A new frontier in fund raising
Online auctions can extend
your donor base and more
In the never-ending search for new fundraising
avenues and tools, many not-forprofits are finding that online auctions
allow them to expand both their reach and their revenues.
The benefits
Online auctions enable organizations to broaden
the universe of potential bidders beyond those who are able to
attend live events. This tends to drive up bid prices on items
and increase exposure for sponsors.
Not-for-profits that have
a geographically dispersed donor base are especially good candidates
for online auctions. One charity that has a successful track
record of hosting online auctions is St. Jude Children's Research
Hospital in Memphis, Tenn. The organization, which has hosted
online auctions for about four years, draws support from across
the country.
Hand-in-hand with live auctions
Not-for-profits
that have taken auctions online typically use one of two
approaches. The first involves substituting an online auction
for a live event. Organizations say that virtual auctions enable
them to significantly reduce the time and costs involved in planning
a traditional auction.
Another approach is to use a cyberauction
as a precursor to a live one. The online portion allows supporters
to place early bids, which are then used to establish the opening
price for live bidding. Online participants can also place
advance maximum bids that are conveyed by proxy during the live
auction.
The auction platform
Many not-for-profits that have
run online auctions have used cMarket (www.cmarket.com), which
offers an Internet-based auction platform for charitable fund
raising.
Here's how it works: Your organization creates a
home page for an auction that features your full catalog. You link
to the auction site from your regular home page. Integrated into
the auction page is the capability to e-mail your entire database,
provide links to sponsoring companies and process payments.
In
lieu of upfront fees, cMarket charges a percentage of the auction
proceeds. The amount is based on a sliding scale, capped at
9%.
According to cMarket, customers have been able
to lower their costs and raise more money by taking auctions
at least partially online. Some not-for-profits that have used
online auctions as a lead-in to a live event report having
raised 50% to 75% of their fund-raising goals before the live
auctions started.
Still another way for your organization to
raise funds is to sell items directly on eBay. The company
collaborates with MissionFish, a nonprofit organization,
to offer eBay Giving Works. The program, designed specifically
for not-for-profits, allows you to raise funds in two ways:
1. Direct selling. The charity lists items
for sale, collects the proceeds from buyers and provides
a tax receipt; and
2. Community selling. Anyone can sell
items on eBay and donate all or part of final sale prices
to not-forprofits. MissionFish collects the donations
and distributes them to nonprofits, and issues tax receipts
for the organizations.
In addition, MissionFish supports
not-for-profits by hosting the listing tool for charity
items on eBay and offering free marketing tools that
allow nonprofits to promote their eBay activities.
The perfect audience
As not-for-profits seek to expand
their geographic reach and increase the number
of contributors, they're finding that cyberspace
offers the perfect audience: one that is ever-present,
virtually limitless and at ease with online transactions.
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