realized prior to my joining AFP that my client’s perception of benefit auctioneers who charge a percentage is not always positive. For example, if the charity auction does incredibly well, then the nonprofit client often feels as though you have taken something undeserved and extra from them. When you charge a flat fee your client will know exactly what they are paying upfront, regardless of whether your benefit auction grosses $10,000 or $1,000,000 dollars.
One word of advice I have for all of you is don’t overestimate your abilities as being an expert in a field that you know very little about. I have seen too many nonprofit employees attempt to put on benefit auctions and fail miserably because they thought they knew what they were doing. Never allow yourself to be fooled into a false sense of security. There is no harm informing your fundraising consultant and charity auctioneer that you are a novice. Your charity auctioneer will respect you more for telling them the truth. In the meantime, if you aspire to put on a charity auction make your goals realistic and obtainable and then go for the big events.
Benefit auctions are terrific opportunities raise substantial revenue for your nonprofit organization.
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