FundClass Archives:

How and Why Does One Decide To Hold An Auction?

Mickey Rooney turns to Judy Garland and asks, "How do we save the school/farm/club?" "Pop Jones will lend us the theatre", she replies, "We could put on a show". Mickey's face breaks into a wide grin as he looks at her goofily and admires the brilliance of this original suggestion. The scene fades to black and returns to a cast of thousands impeccably tailored, dancing in synch to original music in a packed theatre larger than Radio City Music Hall.

If only life were that easy.

The birth of a new auction is a long and labored process. I would suggest that a year planning is an appropriate time frame. The first step, as always, is to create a rough budget. This has many of the same components as that of a benefit dinner. Again I recommend Mindy Kuth's discussion on "Benefits Mean More Than Money" as a great resource. The difference is that you will have additional income from silent and live auctions while you will probably not be able to charge as much for tickets.

I have found that the drive for an auction is often board instigated. The chances are that the board member(s) in question will have attended another event and believe that they can achieve the same results. The hard questions that need to be asked include:

What return will justify this effort? Creating an event of any magnitude will take the better part of a year. It becomes easier as the years go on, but not that much easier.

To what constituency do you have access that makes it feasible to hold an auction? This can be on either side of the equation. For example your board members might have access to the travel industry (the manager of a local hotel can probably arrange for hotel rooms anywhere within the chain), the restaurant business, the arts community or the wine industry. On the other side of the equation is access to a group of people who simply want to get involved. One of the most successful new auctions I have seen comes from the members of a new, affluent gated community that decided they should do something for their neighboring communities.

Do you need to host a themed auction? By that I mean holding a wine, art, travel restaurant, or other targeted auction. The reason these are effective is that it allows you to call on two communities; your natural supporters and the supporters of your particular target. As a gross generalization I would say that the less "warm and fuzzy" is your cause, the greater the need to focus the auction. The classic example of this is arts organizations. There is a long tradition of them presenting wine auctions. For the vintners there is the expectation that lovers of the arts are their natural customers, and for the charity there is the hope that people will pay a premium to show respect for the vintners. Having a vintner in attendance will allow their lot to sell for approximately twice what it would reach if they were not there. Basic rule: People give money to people not causes.

Do you need to partner your event? Be realistic about your potential. You will need plenty of lots, bidders and volunteers. You strength may be in only one of these areas. In that case partner with other organizations. A public television station (able to get lots and volunteers) teams with a pediatric hospital (bidders and emotional commitment). There are plenty of examples of this and most work well. The proviso is: WRITE A CONTRACT EARLY BEFORE ANY MONEY IS INVOLVED.

Can you raise the seed money? I recommend that you need to raise 30% of the money you hope to net as the seed money for the first year.

Finally, can you find the location and time for an auction? This is not as easy as it should be.

Well I am off to the wine country today, but will continue tomorrow. Please write with questions or anecdotes. Though I love to hear myself speak, what auctioneer doesn't, what you have to say or ask is more interesting.

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Tom

You're talking very big events here. For many of us, auctions are an addition to a special event rather than the whole event (although with an organization like mine that's not entirely warm and fuzzy, a wine and cheese soiree' is sounding better the more you talk about it).

One instance is a golf tournament I worked with where the co-sponsor was a television station with a heavy sports promotional budget. As a result we got shirts autographed by the Harlem Globe trotters, golf balls autographed by pro golfers, footballs with Roger Staubach's signature, etc. Throw in a few televisions and some workout equipment from local sporting goods suppliers and we picked up an extra $4,000 over lunch between the morning and evening flight.

The auction was supplied with goods by our sponsor teams that wouldn't accept "No" for an answer. If the potential sponsor didn't buy a sponsorship, then most of the time he or she donated stuff that we used in the auction. It was a nice way to squeeze a little more cash out of the golf tournament.

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Linda

Several years ago I was on the board of our local library and we were facing some serious financial concerns. We decided to have an auction to help alleviate this problem. We faced a lot of opposition from people who insisted it would fail and that we wouldn't make any money. Well, we had no reason to believe we would make money -- the economy was bad and people were moving away like rats jumping ship in search of a more promising future. But, we persisted and we succeeded beyond our wildest dreams. In response to the opposition we really focused on our goals for this event and made them something achievable. Our goals were:

1. To get people into the library, especially those who had never been in it before.

2. To have fun - this was going to be the event of the year - the one everyone would be talking about.

Well, we accomplished these goals way beyond our expectations and we made an incredible amount of money. Since then this has become an annual event and is known as the event of the year. People travel from across the state to attend.

I think that the initial success of this event was dependent upon our goals (and good people). Establishing goals defines your purpose and I've learned since when planning events that the goal of having fun and enjoying the planning and work involved in the event assures its success. When people are having a good time they spend more money for your cause and they feel good about your organization and their relationship to it.

Oh, yes, this auction takes place every year in a community of less than 6000 and grows in success every year -- each year bringing significantly more money than the last. There are other organizations in the community doing auctions and competing for the donors dollars but none have matched the library's success. While I am no longer involved in the planning and work of this auction I am pleased to see its continued success and there is no way I'd miss attending one.

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Margot

That is such an uplifting message!! Thank you so much for sharing! Could you tell me just one more thing? What types of things do you auction?

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Stephanie

I also am interested in ideas for auction items or ways to make auctions more effective. We have a small auction ($3500 profit) for our k-6 school. We have everything from massages to trips for 2 and everything in between. I wonder if there are any creative ideas that have good response. Our market is primarily working middle income families, so we try to judge the item to see if it will interest our patrons. Any ideas?

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Anonymous

In 2 days our private Christian 7-12 school will hold it's fourth annual auction. Our families are mostly middle class with over 45% receiving tuition assistance. Each year we have achieved tremendous success even though we are in the middle of an auction heavy area. We attribute our success to the following:

1) Prayer.

2) Aggressive recruitment of outside bidders to attend our auction. We try our best to keep our families from filling the seats, always looking for new sources of income.

3) Creative groupings of auction items. We use the basket approach, combining binoculars, coffee, birdhouse, and notebook to create the "Early Morning Birdwatchers Basket".

4) An excellent Auctioneer. Our Auctioneer is a national award winner!

5) Great themes. Many of the surrounding auctions are black tie. This year our theme is rodeo based, and the guests are asked to come in theme dress. Even our dinner consists of chicken, baked beans, cornbread "western fare".

We will make over $80,000.00 this year!!!!

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Haleema

My organization just finished an art auction. Everything was great except for the auction itself that went really wrong. First, the auctioneer suggested for us not to put the market value of works on the exhibit labels next to the works of art. So we only put the value in the catalogue. There were only 4 catalogues for people to consult, so I think that not everybody got to see it.

Some of the works have minimum bid, but we didn't communicate it because we thought that the auctioneer would start the bidding with the minimum bid. However, he started the bid at $100 or $200 for all the works, even the ones that have a minimum bid of $1,000. And if a work of art meets the minimum bid (sold) he banged on the table. If it doesn't, he banged into his hands. But buyers were confused. Some found out after the auction that they didn't get the work they thought they did. A lot of works were not sold because they did not meet minimum bid. And we didn't write down the name of people whose bids did not meet minimum bid so we could not contact them afterwards to see if they wanted to up their offer.

I talked to the auctioneer afterwards. He said the reason he didn't want the retail value to be posted publicly is because when people know the value they tend to not bid over that value. And he started the bid so low because he thought that he could get the price up after people get excited. And he did not cry out loud that some works are not sold because he did not want to embarrass the artists whose works were being auctioned (they were in the audience). He said that he wanted to be more current about how we want the auction to proceed next time.

Which brings me to the questions: how should we have handled the auction?

Should we have publicly posted the minimum bid and the value? Should an auctioneer have explained at the beginning what it means when he put his hammer in his hand as opposed to banging it on the table?

I also noticed that we did not have the right crowd for the art auction: not enough bidders. How do we find and attract the potential art buyers?

Thanks for answering my questions.

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Mary

My sympathies to Haleema and the hard lessons of the art auction.

I have only peripherally been involved in an auction, and just about everything about it annoyed me. Ours was a silent auction.

The real money was made on a handful of insiders who are always doing the work and giving the money. I was flabbergasted at the lowness of the bids. Some first bids were a tenth of the value. Sometimes these came from people with limited finances, but many of the low bids came from wealthy people. As a person of means, I was rather irritated with my peers treating a benefit auction like some sort of bargain sale.

When I approached artists to donate items for the auction, they commented that they seem to be hit up a lot for auctions (maybe this is a reflection of our state).

I am reminded of one of Dear Abby's admonitions: "No one can take advantage of you without your permission."

My guess is that a big part of the magic of an auction rests with the kind of auctioneer who is facilitating this class. Research what works and what doesn't. And plan, plan, plan. Plus don't call me to volunteer!

My organization is doing a benefit concert next week. Our director used to run a music venue where he came to know well-known musicians. Many are his admirers. Next week a nationally known musician is donating the concert plus all his travel expenses, and at a time of year when we'll sell the house. I got business sponsorships to more than cover overhead expenses. Plus we're handing out a program with information about our school and the program being benefited by the concert. So it's a pretty low-work high-return event for our neck of the woods.

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Dave

Many Thanks to Haleema Mini of the Playwrights' Workshop Montreal. I love this letter! It raises so many great issues. Let's go through them one at a time.

"First, the auctioneer suggested for us not to put the market value of works on the exhibit labels next to the works of art. So we only put the value in the catalogue. There were only 4 catalogues for people to consult, so I think not everybody think not everybody got to see it."

This raises one of the "issues" situations that I mentioned in my opening statement. After nearly 20 years I still have not decided the best route.

The options available are:

1) Put the Value.
2) Put the opening bid.
3) Put an estimate (The formula I recommend is 10%down 50% up. Therefore an item that was valued at $100 would have an estimate of $90 - $150. At least you are getting them to think about the higher price.)
4) Put nothing, which is essentially what you did.

The only choice I am sure is wrong is the last. I don't like to put the value because that blares "Stop Bidding", so I have usually select choice two or three. I really love it when you can get an audience trained and you are able to list the opening bid as the full retail and then just move up from there.

Whichever you choose, EVERYONE NEEDS A CATALOGUE. I know it can be expensive, but in this instance you have been able to have it underwritten by either one gallery or a gaggle of galleries.

"However, he started the bid at $100 or $200 for all the works, even the ones that have minimum bid of $1,000."

This is not a bad auction technique. I have used it myself at art auctions for a couple of reasons:

1) The audience stays attentive as they might get a great deal.

2) All artwork is treated the same. You avoid ranking the artists. The artists, (and their significant others in particular), take relative rankings too seriously.

3) Often you have a classic piece offered among all the modern art. A Chagall or Miro Print for example. If you start the bidding for this at the same price as all the other pieces you can pause for a moment and say, "Ladies and Gentleman, I have just offered a $7000 print for $100. Why aren't you all bidding on this? Let's get every paddle up there." Once people have bid once and got over that shy moment there is a much better chance that they will bid again.

"And if a work of art meets the minimum bid (sold) he banged his hammer on the table. If it doesn't, he banged into his hands."

This is silly. If audience knows what it means, then the artist is embarrassed anyway or, if they don't, then confusion reigns. A much better way to have handled this is to have the house, in this case someone from your organization, bid to the minimum amount. It's called shilling but it is legal if there is a minimum bid. At a commercial auction the auctioneer will take bids from "the chandelier" until they reach minimum bid. That can be confusing at a charity auction and I simply have someone bid to that amount.

Two additional points. One of problems with art auctions is that donated works are frequently priced as though they were about to be sold to a sheik at a gallery in Beverly Hills. You may well need to do some research to see what the fair market value of a particular piece is. Remember most art galleries sell at a discount. In the US, an artist can only deduct the cost of materials when donating to charity. If they demand too high a minimum bid then turn the piece down.

Two. Art is rarely bought on a whim. It has to be presold. It is something that couples have to discuss, and so they need time to make their decision.

One of the reasons that the civic art programs have worked so well is that the pieces have been displayed prominently around town creating a provenance and a buzz about the art.

Lastly, How to get the right bidders. That will be a whole segment of this class...Later.

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Haleema

Dave,

Thanks for your inspiring answer.

I think "shilling" is a great idea. But does that mean that I need to let the artists, some of whom are in the audience, know in advance that we are using this practice? Otherwise, it would be confusing because they might think that a work is sold when in fact it is the shiller who bids until it reaches the minimum bid. So do I need to identify someone to do the shilling way beforehand in order to let the artists know?

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Dave

Sure let the artists know that you will be doing this, but really impress on them that they will be doing both your cause and themselves a favor by keeping a minimum bids (technical term is "The Reserve") to a minimum. If nothing else it will give them a realistic comparison to their contemporaries.

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Jim

I agree wholeheartedly with your response. Too often the artist or the donor will turn off those around him with negative comments and negative body language if his piece isn't bringing a premium. Honestly, an auction is the purest form of economics and price discovery as you always gather a group of willing buyers and a willing seller. Everyone benefits when the price is allowed to seek it's own level. Open minded artists (or whoever the seller is) can learn a lot about themselves and their product at such a forum. I've been impressed with the way you start a lot of wine at your auctions. You may ask for an opening bid of $300 when you know the lot will sell for $3,000 or more. It isn't important where you start...........it's where you stop. Provided, of course, that the bid increments are proportionate to where you want to go.

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Dave

Will everyone who is organizing an auction please just check in.

I am offering a prize for the best Auction "War Story". Now is the time to rat out your committee, your board, the audience, the auctioneer or whomever. The prize is either a $100 gift certificate from Amazon.com, or a donation to your next auction.

We learn more through stories than lectures.

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Dave

Tom,

Many thanks for your comments.

Tom wrote:

"You're talking very big events here."

There are no small events! Forget fundraising; just think about how much work goes into inviting a few people around for dinner. I think there is a gender bias in this. Guys do not understand why it takes a year to plan a wedding. They just don't. It is always really hard work to create a powerful, positive social environment, and this is the minimum requirement for a successful auction.

I agree. On the other hand, just because it is an addendum to another event, is no reason not to maximize the return on the auction. I work at several Golf Tournament Auctions and they are a really interesting sub-set of fundraising.

"One instance is a golf tournament I worked with where the co-sponsor was a television station with a heavy sports promotional budget. As a result we got shirts autographed by the Harlem Globe trotters, golf balls autographed by pro golfers, footballs with Roger Staubach's signature, etc."

These used to be the staple items. In fact there is a company on the net, www.celebrityauctions.com , that specializes in arranging for these items. The only problem is that eBay has lacerated this market. On any given day you can find plenty of memorabilia from virtually any sports figure at a reasonable cost.

"We picked up an extra $4,000 over lunch between the morning and evening flight."

Hopefully by the end of this class your goal will be to make double at the same event without much additional effort. For example could the TV Station have arranged for a round of golf with a sports celebrity? Another lot could have been to arrange to go with the Sport Reporter to a sporting event, joining them during post game interviews. How about selling the rights to being the 1st Foursome at next years tournament, which allows the winner to choose their tee-off time as well as some easy to arrange special treatment. You can also auction a "Get out of the Sand trap free card", or a free lift over a particularly nasty water hazard.

We will soon be getting to auction lot development, but I want to point out a couple of characteristics of lots I recommend adding. The goal of every auction lot is to have a "priceless" component. This often involves access to a person or place that you can only reach through the good offices of the charity.

The other characteristic reflected in these lots is that THEY COST NOTHING. We will talk more about this next week when we get into Lot Development.

Auction Success - What Works

There are several secrets to the success of our auction:

1. Attitude.

2. An outstanding auctioneer -- he is the entertainment and each year he comes up with some new thing to get the audience/bidders actively involved in the auction.

3. Each year the auction committee strives to make the donors feel special and important -- we know that businesses and artist are always being asked to donate - so from the very first auction we asked ourselves what we could do to make them feel good about participating.

4. The guests who come to bid are also made to feel special -- like they are part of something meaningful and important.

5. One of the fun things that set this auction apart from any I have ever attended is the opportunity for donors to jump in and sell their item -- audience participation is encouraged, too. For example, a fishing trip package might have the donor dressed in fishing gear and telling a tall tale about the one that got away. Every community has people who love to ham it up -- and they are good at showing the auction items. -- Bidders will often challenge each other on an item -- all in fun. We have a mother and her daughter who will bid against each other and get the rest of the audience laughing at their antics.

6. Creative packaging adds to the value of items being auctioned, too. For example, cross country ski rental with lessons, the use of a private mountain cabin, and a gourmet picnic. I like the idea of the bird watchers basket someone mentioned. A local bed and breakfast teamed up with a gourmet club, an individual with a sleigh and horse -- plus a few other businesses to offer a great package.

7. I also think you need to limit the length of the auction -- there seems to be a fine line that you can go over and then you lose your bidders -- they are done and want to leave before you are ready to have them go. I think it is better to have them wishing for more than eager to leave.

An auction -- even if it isn't successful is a lot of hard work - I think it is a big challenge to sustain your volunteers through the end -- including the follow up -- and have them feel good about what they have done. Does anybody have ideas about how to do this?

The Structure of Auctions

Most of my time is involved in helping organizations plan their auction. While each event is unique, there are certain principles that apply to all. There are five main areas to an auction and while they are obviously inter-connected they are sufficiently distinct that some organizations have used them as a model for structuring their auction committees.

The five areas are:

1. Communications.
2. Donor Development.
3. Bidder Recruitment.
4. Event Planning.
5. Organization-Volunteers.

COMMUNICATIONS. Laser beam your message. From the first Save-The-Date card to the final thank-you note you need to be "on message". Therefore the first challenge is to decide what that message will be. There are two main components:

1. The who, what, when and where of the auction. This should also include a basic description of the components of the event. Will there be a silent auction, live auction, raffle etc? Does the event include dinner, buffet, or grazing? How long an event are you planning? Is the auction a themed auction like wine or art? Will there be a theme to the evening such as "Under the Big Top" or "A Masked Ball"? Is it a casual or black tie event? And, most importantly how much money do you hope to raise?
2. What are the goals for the money you raise that night? The more specific your answer the better. In fundraising, you always need to sell the future vision rather than past achievements. Perspective is really important. For example schools often hold auctions to raise money for the scholarship fund. On one level this is obviously an inherently good thing to do and the well-to-do parents should support this effort for purely altruistic reasons. On the other hand, it doesn't hurt to point out that this is the most diverse nation on earth, and that in the future, in order to succeed, the children of these same well-to-do parents will need to be comfortable dealing with a broad array of different ethnic, social and economic groups. Therefore the scholarship fund helps not only the recipients but also the donor.

DONOR DEVELOPMENT. Putting together underwriting and lots for the auction. Let's face it this is most dreaded part of the auction process. It is very board dependent. No organization should expect the development staff to have the contacts, or be owed the favors that makes this possible. The staff is essential is in providing the creativity, routing and tools necessary to empower the board, (or more precisely the small sub-section of the board that will actually do the work).

Creativity is needed in directing those with the connections into how to use them. Ideally every live auction lot should have a component that makes it priceless. This is almost always comes in the form of access to a person or place that is unobtainable except through the good graces of the charity.

"Routing" is deciding who will approach a potential donor and what they should request. This is really important as a good-hearted board member, running amuck can do a lot of damage. Many years ago I ran a wine store in La Jolla near San Diego. The biggest social event of the year was the Jewel Ball. Every year I just hoped that someone I didn't know would be the first person to ask me for a donation. I would immediately respond with a donation that would be large enough to really impress the asker. What they did not know was that, if a good customer had asked first, it would have cost me two or three times as much. If I had made too small a donation they would have known they could have come back to me again. Every person who is going to request a donation needs to have that approved by the-powers-that-be. People quickly become annoyed if they are approached more than once by the same organization.

The tools include everything from the solicitation letter to creating a program for underwriters. I have found that many board members are happy to have requests submitted in their name, they are just reticent about doing so themselves.

BIDDER RECRUITMENT. The best auction lots in the world will not be of any help unless you have the appropriate bidders. Again this is a very board dependent process and the staff cannot be expected to have the necessary contacts. As important as bringing in the right people is educating them prior to the event as to what is expected from them. I don't care how wealthy someone is, if they arrive at an event expecting to spend a thousand dollars, they will not spend $25,000, even if they can well afford it. That is one of the reasons for setting financial goals as part of the message. If the audience has been told in advance that you are aiming to raise $100,000 in fifty lots in the live auction, they can easily do the math.

EVENT PLANNING. Here we look at several issues: Party vs Fundraiser. There is always a tension between these two goals. The most successful auctions resolve the conflict by merging the two. One of my favorite events is the Sonoma Valley Harvest Wine Auction. This is a four-hour auction, which would be excessive except the time is spent by all the vintners staging skits. Some of these are really good and some are simply silly. They are all fun and yet through this frivolity we raise hundreds of thousands of dollars for local causes.

Audience Empowerment. It is so easy to slight someone. Their name is not on the proper list, their request for a vegetarian dinner has been overlooked, the registration process went on too long, and, the worst, at the end of the auction they have to stand in a long slow line to check-out. If you upset someone they have a really simple way to retaliate, they simply don't bid.

Preaching vs. Education. I once did an auction for a Hospice group. The director was an impassioned advocate of hospice and a superb public speaker. Just before the auction started she stood and spoke so movingly about the three things that people fear when confronting death. You could have heard a pin drop. We clung to every word. What she said was true. We were terrified of these three things. She ended, sat down, silence filled the hall and I had to find a way to introduce a dinner for four at a local Italian restaurant.

Sound Quality. This is a recurring nightmare at these events. Auctions need clarity. Unfortunately this is a real challenge for a sound system. The ambient noise level at these events can be excessive, and no amount of sound checks prior to the event can adequately compensate for arrival of several hundred noisy people.

ORGANIZATION/VOLUNTEER MANAGEMENT. Putting on a special event like an auction is like creating a virtual business that comes together for one night and then disbands. That night it may well be the biggest business in town. Imagine opening a restaurant that served food just once a year and trying to make that the best possible eatery. It would be impossible. Then make it more complicated by insisting that the serving staff volunteer their time. Absurd. You couldn't do it. Well that's what you have to do, strive for excellence in the most difficult of circumstances.

These are the five areas I am going to address for the rest of this class. Please keep sending in the questions and/or anecdotes. I will post the first section on communications tomorrow.

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Lisa

David and fellow fundraisers,

I am one of those "small non-profits" Christine Scott mentioned in her opening remarks for this session. We are a small, local animal rescue group further alienated from the mainstream because we are a specific breed rescue. My questions are as follows:

1. Would it be feasible for us to partner with perhaps 2 other small groups or one larger group to hold an auction? I'd like to increase both our donor base and our bidder pool!

2. Would we need a legal and binding contract for such a cooperative effort, to protect everyone involved?

3. If we partnered with a larger group (better known etc.) would it be fair to equally split the profit from the auction as long as our volunteers (we have no paid staff) kept up their end of the pre and post auction work? We do have the ability to raise several fairly substantial "donations" to add to the auctions "resale value".

4. Does a well put together Silent Auction have the ability to bring in good bids if there is a listed reserve bid set?

Thanks so much I am learning a great deal more about Fundraising from all of you and appreciate your wisdom and your wit!

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Dave

Partnering works well with non-competing groups, or under an umbrella organization. Everyone protects their mailing lists. Therefore the choice of Partner would be interesting. Finding an umbrella organization is more feasible. The SPCA would be a possibility. You would trade volunteer help and auction lots for a piece of the action.

Initially I thought that you might have difficulties putting on an event, but I started to think about the love people have for their pets, and the way this might translate into auction lots. I do an event in Napa for the "We Care Animal Shelter". A lot of vintners participate and the catalogue includes a photo of the donor and their pet.

If you do enter any kind of Partnership you will need to work out a contract. This is reasonably easy to do before there is any money on the table. How the proceeds were to be split depends on what each brings to the table.

I am going to be talking about Silent .v. Live Auction when I talk about the numbers. The return on Silent Auctions is rarely close to retail, whereas most of the live auctions I work with earn well over retail.

Thanks for the questions.

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Billie Rae

"1. Would it be feasible for us to partner with perhaps 2 other small groups or one larger group to hold an auction?"

Lisa, here in Anchorage, Alaska we have 4-5 development organizations that often put on special events together. We split the work and profits in several ways. One time, our org. will do the master RSVP list, another time, the venue, etc. We all use our own membership or mailing lists. The only thing merged is the RSV's and of course, the split. We never have a contract. We have also done an annual event, in which, the work rotates to solely one organization (besides the list management). That way, you only have to do the work every 4 years!

We have not done an auction, but often host D.C. Government secretary's or major national or int'l CEO's for a special event. This garners the BIG audience and participation of a very talented group of non-profit organizers.

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Liz

Dave and Classmates,

I'm on a committee planning the first auction for this small npo that fights breast cancer. (one staff member, everyone else is volunteer)

The event is a black tie dinner dance with live and silent auctions - main feature being chairs, designed/decorated/donated by local artists. The event is called the Rare Chair Affair. It's in October, and we're just getting organized.

The organizer of the event wants to use it as a "capacity-builder" for the organization, which is young. She came up with the idea of pairing each "team" chair with a "mentor," - someone who has done these things so often they can do it blindfolded but no longer wants to - with the intent that this year's team chair will be next year's mentor.

As the PR team mentor, I'm pleased to see from Dave's Communications list that we are right on target - thanks, Dave! Except we don't have a goal yet that we want to raise.

Looking forward to learning all of the Do's and don'ts - in time to do it right!

Communications - Laser Beam Your Message

Today we start the in-depth analysis of the five areas that I believe determine the success or failure of an auction. As you know from our previous discussion, the five areas are:

1) Communications.
2) Donor Development.
3) Bidder Recruitment.
4) Event Planning.
5) Organization-Volunteers.

Today I am going to focus on the first area, Communications. I have given this topic the sub-title, "Laser Beam Your Message". Determining your message and then staying "on message" is not easy. Many organizations are involved in so many different projects, each worthier than the last that they have real difficulty in focusing on one simple clear message.

I want to focus, in particular, on four different areas of the auction process where communication is important:

THE FIRST AREA

The first of these is the relatively simple task of defining and releasing the specifics of the auction. The challenge here is that it needs to be accurate and it needs to be in place very early on in the process. Simply by going through the process of listing all the who, what, when, where and whys of the evening, you create a floor plan for the event. I recommend being more specific than you need to be for outside consumption. Rather than simply saying, "we plan to have a live auction", say, "we want to raise $50,000 in thirty lots in a live auction that will last no longer than an hour". By being precise you force yourself to prioritize your goals. Which is more important? To raise $50,000 or, keep the auction down to an hour? Given the anticipated audience, can you expect them to spend an average of $1650 per lot?

What time do you need to wrap it up? Subtract from that the time needed for checkout and for the auction, and you know what time the auction has to start.

How much do you want to make in the silent auction? How many items do you think that requires? That will dictate the number of tables, which in turn suggests the number of closings and that says when you have to begin closing the tables. Remember that moving people from one room to another takes time. A hundred people takes fifteen minutes; over three hundred takes at least half an hour. By going through this process you will develop a clearer picture of the event you want to create including the timing, the ambience, the priorities and the possible pitfalls and rewards.

THE SECOND AREA

The second area where "Laser Beaming the Message" is so important is for the beneficiaries to declare how they intend to use the proceeds of the auction. There are several issues that this raises. The first is to avoid the syllogism trap. This is the logical loop; all charities need money, we are a charity, show me the money. I have found that hospitals are particularly bad in this area. They state their need, and predict dire consequences if they fail to meet the goal. Then, if they do fail, nothing happens and it turns out that the deficit was met by a new grant or another source of revenue. People become cynical.

Also, be true to your mission statement. I have noticed that organizations are sometimes pressured into focusing on a small part of their mission because it is "warm & fuzzy" leaving them open to challenge later on. If you are an arts organization that spends most of your budget on productions, and a few percent on outreach/educational programs, do not imply that the auction proceeds are only going to those programs, it will turn around and bite you later on.

There are real issues around exploitation. The money raised may be "For The Kids", but do you actually show the kids? Is it OK to show them in photos but not on stage? There are pediatric hospitals that bring sick children on stage. It is a very effective way to raise money but I am very nervous about doing this. Is it different if the child has recovered from that illness because of the hospital? What about the parents speaking? How about an at-risk kid who has seen the light because of a social program, should they make their "Come to Jesus" speech. These are valid issues and there is no one right solution, I just want you to be aware of the issues.

I am a great believer in phrasing your message in ways that make sense for bidders. Create a series of bullet points that you can use throughout all your materials. $100 buys this, $500 buys that. Stick these bullet points everywhere.

THE THIRD AREA

The third area where "Laser Beaming the Message" is important is in creating a brand. There are two main reasons for this. The first is defensive. If you create an event and it is a great success, then imitators will spring up. Make sure that you Name, Logo, Brand and then Copyright your event. Otherwise someone may steal it. The current lawsuits over the California Aids Bicycle Rides being an example of what can happen. The second reason is more proactive. The more effective you are in marketing, the greater chance there is for underwriting and donations. A major goal for any event is to move from their donors' philanthropic budget, which tends to be small, to their marketing budget, which is usually much larger. The first step in this move is creating a brand.

THE FOURTH AREA

Finally there is communicating during the auction. This year the Girl Scouts of Santa Clara County, Ca. held their first auction. They did something brilliant. Instead of a silent auction, they took the same time and space and presented a collection of simple but very creative and effective displays showing all the diverse programs supported by the Girl Scouts. I was blown away. I had sort of known that they had moved "Beyond Cookies and Campfires", (the name of the event), but it had not sunk in that they had programs for homeless girls, or that they worked with incarcerated girls. This display was so educational and generated such good will that the live action bidding was extremely lively from the start and offset any small contributions that might of come from a silent auction. Most revealing, when we reached that stage of the evening where I just asked for cash to fund a particular program, the audience pledged $25,000.

Auctions are all about communicating. The challenge at a fundraiser is that there is usually a party going on at the same time. There are times when the noise generated by this party becomes so loud that it is rude and inappropriate. I am not worried about protecting the delicate ego of the auctioneer, rather the whole process of auctioning becomes in jeopardy. I have seen this many times from the stage, as the evening goes on and the level in the wine bottles goes down, the noise in the room increases. It becomes more and more difficult to follow the auction. Eventually only the hard-core supporters are following along. You can see them mouthing, "How much is the Bid?" or, "What lot are we on". Then it becomes too much effort even for them. There is really nothing that an auctioneer can do once this has happened. Screaming into the microphone only makes it worse, but is hard to resist. The natural reaction when someone says that they can't hear you is to speak louder.

There are two things you can do to avoid this situation. Invest in a good sound system and educate the audience as to the importance and urgency of your cause.

As much as the sound system, it is the sound engineer who can make this work. A recurring problem is that you cannot really do a sound check. The human body is very effective at absorbing noise. The sound that was magnificent in an empty hall suddenly does not work at all in a room full of noisy people. Here are some basic guidelines:

You need a lot of speakers. Just having a few powerful speakers means that, for everyone to hear, those near the speakers will be deafened.

The speakers should be on stands and higher than the audience. If they are at ground level then the first few people in the row will absorb most of the sound.

If the room or tent is large, 500 or people, you will need a timer on the sound system. In a large room what happens is that it takes slightly longer for the sound to reach the speakers in the back. The people in the middle of the room hear the sound from speakers in the back and front, and that millisecond difference garbles the sound.

If there is a band, their sound system will not work well for the speaking voice. Most of the time the band uses a "wall of sound" approach.

Most hotel sound systems are inadequate. Usually they rely on small speakers built into the ceiling. If it is an older establishment these may not be very good, and not able to generate much volume before distorting. Try testing them by standing in the center of the room surrounded by several boom boxes blaring at you, each tuned to a different station, then see if you can clearly understand what is being said over the sound system.

The sound engineer has to remain on premises. Sound levels change throughout evening, and they are responsible for walking the room and seeing if any dead spots are developing that require adjustments. Also microphones are delicate. If there is no one there who knows how to fix it or swap it, it will break down.

Discuss all this with the sound rental company. All the hard work you have invested for the last year will be wasted if the audience cannot understand what is being said.

The importance of educating the audience is so that you have the moral stance to tell them to quiet down without offending them. Remember that most of the audience has no intention of buying anything in the live auction. They are there for a pleasant, convivial evening. In other words, to eat, drink and talk. Only the hard-hearted would not rein-it-in, if they thought they might actually be harming people.

Make sure that there is some way that the audience can easily see what auction lot is up for sale. It is wonderful to have a PowerPoint presentation projected on a giant screen, but that is expensive. A simple flip chart will achieve much the same effect.

Make sure that the typeface in the catalogue is easy for a 40+ person to read in a dimly lit room.

Wherever practical, have the auction lot displayed by attractive young people. The more entertaining the evening, the more attention people will pay. Eye candy helps!

The last item I want to discuss is the auctioneer. There is no way I can be impartial about this. I conduct about 50 auctions a year and I think of myself as a performer. As such I work on my craft. I spend an hour a week with a voice and drama coach, I have trained with an improv group and a comedy coach. I am constantly working on routines for different types of auction lots. Obviously I believe that the choice of auctioneer matters.

Many auctions begin by using some member of the organization who, while not an auctioneer, has a good stage presence and knows many of the audience. This frequently works out at first. It becomes more haphazard as the event matures. Hopefully you bring in more lots and the amount per lot also increases. Newcomers replace the "old guard". As the pressure builds the volunteer will make mistakes, will take too long per lot, and the original in-jokes will go right over the head of the new audience members.

Pretty soon in the evolution of an event I strongly recommend that you turn to a professional auctioneer. Select one who specializes in charity events.

There will be more on choosing an auctioneer later, but for the moment I want to concentrate on the communications aspects. First question you need to ask is how much time is an auctioneer prepared to spend with your event. They are going to be your mouthpiece so they need to know your story, and to care about it. This takes time. They also have to learn about the lots. I work with an organization throughout the year on an auction, and it still takes me about 5 minutes a lot going through the catalogue the day of the auction. Names have to be converted to phonetics; details and restriction must be noted. If there is a product or a place I am unfamiliar with, I look them up on the web. Then there are planning sessions, sound checks, light checks, spotter and runner training etc. It all takes time.

Next you have think about the believability of the auctioneer. I have been to auctions where it is immediately obvious that the auctioneer knows nothing about the items. The chances are that at a themed auction, like wine or art, the audience probably knows quite a lot. If they realize that they know more than the auctioneer does, then he or she has given up most of their power to influence bidding.

Finally I want to mention the auctioneer's chant. This is very American, English auctioneers do not chant. I love listening to it. I think that it is an exciting sound, and I DO NOT RECOMMEND using it for fundraisers. I have heard the worlds best and it is a thrilling vocal skill, but it is confusing. Obviously if you live in a farming community you will be used to the sound and be able to follow along, but for urban neophytes, in a noisy busy room, it becomes incomprehensible. One of the big differences between a fundraiser and a commercial auction is the number of bid increments that you go through. At a commercial auction you may take three or four bids, and you train the audience to bid quickly. Most of the people at a commercial auction are in the trade; they know exactly how much they are prepared to pay. You can speed along at three lots a minute. At a fundraiser you take a lot more increments, and frequently have an exhortation pause between them. Every time you double the price it average 10 bid increments. That can be an awful lot of chanting.

I know that this is going to upset many auctioneers, and I am not recommending not using the chant at all, it simply has to be used in a different way.

NEXT POST: We will deal with donor development in other words packaging auction lots. Thanks for your patience...Dave

•

Stephanie

What about creative auction theme ideas? Our small town needs some creative "hooks" to get people in? Any ideas?

•

Billie Rae

There are many ways to develop a theme. The trouble should be narrowing it down!

Ideas for a small town - what is your town's claim to fame? Apples, local fair or festival? Animal or bird? Destination?

Even if your event is months away from the tourist season (or local festival), you can capitalize on that. If your town is a tourist destination utilize local restaurants and bed and breakfasts, guides, tours, museum tickets, etc. These make great gifts to the winning bidder's families coming to visit. You can put together a bonus package for the grand final bid item - lodging, food, tour, airfare...

If you have a bird festival - guided walks make great items for bids, bird themed art, and of course, the decor and programs fall into place with feathers, bird feet tracks, etc. etc. It can be as elegant or corny, as you like. The same goes for agricultural (i.e. peppers, apples, etc.).

I come from a small town that used to be a fishing village - and now touts itself as a eco-tourist destination (fishing, birding, kayaking, the like). The chamber of commerce supports a fishing derby (buy derby tickets and fish) with a prize of $30,000 for the largest halibut. It's taken years from the daily and weekly prizes (all donated) to build the derby to this level, but every year it gets bigger. Just ten years ago, the prize was $10K.

Best of luck,

•

Dave

Sorry I have been out of contact for a few days. This was a tough weekend. I had three auctions, one each in Tulsa, Long Island and California. A little stress, but the events did very well. The Tulsa Auction grossed $1,000,000, which is extraordinary in anyone's book. I was a little beat Sunday night and took off for the last couple of days.

Themes. First thing to realize is that there are no new themes. They have all been done. Therefore there is very little pressure to be original. First decide what type of evening do you want to create. How do you want to dress? Black Tie, Western Formal, Business Attire, Casual or in costume? You can't do a "Back to the Sixties" theme and then expect the audience to appear in black tie.

What type of food can you offer? If your best bet is Pasta then don't offer a "Night in Casablanca".

When is the event? A Saturday Night can be more appropriately formal than any other night of the week.

When you have thought through the feel of the evening then work at creating a theme that will enable you to put it into effect. The trick then is in the naming.

Donor Development

1) Communications
2) Donor Development
3) Bidder Recruitment
4) Event Planning
5) Organization/Volunteers

Today, we move onto the second topic, donor development. More commonly known as "acquisitions" or "solicitation", this is usually the least popular part of the auction process.

The reason that I call it "donor development" is to stress the need to develop the relationships that are the basis for all fundraising activity. A common failing of auction committees, and particularly the chairperson, is to focus on only the year that they are chairing the event. This can lead to a slash and burn approach that is counter-productive in the long run.

One of the primary goals of donor development is to move a company's "donation" from their philanthropic budget to their marketing budget. There will always be some charitable component to these donations, but if you can show that the giver will receive some return on their investment, they will be more willing to donate in the future.

There are four main areas of donor development:

a) Underwriting and/or sponsorship
b) In-kind donations
c) Table Sales
d) Auction Lots

The division among these is somewhat arbitrary, with some donors participating in all four categories.

Usually a charity will set up different levels of underwriting or sponsorship for their event. Basically the components that are available for offer include tickets, signage, mention or advertising in the program and recognition during the evening. It is not unusual for the chair of the event to tell me that I have to mention XYZ Corp seven times from the stage. Some events go further and include invitations to sponsor recognition events.

Why would a company want to sponsor your event? A primary reason is that they want to be seen as a good corporate citizen. That being the case, it is your duty to get them as much exposure as you can. Of course they probably have a more effective Public Relations (P. R.) department than you, or, at the least, a bigger budget. Suggest to a potential sponsor that you are prepared to work with their P. R. department to promote their corporate generosity. This is also helps you to promote your event.

Another reason for corporate sponsorship is to gain access to the potential customers you are inviting to your event. Most of the time I think the charity puts much more value on this than the business. Admittedly, if you are planning a successful auction you will want to fill the room with as many affluent people as possible. And, presumably, attendees care sufficiently for your cause that they will look favorably on any other organization that offers you support. The trick is to enable the sponsor to do their marketing without handing over your mailing list. One effective method is to offer to send out a mailing for the sponsor, after the auction, with a cover letter explaining how useful the sponsor was in helping to make the event such a success.

The most common method of approaching the sponsors is to list the series of benefits they will receive at different levels. I would suggest that this is not an efficient method. For example, at a certain level you might include ten tickets to the event, some signage, and a full-page ad in the catalogue. Everyone who signs on at that level gets the same thing. In reality each business may have different needs. Why not offer a "menu" of options, each of which is priced at a certain level and then the sponsor receives "credit" to spend as they wish. There is a cost associated with every benefit, even signage. If you hang too many corporate logos, the whole ambience of the room will be diminished.

Be creative. Try to find a unique way for a business to support your event. One example that I like is to ask a bank to issue "checks". These can be for any amount, and are only available to spend on live auction lots. Each bidder can only use one check. Most commonly the bank underwrites checks for $100. What this does for the auction is to give everyone a reason to bid. Everyone in the audience has $100, which becomes valueless as soon as the auction ends. I have found that people rarely cash them in. You get the sponsorship dollars from the bank up-front. Everyone wins.

IN-KIND DONATIONS

Most businesses would prefer to make an in-kind donation, rather than cash. The first area I suggest that you go after is any media group with which you have contact. Media space is expensive for everyone, except the media. If you can get any access to free media it is very easy to leverage it into other donations.

One common practice is to list all the goods and services that are going to be needed for the auction and then try to get as much as possible donated. Though this seems like a good idea in principal, remember that there is a hidden cost. Whenever people donate, you lose control. If a printer donates their services, even if they receive sponsor recognition, your job will have a lower priority than the paying customers. I have seen loaned computers arrive without the necessary network cards and no technician, caterers appear with only half the required number of wait staff, and sound systems that were comparable to two cans joined by string.

TABLE SALES

I define table sales as the practice of selling a table at more than the cumulative ticket price. If normal ticket prices are $100 a head, the goal for a "table sale" might be $2500 for a table of 10.

One school auction I worked was unique in the number of corporate tables they were able to sell. Normally schools find it next to impossible to get outsiders to attend, but in this instance they encouraged a very powerful parent body and alumni to go out and sell corporate tables. Though this raised a lot of money, it had a downside. The senior partner often purchases these tables, but the tickets are turned over to the junior associates, who have been assured that this event is a great party. When the principal got up to speak, there was not a break in the noise level in the room. It was like conducting an auction on the floor of the Mercantile Exchange.

One way they could have slightly alleviated this problem was in table placement. Frequently the corporate tables are placed around the stage under the grounds that they have paid more and therefore they should be placed in the prime spot. They should be spread throughout the room, with the only ones near the stage going to those tables that might participate in the auction.

AUCTION LOTS

The perfect auction lot costs virtually nothing, is unique (and therefore priceless), has pizzazz, and promotes the vision of the charity. For example the New Mexico Symphony sells the chance to conduct the orchestra in Stars and Stripes at their July 4th concert. The San Jose Rep offers a chance for a walk on role in an upcoming production. A school offers a quilt made by the first grade.

Most events that host a live auction also conduct a silent auction. Silent auctions are a reasonably simple numbers game. The return on the silent auction is a function of the total value of the items offered, the number of items offered and the number of people attending. About half the couples at an event will bid on items in the silent, but those that buy items will often buy more than one.

At several events we have recommended that they reduce the number of silent auction lots. At one event in particular we cut the number of silent lots by half, while reducing the total value by only 25% and the return actually increased.

Another event has made approximately $50,000 every year on their silent auction regardless of how much they offer. As far as we can tell, the average return on silent auctions is about 60% of the stated value.

One recommendation we make is to see if your organization can create a niche market in the silent auction. One school in San Francisco has a large number of artists in their parent body and they have this tradition of prevailing on the artist to paint furniture. Some of the pieces have been really spectacular, and people unrelated to the school attend simply to buy these items.

We also suggest that it is well worth filling in the bid amounts on the silent auction sheets in advance. At the very least keep the bid increments mathematically simple. I was once an item with an opening bid of $85 with minimum increments of $17. Not surprisingly, no one bid.

Another suggestion is that you include a guaranteed or "walk away" bid. This is a line at the bottom of the bid sheet where people can sign for a certain amount and then no one can overbid. An example where this works very well is in restaurant gift certificates. If a restaurant donated a $100 certificate it will probably sell for that amount. On the other hand if it is a restaurant I like and I can just sign up at $125 or $150 I probably will.

Silent auction lots should be kept simple. People are not going to absorb complicated descriptions as they walk around the room.

The live auction, on the other hand, is the place to get very creative. It has a much greater chance of producing a dramatic return on an item, but to do this the item must have a component that is priceless or, more accurately, unpriceable. This usually entails access to a person or place that is only obtainable through the good offices of the charity.

The best source of good ideas for auction lots is to review the previous catalogue. Drop those that did not work well, and try to repeat the ones that did. You do not want completely new items every year. Your audience appreciates a certain amount of consistency. You might need 25 to 50% new items each year.

The process continues with making two lists. The first is a wish list of all the items that you would like for an auction. The best items are consumables, dinners, trips, wines etc. If someone overpays for these the memory fades once they are consumed. Real stuff remains as reminder of ones folly. Obviously accept anything that will sell. You can always find a way to package it that will make it unique.

The second list is an inventory of the contacts you and your board can use. Does anyone have a time-share or vacation home? Does anyone have contact with a celebrity? Who has contacts in the food, wine or travel industries? Has anyone in town built a new house that has created a buzz? Is anyone taking a vacation this year?

Hopefully between these two lists, you will become aware of which items are worth your concentrated effort. Your wish list might include a trip to San Francisco, but, if, after looking at the inventory list you see that you have contacts there but you do have a couple of good connections in Seattle then drop SF work on Seattle.

Once you have your list of prospective auction lots start padding them out. If one of your wishes is a trip to San Francisco, then see what that could include:

1) Airfare
2) Accommodation
3) Dinner
4) Tickets to Pac Bell Park.
5) Walking Tours.
6) Wine Country Tours.

Assign each component to the appropriate person with a recommended completion date.

After a few weeks, revisit the wish list and assign a probability of completion number to each item. Refocus your efforts on those with higher scores. A few weeks before deadline setup a phone bank so that you can work as a group, closing all those that are teetering.

There are two ways to put together good lots. One way is to rely on a single, large donation, another is to have a group each contribute a small component. You just have to direct them. For example get twelve people to contribute a bottle of wine each and you have a case. Even better suggest that they all donate a 1997 Cabernet Sauvignon, and then you have a really great case worth more than the sum of its parts. Arrange for three couples to host a progressive dinner, or a group to supply dessert for a year. Another popular item is for a small group to offer themselves as the "Odd odd-job gang".

While I recommend keeping a small fund in order to buy items that round out auction lots, my rule of thumb is to only spend money where you can at least double or triple it in the auction. This rules out selling automobiles "donated" at cost by a local dealer. Though the sale of the car will inflate the numbers at the auction, it will return very little to the bottom line. If someone offered to underwrite auction lots to the amount of the automobile, would you use that money to buy the car? I doubt it.

Be careful of travel lots that have too many components in them. If you are not careful you can end up playing travel agent for the rest of the year.

While donations of art and jewelry are appreciated, please check on their real value before putting them in the catalogue. Very importantly be open with the auctioneer. If there are any reserve prices or "political" components to the lot please let them know.

Most importantly keep thinking about how to include a unique item in each lot. It is that priceless component that allows the auctioneer to ask for any amount of money with a straight face.

I hope this gives you some ideas about donor development. Fortunately I am not working this weekend and so should be able to write up the next area, bidder recruitment, by Monday. Any comments will be appreciated.

•

Diane

I have some pretty basic questions:

1. If there is a minimum bid specified on an item - what happens if nobody opens at that bid? Does the auctioneer put it aside or does he go lower? For example, if an item is taken on consignment, you cannot go lower than minimum bid or the organization would have to pay for the difference.

2. If the item is bought by the organization at wholesale price to realize a profit - I assume that you must stick to a minimum bid. Again for the same reasons.

The organization I will be helping with an auction is reluctant to consider anything else than donated goods because the auctioneer will go lower if he doesn't get his opening bid and I would like to convince to try some other ways to get more interesting auction lots.

•

Judith

Dave said, "Obviously accept anything that will sell. You can always find a way to package it that will make it unique."

And herein lies our problem. We have an annual wine auction for which we have a Wine Acquisitions Chairperson and a Non-Wine Acquisitions Chairperson. Our Non-Wine Chair is a most persuasive woman with a very generous heart and occasionally questionable judgement. She gets things that we have a hard time including outright (a pet funeral for example) and some that are hard to put in a package lot.

That said, I have found that I can use some things for our ongoing "eBay Initiative", but some items/experiences that are firmly local are just hard to sell. And we have found that putting together a bunch of things in a package brings less than the items might singly. But of course if we did them singly, the silent auction part of the evening would be out of control. (We have cut back on our items as you suggest and did do far better.) Packages generally don't do well with our auction attendees.

So I guess the challenge is three-fold.

1- What can you do with a bunch of things that just don't seem to fit - either your auction theme or in any particular lot?

2- If we try to steer that committee toward specific items, are we leaving gifts on the table, so to speak, and not fully utilizing the committee's contacts?

3- Is there a way to make the package lots more attractive to our attendees? Mixed wine lots we have no problem with. Mixed lots with items, services, or experiences just don't go over too well.

•

Dave

A Pet Funeral. Boy that's a challenge. I have had to sell some weird lots in my time, but that one wins. Why would anyone go after a pet funeral for a wine auction? You can't even use humor because you will upset half the people in the room. OK you've got me. I retract my statement. You cannot package everything.

She continues:

"So I guess the challenge is three-fold.

1- What can you do with a bunch of things that just don't seem to fit - either your auction theme or in any particular lot?"

You can always have one lot that is a real stretch. I call it the "AM lot". It's what we say happens at AM when the catalogue writer has to have the completed text in first thing the next morning. You make fun of the combo...Just no pet funerals...unless it includes a copy of a Stephen King novel.

"2- If we try to steer that committee toward specific items, are we leaving gifts on the table, so to speak, and not fully utilizing the committee's contacts?"

This is a balancing act. That is why it is so important to go through the process with the committee. Every request needs to be planned. Tasks must be assigned and approved. If the committee member has a contact then you need to know about it first.

"3- Is there a way to make the package lots more attractive to our attendees? Mixed wine lots we have no problem with. Mixed lots with items, services, or experiences just don't go over too well."

It is hard to do this without seeing the particular list of items. I spend a lot of time with clients working on just this sort of thing. Sometimes there is not much you can do with the item itself, but you can juxtaposition it in the catalogue to generate some action.

•

Margo

Pet Funerals....etc

We have all come across that type of wonderful volunteer... one solution is to share with her a total listing of the donations she generated along with the value & selling price of same - in most cases the donations that are "on target" with your theme will bring in more money. Seeing it in print usually makes that clear & it is easier to talk about what is on the paper rather than your verbal opinions! Additionally volunteer is pleased that you took the time and thought her donations were worthy of this specialized approach. Usually do this privately, not in an open meeting.

If need be, her donations can be compared (again on paper) with other donations. This way, she can see that other types of donations bring in more money and since she is such a great solicitor if she went after that type of item it would really help, maximize her efforts, etc.

Third, give her a list of what you want - taking into consideration her contacts etc.

Now back to that Pet Funeral...

- should it be a live auction item - probably not - should it be a silent auction item - maybe - could it go online - definitely!- could it be packaged with champagne in a celebration of life package -definitely - could also be a sealed bid - which we often do with plastic surgery & other types of medical service donations where discretion is the better part of valor.

Somebody out there loves her/his pet and would be willing to pay for this!

Bidder Recruitment

In the last class I talked about donor development. We now move on to the equally important topic of bidder recruitment. Obviously a major part of a development director's job is identifying and cultivating possible donors. An auction adds a small twist to the normal prospect cultivation process. On one hand, the time of "the ask" is already pre-ordained, but there is the added advantage of the auction process.

For some reason fifteen seems to be the magic number. The top fifteen bidders make most auctions. There tends to be a pyramid distribution, the top bidder spending between 10 and 15% of the total. The next two bidders spend the same, the next four the same, the next eight the same. The distribution between the bidders may vary, but the norm in most auctions is for the top few bidders to spend between 50 and 75% of the total of the live auction.

We can continue to extrapolate from these numbers. The difficulty with the 15 is that you never know how they are going to respond on any given evening and so you need 30 people who can spend that amount of money. Add to that the fact that life is busy, people travel, there are other events and family obligations etc. You need to have a hundred possible big bidders on file to end-up with your fifteen.

There are two stages to bidder recruitment, part one is identifying potential bidders and we all know the work we have to go through with list management in order to collect those names. The second stage is bidder education. You need to convince your potential bidders of the importance of your programs. Also you must let them know what is expected. It doesn't matter how much money someone has. If you go to an event expecting to spend $1,000, you are not going to spend $25,000 regardless of how nice the evening is. It is too big a change in mind-set.

Focused auctions can help the process. A wine, art, glass, travel, gourmet, or whatever auction can not only bring people who are interested in those items, but once there they often have a vested interest in supporting the people in those professions. One common occurrence is for items to sell for much more if the producer, whether vintner or artist is there in the audience. Once, about three years ago at the Napa Valley wine auction, there were two lots of wine from the same winery. The winery lot was all right, but a private collector donated by far the better of the two, yet, when it came to the bidding, the lot donated by the winery sold much more. The buyers were not just buying wine; part of what they are doing is creating or reinforcing a relationship with the vintner.

Lastly I want to stress the importance of the board in this process. If an auction is only aimed at your current constituency, I am not sure that it is worth all the effort. It seems to me that a major reason for hosting this event is to attract new people to your cause. One of the challenges for the most dedicated board members is how they can involve their friends in the charity. Special events are a way that board members can encourage others to become involved. They cannot expect the development staff to do this for them.

The next two sections, event planning and volunteers/organization, I will take up in the next class. Thanks to all who have sent in messages of support.

Event Planning - Volunteers & Organization

We come to our final sections; event planning; volunteers and organization. These are interrelated. A committed, well-trained group of volunteers is what makes charity events possible.

EVENT PLANNING

Timing is critical. Decide what time you want your event to end, and then work backward. For example if you think that the last participant should have checked out and left by 10:30 PM, then the following calculation applies.

Checkout will take 3 minutes a buyer divided by the number of checkout lines. Though this is an average for events, and some organizations are more or less efficient than others, it gives some sort of perspective. If you have fifty buyers between the silent and live auction and three checkout stations with at least two warehousing teams, then you can expect the checkout to take forty-five minutes to an hour.

This means that the live auction has to end at 9:30. For me, live auction lots average two minutes each. This means that a thirty-lot auction takes an hour. I usually recommend having between 20 and 45 lots. Therefore, depending on the number of items, the live auction needs to start between 8 PM and 8:45.

From this you can backtrack dinner, the time it takes to get an audience seated (about 15 minutes for every multiple of 200), the closing of the silent auction lots (10 minutes between tables), cocktails and socializing and the check-in. This gives you the starting time of the event. In addition it becomes clear whether you need to conduct the auction during dinner or not.

I really do believe in sticking pretty closely to a timeline. Often, if the silent auction is meant to close before dinner, the event chair panics because bidding is light. I understand their dilemma. An enormous amount of work went into the silent auction. It takes as long to solicit, warehouse, catalogue, ship, display and checkout a silent auction item, as it does for the live. The temptation to delay dinner to prolong bidding on the silent auction is almost irresistible. Resist it. Bidding at the silent auction always takes place in the last few minutes. Be brave.

Making changes at the beginning of the evening is like that example of chaos theory. A butterfly flaps it's wings in Tiananmen Square and before you know it there is a hurricane off the Bahamas.

If the evening starts to go late you will lose bidders in the live auction. It's not just that they will leave before the auction ends, (and they will), they will not bid for anything as they will be worried about not being able to check-out until it is all over.

Talking about checkout, more relationships are strained between organizations and their supporters at this point than any other time during the event. No one should have to wait to checkout for more than fifteen minutes!! Make this an absolute rule. Do whatever it takes to make this happen:

1) Institute VIP checkout. In other words get their credit card numbers up front.
2) If you know them, let them leave and settle up in the morning.
3) If the items are bulky, deliver them the next day.
4) Ask the local Mail Boxes, etc to provide a shipping service.
5) Settle up during the auction.
6) If the prize is just a certificate---mail it to them.
7) Install more computers and test them on site.
8) Have them stay at their tables, serve coffee & Cookies, and bring the checkout materials to them
9) THE AUCTION DIRECTOR MUST BE THERE TO SMOOTH OVER ANY PROBLEMS.

The last thing I want to highlight in the event planning are the three E's:

Empower, Engage and Entertain

These are the three essential elements to fulfilling the promise of an auction. Before the doors open the auction is at its peak potential. Your guest list is set. The lots are whatever they are, and you have made your message as clean and clear as you can. Like Sisyphus you have pushed the boulder to the lip of the hill time and time again. Now it is balanced precariously at the top. As soon as the guests arrive, over it goes and suddenly you have much less control.

Almost by definition the fifteen people that you are relying on to make the auction a success all have large egos. If you do anything to upset them, they have an easy way to get back at you, they simply do not bid. At check in we recommend a "Solutions" table. If someone asks for a vegetarian meal it is no problem. Make everyone feel appreciated and powerful. If they feel this way they will bid accordingly, to your direct benefit.

Keep them engaged in what you are doing. Auctions are strange events. Sometimes I perform in front of audiences who believe that they have permission not only to ignore the auction, but also to make sufficient noise so as to drown it out. It is one thing if I am doing a bad job, and after a time the audience tunes me out, but I am talking about audiences who never give the auction a chance. There are a few things that you can do to alleviate this situation. Before the auction starts, someone has to get up and silence the audience, tell them how important the auction is, how the money raised is going to improve the world, and let them know what behavior is acceptable.

Do everything possible to make everyone feel that they are on a team. "WE are going to do great things tonight." Make sure that all volunteers applaud and cheer the winning bidders. It is O.K. to get in the audience's face. Interrupt them, get their attention! Politeness is all well and good, but you have somewhere between an hour and ninety minutes to make the money you need. All the work of the last year comes down to this time. A loud disconnected audience is being disrespectful to that effort.

If you insist that the audience pay attention, then it is essential that you entertain them. That's the implied contract. If you do not live up to it, then they have the right to disconnect. An auction is sub-set of theatre and many of the same rules apply.

1) You have to be really good if you plan to exceed ninety minutes.
2) The performance needs to be scripted. Robin Williams is the only performer who can work an audience for two hours without a script.
3) It cannot be monotone; you need emotional peaks and valleys.
4) The auction must be inclusive, everyone has to be able to see and hear, and uniquely to auctions, the auctioneer has to be able to see everyone. Every bid in the room must be recognized, even if it is by the spotter for an instant.
5) Audiences tend to live up to expectations, and they expect you to do the same.

We live in a world where the competition in entertainment is extraordinary and by putting on the auction you have entered this arena. I believe that most people prefer live entertainment to the canned product that appears on TV, and they will cut you a lot of slack because they want you to succeed. You just have to commit to the process. It's scary, and as auctioneer, I can assure that it is really painful if it flops. On the other hand the flops are few, and the successes many. The rewards can be extraordinary.

VOLUNTEERS

The final area I want to discuss is the volunteers. The night of the auction you may be the biggest business in town, and you are going to be relying on volunteers. If they are not well trained they cannot be expected to do a good job. Training takes time. Even when trained, some will do a better job than others, and you need to carry out volunteer reviews at the end of each auction.

Frequently the spotters or ring-persons for an auction are volunteers, and I usually ask for twice as many as I really need, because half will not do a good job. I don't blame them. It's hard and responsible, and in the public eye. They get embarrassed or confused. Though I train them, they cannot really know what it will be like until they actually do it.

The mantra of all fundraising is that people give to people not causes. The volunteers are the most visible group representing the charity. If they are informed, enthusiastic, caring advocates for the event, the rest of the audience will respond accordingly. If not, they can cost you a lot.

THANK YOU

This is the last of these epistles that I am sending out. I am happy to try and answer any of your questions in the next couple of days, but Sunday evening I am off to France for 10 days.

I hope this has been of some use to some of you. I realize that the vast majority of charities throughout the country have no need for auctions, and, considering the amount of work involved, I think that's a good thing. On the other hand, this has been my life for the last several years and we have been able to achieve some really miraculous results.

If you are involved in an auction, I suggest you register at our website http://www.reynolds-buckley.com. We hold a regular drawing for the newly registered with the winner receiving a getaway in San Francisco to put into their auction.

I thank you all for your participation...Dave Reynolds