The possibilities of online auctions are endless as people who never have heard of your nonprofit can be converted into supporters without any additional cost.

By: Eric Gazin

Charity auctions have been a part of the nonprofit world for a long time and for good reason. They are enjoyable for attendees, they add some excitement before dinner galas, and they have the potential to raise a great deal of much needed revenue for an organization. So, what are nonprofits doing differently now that has the potential to completely change this equation? They’re using the Internet to create online fundraising auctions.

What are the advantages of an online auction over a traditional one? The first is to reduce overhead, challenges and costs of doing an event in person. Another is, instead of having typically 200-1,000 attendees at an event mingling by the bid sheets, a nonprofit now has the potential for Internet users worldwide to take part in the auction. One might ask: Does this translate into higher bid prices? Reports from eBay show the same items bringing in 15%-100% higher bid prices and a substantially higher final bid price when the money goes to a good cause.

There are some interesting dynamics that might explain eBay’s reports. There are the dedicated web surfers who search for charity listings and bid to help out just about any cause. Then there are some people bidding who aren’t especially interested in the cause that the auction benefits but want the item up for sale. In addition, a nonprofit can send out an email blast to its supporters, announcing the auction event, directing them via a link to their group’s charity auction. All these factors create a “perfect storm” of interest, driving the prices up through competition and the spirit of philanthropy.

What items sell well for online auctions? Hotel stays, restaurant certificates, golf outings, entertainment memorabilia, and cars–both new and used–the list is quite exhaustive. Artwork and other items that are big or heavy may not do well, and require one to search completed auctions to see what similar items have sold for. Be careful not to auction any restricted or prohibited items. These include items like alcohol, some airline tickets (allowed when packaged with other items to create an experience), live animals, raffle tickets, and more.

If the organization has connections with celebrities, sports stars, or politicians, auctioning a lunch with that person can bring in tremendous bids. Of course, such an auction needs plenty of disclaimers and perhaps even a background check on the winning bidder. The media may even pick up on the auction, creating lots of publicity for the organization.

Another major advantage of an online auction is awareness of the nonprofit cause. Capturing new supporters is labor intensive and expensive. With each charity auction, an organization can brand its cause far and wide with links to the website, prominently display email addresses, and use a limitless amount of space to educate the public about how the funds raised will do much good. The possibilities are endless, as people who never have heard of the nonprofit can be converted into supporters without any additional cost.

While there are several online auction sites, eBay Giving Works (http://givingworks.ebay.com), the division at eBay dedicated to 501 (c) 3 auctions, is where the action is for nonprofits. There are now millions of dollars a year in auctions listed there that stand to benefit any of the more than 5,800 U.S. nonprofits that have registered with MissionFish (www.missionfish.org), a nonprofit which verifies auctioneers.

Registering with MissionFish is free, and also a requirement for a nonprofit wishing to hold an eBay charity auction, in most circumstances. MissionFish provides a vital service, verifying that each nonprofit is legitimate, which instills confidence in bidders that funds from the auction will truly benefit the charity. For the time being, only U.S. based and registered nonprofits can benefit, but later this year, this option will also become available for charities in the United Kingdom.

eBay is the biggest by far in this arena, but there are a few other players worth mentioning. Overstock.com is not just for “overstocked” items, they have very competitive listing fees and hands-on customer service that can be very helpful for nonprofits getting started listing their items there. Yahoo, as well as smaller websites that are more specialized, such as Charityfolks.com or cMarket, offer various options that can move the silent and live auction gala online. Yet, if the ultimate goal is raising the most funds and creating the highest level of awareness for your cause, it’s hard to top eBay.

Whether planning to test the waters with an eBay auction event on its own, or seeking outside assistance in the process, I highly recommend every nonprofit register at MissionFish. Complete strangers may see your cause and decide to give a percentage of their auction sales to it. If the whole process seems a bit overwhelming, there are experienced eBay Trading Assistants who specify they work with charities, as well as some agencies that can handle the entire process for you, including acquiring luxury items for the nonprofit and then listing them. The possibilities are seemingly endless.

I believe there will always be a place for the nonprofit traditional auction since it’s a great way to give back to one’s supporters. Yet, if raising the most funds and attracting new members are goals, online auctions offer much that a traditional auction cannot compete with. Expect to see a seismic shift towards this new fundraising option as more nonprofits find an online answer to their fundraising needs.

Eric Gazin is president of a premier auction management agency called Auction Cause (www.auctioncause.com), as well as the eBay Trading Assistant company called Gazin Auctions (www.gazinauctions.com), both based in Los Angeles. He welcomes questions about online auctions at eric@auctioncause.com or (323) 655-0554.

For answers to your fundraising questions, please call CDS Director of Marketing Libby Skelley at at 800-761-3833, or contact her via e-mail at lcs@cdsfunds.com. Custom Development Solutions, Inc. (CDS) has become one of North America's best and most sought after fundraising consulting firms specializing in the strategic planning and tactical execution of capital campaigns for non-profits throughout the United States and Canada. More information on CDS can be found on the web at www.cdsfunds.com.