One of the most popular fundraising activities is the benefit auction. Few things can capitalize on the competitive nature of people while also giving them incentives to donate to a greater cause like a silent of live auction benefiting a nonprofit organization. However, for every wildly successful benefit auction, there are plenty that fall a bit flat in execution.
Sometimes the reason an auction falls short is because the promise of sought after auction items doesn’t quite hold up to the reality of the items that make it on the auction table. Even if sought after prizes are available, an auction can still fail to bring in the donations if not executed correctly. Understanding the art and science of benefit auctions can make all the difference between hitting goals and falling flat. There is certainly an art to running a successful auction, but nonprofit teams often overlook the science to successful fundraising. The science includes using data and profitability best practices to create a goal-smashing benefit auction.
Let’s explore four tips to help you and your event team understand the secret science of charity benefit auctions that can help even the most experienced nonprofit fundraiser host their most profitable auction—silent or live—yet.
Let’s cover a few foundational elements to get you started. Before lifting a single finger to begin the planning process, your auction organizers must understand the audience and their buying interests before procuring the auction items. By understanding your donors and researching what they’re most interested in (think: travel, events or concerts, dinners, and even technology), your team can create a compelling benefit auction that draws in the attendees to not only the items up for bid, but your nonprofit organization’s mission. And with the right strategies and resources in place, the entire auction process—from the first bid to the last guest leaving with dream concert tickets in hand—will be seamless.
While most analyzing and measuring takes place after an event concludes, it’s key to put tracking mechanisms in place well before the event even starts. With so much planning and resources going into pulling off the perfect benefit auction, having analytics and reporting in place is key to determining if the event was worth it—and what could be improved the next time in order to bring in even more revenue for the nonprofit’s cause.
There are three key post-event metrics to keep track of, including:
A robust benefit auction and event planning software can make this process simple from start to finish and can also generate a number of reports to provide detailed insight into both the auction items as well as the generous donors.
Walk into any successful retail store and you can immediately notice the time and effort spent creating the look and feel of the store. You notice the displays, the smells, and even the perfect lighting. When your team is planning the next benefit auction, put on your retailer hat and work to create that same sort of welcoming environment.
Essentially, a benefit auction is a “one-night-only” store front. Auction managers set out displays with all of the items up for bidding, make sure everything looks just right, and then open the doors for the guests—but for just one night. While it may seem like a lot of work for just a few hours, the details can pay dividends by the end of the night. When your event team is considering the environment, think about these important retail-like elements:
Another retailer mindset that’s important to consider is establishing revenue targets—or as nonprofits are concerned—donation goals. Just like stores have monthly and quarterly targets that they aim for, a nonprofit should also have a donation goal in mind that attendees are made aware of throughout the night so they know how their bidding is impacting the nonprofit’s bottom line. By setting hourly revenue targets, organizers can keep the auction focused on the main goal while tracking and measuring the overall target.
Regardless of whether a live or silent auction, organizers need to enter profitability mode and consider how many items should be auctioned off in order to maximize the attention and bidding impulses of the audience. The recommended best practice for live auctions is to only include as many items as your auctioneer can get through in 45 minutes, which tends equal between 7 and 10 items. For a silent auction, consider one package for every two potential bidders, ensuring there is a good ratio of items that ensures your organization gets the most out of competitive bidding.
If your team has collected data from prior auctions, then it’s easy to determine which items are typically most popular. A sure fire best practice to generate more revenue is to auction off multiples of the most popular items. Selling the same item to multiple donors can result in 3-4 times the revenue—not to mention creating very happy donors in the process. Rather than attract a single high bidder, multiple bidders can pay a more reasonable amount and collectively, raise more donations for the cause. For example, one vacation package sells to one bidder for $6,000; sell the same package to two bidders for $5,000 each, and you gain $4,000 in profit. Of course, it’s important to make sure your donors agree to donate multiple packages. But with a passionate ask coupled with impactful numbers to show how the multiple packages grows your bottom line AND how those funds power your cause—many donors will jump on board. Having a profitability mindset that maximizes every single item (and every minute of the auction) can pay off for your nonprofit’s cause in the long-run.
Your nonprofit’s guests likely attend many events and galas throughout the year. That’s why creating an exceptional overall experience will help your team make a huge impact in creating a positive experience for bidders that will end up working to the cause’s advantage. Thankfully, you don’t have to reinvent the wheel each time your nonprofit holds a benefit auction. By reviewing auction performance and by using analytics, you can easily unlock buying trends, donor patterns, and better understand auction winners and losers.
Interested in learning more tips about the science and art of profitable auctions? Check out: