Auction Fundraising Simplified

Fundraising Auctions Simplified

By Judy L. Anderson

AuthorHouse™

1663 Liberty Drive

Bloomington, IN 47403

www.authorhouse.com

Phone: 1-800-839-8640

© 2010 Judy L. Anderson. All rights reserved.

No part of this book may be reproduced, stored in a retrieval system, or transmitted by any means without the written permission of the author.

First published by AuthorHouse 4/30/2010

ISBN: 978-1-4520-1240-7 (sc)

ISBN: 9781463462666 (ebk)

Library of Congress Control Number: 2010905466

Printed in the United States of America

Bloomington, Indiana

Introduction

Let’s Have An Auction!

The world of fundraising auctions is a unique dimension in the universe of special events. As with any event, our tendency is to wade in and get started but taking the time to strategize and plan before beginning the push will result in a much bigger payoff.

While each fundraising auction is unique in its own way, most contain common elements. Whether the auction is large or small, whether creating a new auction or revitalizing a longstanding one, whether you are a novice or seasoned auction director, the strategies and systems contained in this book will work for you.

Many of the chapters in Auction Fundraising Simplified are similar to those of its companion book Event Management Simplified. This book differs in that it has been written to specifically address the challenges of producing a successful revenue-generating charity auction. In addition to standard fundraising event components, there are chapters that contain specific strategies and systems regarding procurement of auction items, motivating bidders, and writing of the auction catalog.

Most of the chapters take no more than 15-20 minutes to read and contain detailed how-to information. The examples, systems, and worksheets will help to develop the myriad of details required to manage any kind of fundraising auction or event. Many of the stories are based on real-life experiences of the author and others who share successes and pitfalls they have encountered along the way.

May you have every success and may the information contained in this book help to raise thousands—or even millions—of dollars!

Let Us Hear From You

We welcome your comments, ideas and suggestions. You can reach us via e-mail at powerproductions@comcast.net

or check out our Web site at www.eventsandauctions.com

About The Author

Judy Anderson has more than 20 years of experience as a successful auction and event producer in the public, private and nonprofit sectors. She specializes in large, complex events and charity auctions, but assists events of all kinds and sizes. Her insights have a proven track record of incredible success in the fundraising arena where she has helped raise millions of dollars for nonprofit organizations.

Anderson does auction and event management, consulting, and training work under the business name of Power Productions and is based in Portland, Oregon. She holds a Certificate in Festival and Event Management from the University of Oregon and frequently speaks at conferences and meetings about events, fundraising, and related topics.

Anderson is the author of two books. Auction Fundraising Simplified relates specifically to the elements of fundraising auctions and events held to benefit nonprofit organizations. A companion book, Event Management Simplified, has been used as a course text by academic institutions including the University of Oregon’s Festival and Event Management Certificate program and Mt. Hood Community College’s Hospitality and Tourism curriculum. It contains much of the same information as the auction book and is directed toward special events in general rather than to fundraisers.

Credits

Kristin Anderson, Copy Editor

Heather Barta & Brenden Hyde, Circle Triangle Square Graphic Design

Maria Corvallis, Peter Corvallis Productions

Gavin D’Avanther, Hollywood Lighting Services

Dona Eadus, Copy Editor

Patty Larkins, Copy Editor

Royce Mason III, Royce’s Prop Shop

Tim Neill, Opus Solutions

Becky Stroebel-Johnson, Sterling Talent Enterprises

Paul Vogel, Vogel Communications

Contents

Chapter 1—Strategic Beginnings

Chapter 2-Timelines and Work Lists

Chapter 3-Financial & Legal Matters

Chapter 4—Committees

Chapter 5-Sponsorship

Chapter 6-Marketing & Promotions

Chapter 7—Graphic Design & Printing

Chapter 8—Procurement

Chapter 9—Catalog & Addendum

Chapter 10—Venues

Chapter 11—Food & Beverage

Chapter 12-Production & Entertainment

Chapter 13-Site Planning & Logistics

Chapter 14-Volunteers

Chapter 15—The Auction

Chapter 16-Post-Auction Activity

Chapter 1—Strategic Beginnings

Take It One Step At A Time

A Little Background Information

All across the United States, nonprofit organizations are using auctions as a popular means of raising revenue. It is estimated that there are more than 200,000 charity auctions every year that raise billions of dollars for worthy causes.

Many auctions are produced under the auspices of the development department of a nonprofit organization. Others are stand alone events that benefit charitable causes such as churches, schools, associations, and more. While many standard event management practices are used, there are elements unique to auctions that other events don’t contain. One example of this is the procurement of auction items—a primary element critical to success.

To achieve or exceed fundraising expectations requires a highly organized auction director, strong leadership, great items to sell, and an audience prepared to bid. The tendency is to just wade in and get started, but you must take the time to strategize and develop a plan of action if you want to succeed. If you are merely putting on a party and not applying strategy to every single component of the auction, you will leave thousands of dollars on the table.

Every auction should begin with organization, strategies and a structure. This chapter will help to:

Identify the Auction Director

Set up organizational systems

Define types of auctions and auction elements

Orchestrate the planning process

Develop critical fundraising strategy

"Never believe

that a few caring people can’t change the world. For indeed, that’s all who ever have."

Margaret Mead

The Auction Director

Someone has to be in charge. The auction director can be a paid staff person, an independent contractor, or a high level volunteer. Many nonprofit organizations can’t afford a full time event manager, and a consultant or independent contractor is a viable option. Auctions need to have an organized framework in order to function properly and having a trained professional can significantly enhance your success and reduce the level of stress.

In many cases—and particularly in the nonprofit arena—the event manager has the opportunity to raise money to cover his/her salary and benefits. Professional auction consultants or contractors can often offset the cost of their services by knowing ways to save money and time or to show the organization how to do it themselves.

The auction director has day-to-day responsibility, is the main contact, and tracks every single detail. He/she should be qualified, rather than someone who just wants to help out because it sounds like fun.

Desired qualifications for an auction director include:

•   Exceptional organizational and communication skills

•   Previous experience in events of similar size and/or scope

•   A successful track record of fundraising through events

•   Ability to commit the time required for successful outcome

•   Personal characteristics of integrity and ethics

•   Understanding of budget processes and cost control

•   Team player who is open to new ideas

•   A sense of humor!

NOTES

•   Positive recommendations from previous event affiliations

It is also beneficial if the auction director has:

•   Contacts to leverage for sponsors, donors, etc.

•   Problem solving and negotiating skills

•   Access to/knowledge of resources and suppliers

•   Ability to delegate responsibility/accountability

•   Knowledge of personal limits

It is not helpful if the auction director thinks they have to control everything or is doing it for their own glory. This will not gain commitment on the part of others! Every person who comes in contact with the auction should feel their involvement is valued. The core foundation of any event is building positive relationships for long-term success.

Whether the auction director is staff, a contractor, or a volunteer their role should be clearly defined in a job description. An example of an Auction Director job description appears at the end of this chapter.

It’s A Business

One of the best pieces of advice to remember is that even though it may feel like a party, treat the event like a business. Auctions are the business of fundraising. Raise every dollar you can, and save every dollar you can, because each one adds to a successful bottom line.

Leadership Selection

NOTES

An auction can be viewed as a specialized business requiring strong leaders and good employees to flourish. In applying this to the selection of our chairpersons, the higher the level of involvement by people who are successful in their own right, the better the auction’s chances for success. Careful selection of chairpersons and committee members will pay off in big dividends. Part of any business strategy is to leverage relationships that help the business to grow. Auctions are no different.

If the auction has chairpersons, they should be carefully selected for their individual abilities to help build the event. Since the purpose of the auction is to raise money, it is critical to have strong leaders who can provide focus and support, or who have direct access to strong leaders. Key players have already built a community for themselves and can help extend your network.

Selection of chairpersons by the take-whoever-is-available method is counter-productive because the well-being of the event is partially dependent on their personal efforts. Others also take their cue from how much the leaders are doing. Another positive aspect is that business or community leaders who are acting as chairpersons want their name to be associated with events that are successful and they will work extra hard to ensure this outcome.

For small events with a minimal budget, the power level of chairpersons is not as critical as that of a multi-level, multi-day event that must raise substantial sponsorship revenue and motivate large numbers of people to attend or purchase products. Either way, the chairpersons need to be working partners that help make things happen and should not just be acting as figureheads.

Setting Up The Systems

Master Notebook

For many auction directors, a notebook system works well. With experience, you can operate from any method you choose. Task lists, notes and other materials are kept in their relevant sections and are moved out to regular file folders to relieve bulk as they are completed or no longer needed.

NOTES

This notebook is used as a daily working tool. The notebook should have about a 3-4" ring size and dividers to separate the contents into the sections you desire.

Use the following divider or folder options or customize them for your specific needs. Some, like procurement, registration, or sponsorship will need their own separate notebooks.

If this isn’t a new auction, in the divided sections you would want to begin with copies of the previous year’s materials that will need to be recreated for the current event cycle.

There are two reasons to use copies. One is that you don’t want to be carrying around original documents (such as contracts) in case the notebook gets misplaced. The second is that you can jot notes directly onto the copies as you think of them. Use these to generate the new materials and put the new version in the notebook. Then either file or toss out the marked up copy. It’s often helpful to retain these, if only for a short time, to remember what the original version said or looked like.

If you’re one of those people who keeps everything on a computer, that’s fine, but it’s not always as handy as opening the notebook.

NOTES

For new auctions, you can use the same system, but will operate more from timelines and work lists, inserting copies of documents into the notebook as they are created. In the beginning, a great many things will be missing, but use section lists to keep track. You can also put samples from other events into your notebook as resources.

Section Lists

NOTE: All items on section lists should be included on work lists as described in the next chapter.

For example, in the Sponsor section of the notebook, a limited version of your section list might read as follows. Tasks requiring creation of documents are indicated by an *asterisk.

*Create a list of potential cash sponsors and contacts *Create a list of potential in-kind sponsors and contacts Determine who will personally contact each prospect *Develop benefits list based on sponsor levels *Develop sponsor proposal packet and background information *Develop confirmation forms Determine who will sign letters Establish timeframe for follow up Determine sponsor gifts

Sponsor logo or ad received (if in the program) *Confirmation letter outlining sponsor’s role with background

information regarding parking, VIP privileges, etc. *Post-event thank you letter accompanied by sponsor gift

As tasks are completed and documents are created, highlight them off the list and put copies in the notebook. Remember, this is your working tool, so set it up in the way that works best for you.

If you don’t use a notebook system, you can create folders (like dividers) on your computer and in your file cabinet.

Computer Programs

NOTES

For day-to-day office management, you can keep track of records and generate the materials and documents needed by using basic computer software programs like MS Word® and Excel®. It is also helpful to have a desktop publishing program to create quick flyers and meeting notices.

Auctions also require the maintenance of specialized data. An auction software program can save hours of work but may not be a necessary expense for small auctions, which can often get by using an Excel® spreadsheet.

More sophisticated auction software programs like Greater Giving® or Maestrosoft® allow the tracking of both procurement and auction sales, as well as the registration of guests. If maintenance of large quantities of data is required, these kinds of programs can be invaluable, are well worth the cost (about $1000), and come with tech support. They can also be used for other events as well as auctions. Ask for a reference from an organization that uses it to make sure it will meet your needs and functions as promised.

Most of these software programs have templates for creating catalogs and bid sheets, but they aren’t very versatile if you want a customized look. See the Procurement & Catalog chapters for other alternatives to create the auction catalog.

Preliminary Research

Prior to the Strategic Planning session, you’ll want answers to some rudimentary questions. Do some research in advance. If not, include these kinds of questions in the creative planning process.

• What is our reason for doing this?

If the answer is because it sounds like fun, stop right there. While auctions can be fun, they require substantial amounts of time, manpower and resources to be successful. They must also be feasible in order to attract sponsors, donors and attendees.

NOTES

If the answer is because we want to raise funds for a specific charity, because there is nothing like it in our community, because we have a niche market, or a similar statement, then proceed with caution.

Other questions for consideration:

•   What time of year might be our best chance for success? Most auctions are held in the fall or the spring.

•   Are we just like other auctions, or are we unique?

•   When are other auctions taking place?

•   Are there open dates in the community’s event calendar? Don’t choose dates of major sporting events, national or religious holidays, events at major venues, a nationally televised event, or the like which might impact attendance.

•   What permits or insurance are required?

The more unique you can make the auction, the better its chance for success. Don’t do the same thing that every other organization in town is doing. Events that offer opportunities to see and experience new things have much better odds. If you’re freshening up an older event, add some new twists to revitalize interest.

Auction Categories

Most auctions fall into two main categories—general auctions or special interest auctions. General auctions are a conglomeration of things packaged together for sale that have been procured from nearly any source. Special interest auctions procure the majority of their items in a specific realm (such as wine or art) though there may be other things included in auction packages (e.g. trip to a wine region or art mecca).

General auctions may have auction lots that contain wine, art or other special interest items.

Auction Elements

NOTES

Webster’s defines an auction as a public sale at which items are sold one by one, each going to the last and highest of a series of competing bidders.

The following are the most traditional ways to accomplish bidding activity:

Live/Oral Auction. These are conducted verbally by a professional auctioneer whose purpose is to obtain the highest bid possible from the bidding audience. Live auctions are especially exciting when high interest auction lots generate extremely large bids or create a bidding war between several persons. Strategies for building the live auction are covered in the Procurement chapter. Tips for hiring a professional auctioneer are located at the end of this chapter.

Silent Auction. Auction items are displayed on tables along with bid sheets. Auction guests bid on items of interest according to predetermined incremental bids on the bid sheet. This creates a competitive bidding environment and obtains higher sales.

We recommend always including a Guaranteed Bid option for silent auction lots.

Super Silent Auction. This concept features a limited number of auction lots that don’t qualify for the live auction, but are of greater value or interest than lots in the silent auction. This gives great flexibility to larger auctions who may not know what to do with the in-between level and provides another bidding component.

NOTES

Super silent auctions are typically located at the back of the same room in which the live auction is held, and stay open later than the closing for the regular silent auction. Auction lots are displayed and bid sheets are used. The close of bidding is set for approximately 1 hour after the live auction begins. This allows time for data entry and posting of winning bids prior to close of the live auction.

Guaranteed Bid. A guaranteed bid provides the means for a bidder to absolutely ensure they are successful by writing their bid number next to the guaranteed bid price. This bid is placed in a prominent location on the bid sheet (usually at the bottom or top). The guaranteed bid amount is normally between 150-200% or more of the actual value of the auction lot. This is especially true of highly desirable auction lots that will get a lot of action because bidders are willing to pay substantially more to obtain them. The guaranteed bid is used only in silent or super silent auctions, not live auctions.

Proxy Bid. Many auctions allow persons who aren’t actually attending the auction to bid on auction items. These bidders receive a catalog or data file prior to the auction date. They are assigned a bidder number and a volunteer (the proxy) bids on their behalf based on select auction lots and the amount the bidder is willing to spend to obtain them. If successful, the bidder is notified of their success and the bidder’s credit card is charged for the purchases. They can also have the proxy make cash pledges on their behalf.

Internet/Webcast/Televised Auction. These auction formats are gaining popularity but do have a service cost associated with their production. The best example of an Internet auction is EBay where the highest bid before close takes the item and the process is very straightforward.

The adaptation of this is the private Webcast auction where the bidder’s display provides the interface between the live auction and the remote bidder. Examples of companies that provide these services are www.greatergiving.com,www.usaweb.com

, and Bidz.com.

NOTES

Television auctions involve a live bidding audience and a secondary bidding audience who simultaneously watch the event on television. Bids are made by telephone or electronically. A list of auction items is posted on large boards and bids are entered as they increase. The winning bidder is notified once bidding on the items has closed.

Strategy Equals Success

Strategy is critical to sustaining an auction’s longevity and revenue producing power. Implementing strategy in conjunction with leveraging every component of the event helps to achieve a much more successful outcome. Some call it the creative process, strategic planning, or other names. By applying strategy, the auction planning becomes more exciting than just nuts and bolts and adds a thinking outside the box perspective.

Regardless of whether the event is new or not, you’ll want to hold a creative session to brainstorm ideas. If the event is new, there will be much to discuss and a substantial amount of time will be required to follow up on questions generated during the discussion (e.g. how much things cost, site or date availability, manpower requirements, etc.). If the event already has a history, creative planning is done annually to enhance existing elements or to add new ones.

At the initial session, you’ll want to:

•   Determine the auction name (if new)

•   Select a date or time of year

•   Identify the event demographic (who is the audience?)

•   Set goals and measurable outcomes

•   Clarify what the auction is and where it is going

•   Discuss strategies to accomplish the desired outcomes

Remember that employing creative strategy is not only for the current event cycle. It will lay groundwork for the future as well. Think ahead and use this time to access the brainpower of others to build the framework of your event. Thinking outside of the box is a major key to success.

NOTES

AN EXAMPLE OF THINKING OUTSIDE THE BOX: It was the job of the current co-chairs of a big charity fundraiser to recruit their successors and help them transition into their new role. This was

done on a rotation basis with a two-year commitment. One chairman was always remaining, and one would drop off with a new person taking their place and being trained up to become the senior chairperson the following year.

The co-chairs went to the CEO of a big bakery company and asked him to become an event chair. He said Absolutely Not for two years in a row, but the third year they first went to a large grocery chain and asked the CEO of that company to be a chairperson. He agreed. Then they went back to the CEO of the bakery and asked again. He said yes this time, and can you guess why? The rationale behind this strategy was that the big grocery chain was the bakery’s biggest customer and if the CEO of that company had already agreed, the CEO of the bakery couldn’t say no. It worked!

Who Should Attend The Strategy Meeting

Invite enough people (8-10 total is a good number) to have a lively, thorough discussion, but not so many as to be cumbersome. The initial group involved often becomes the executive committee as the auction moves forward.

Be selective about who participates and keep the future in mind. Include individuals of varying perspectives—those who are big picture thinkers as well as those who are more detail oriented. Don’t forget those who may be able to significantly benefit the event as potential chairs or committee chairs, sponsors, key staff or volunteers.

As long as you’re going to be thinking, think big.

Donald Trump

If your auction is not new, be sure to include at least a few key people who have been attendees, sponsors, former chairpersons, or high level volunteers. This can translate into renewed interest on their part, helps to keep things fresh and exciting, and maintains the institutional memory of the event. Try to avoid having the same people being part of this activity year after year. You constantly need a few new people with new ideas to keep the event from going stale.

The Strategy Session

Identify the facilitator in advance. This person should be a recognized leader (often the chairperson) who can keep things moving while being respectful of individual opinions.

Prior to the strategic planning session. Distribute an agenda of the main topics for discussion (7-10 working days is ideal). Allocate specific blocks of time for discussing each agenda item. This avoids getting hung up on the first items and never getting to the last items. Place the most important items at the beginning of the agenda.

During the session. Allow adequate time and avoid interruptions (no cell phones, emailing, or text messaging allowed!). Two or three hours are usually enough to get a good start if you stick to the agenda and have a good facilitator. People tend to lose their focus and creativity if the meeting runs too long. The point is to keep moving and not get bogged down on any one thing.

All ideas are equal no matter how outlandish they may seem. Sometimes the craziest ideas are what make the most money. It’s just a matter of figuring out the logistics of how to make them work.

Stay away from detailed money discussions. The session is to generate ideas and talking about money stops the creative process.

At the end of the session, there should be a fairly large list the group has produced that should be pared down to a realistic level. As people commit to do things, write them down, assign a deadline, and hold them accountable (who, what, and by when).

NOTES

Once the initial session has been completed, the list should be documented, then reviewed and revised at a later time, along with an accompanying budget. Don’t expect the plan to remain exactly the same as when you began. Strategies will evolve and change as auction components are clearly defined and things begin to move forward.

Setting Realistic Goals

Set no more than five major goals to which measurable outcomes are attached. Remember that goals aren’t always about money! They can be for purposes such as marketing, building a donor base, giving of awards or recognition, etc. An example of a monetary goal is:

GOAL: To raise $35,000 for the XYZ Charity

OUTCOME: A net profit of $10,000 or more after expenses

Once detailed expense projections are identified in the budget, you will know how much revenue in total the auction must generate in order to