Fundraisers too often set ticket prices as low as possible, so more people can attend. This practice ignores the generous few who could and would give more if you made it appealing.

Auctions are an easy way for people to give exactly as much or as little as they want.

Auctions work well because:

• People give to their own limits.
• People get something in return.
• People have fun memories.

Professional auctioneer Joe Small expands this list. He's raised over $20 million in 1300 charity auctions since 1975, in the US and Canada. Here's his list as it appeared in Fundraising Management magazine:

Advantages of an Auction

1. Attract new money from new sources.., in substantial amounts, usual]y earmarked for a special project.
2. A “media event' often results in excellent newspaper and television exposure.
3. A fun-filled, enjoyable evening for all.
4. Image enhancement for the sponsoring group.
5. Find new donors.
6. Find new volunteers
7. Build enthusiasm toward an annual auction.
8. Discover an efficient method of channelling the energies of those many persons who wish to help you but don't know how.
9. All money paid up front, not in delayed payment pledges that often shrink or prove difficult to collect.
10. Your group has increased its annual income substantially and broadened its donor base.

Reprinted from Fundraising Management magazine, March 1988

What should you auction off?

The best items have emotional and psychological value, not market value. That's because there is no obvious pre-set upper limit.

On items that have a market value, like a video recorder, bidding usually stops just below the normal retail value. With items that fulfil fantasies a market price is not clearly established, so bids run much higher.

One example which several charities have found successful: used ballet slippers from a dancer such as Karen Kain. Used dance shoes frequently sell for hundreds of dollars, and have gone as high as $1,000. The National Ballet Company does give them to worthy causes, especially national charities, depending on the supply. Other dance companies may do likewise. If you'd like a pair, make a request in writing to:

The Publicity Department
National Ballet of Canada
157 King Street East
Toronto, Ontario
M5C 1G9

Autographed hockey sticks, baseballs and other sports items can round Out your collection for auction. In one small community, a fan bid $1600 for Wayne Gretzky's hockey sweater, donated by the Edmonton Oilers before the trade. The purchaser then donated it back to the charity, and it was auctioned a second time the same evening. This time it raised $2,000 more.

Like most hockey clubs, The Edmonton Oilers will give non-profit groups a souvenir stick. They give out about 12 a month. These can be autographed by the entire team, or just the player of your choice. They also give Oilers hats and photos. Sweaters are given on very rare occasions, when approved by the player, or team owner Peter Pocklington. Sports teams of all kinds have similar policies. If you'd like to request a souvenir item, write with as much information as possible about your group to:

Community Relations
Edmonton Oilers Hockey Club
Northlands Coliseum
Edmonton, Alberta
T5B 4M9

Consider asking a company that owns a hot air balloon to take people for rides. Increasingly popular as advertising items, custom balloons and blimps are owned by real estate brokers, breweries, tire companies, and pizza chains.

Media stars and politicians have donated ties or other memorabilia. Musicians, like the popular singing group The Nylons, have provided the customized jackets worn on their tours, albums and free sets of tickets. Radio stations have allowed the top bidder to co-host a show and sit in for the day behind the scenes. Sports reporters can take people to watch a game from the press box and meet the players in the dressing room. Driving the bulldozer or swinging the wrecking ball to demolish a building are two other popular auction items.

The list is limited only by your imagination.

Even without major contacts, anyone can find valuable services. A local amateur cook can prepare a fine dinner. Teenagers can mow the donor's lawn all summer.

Celebrity and fantasy items alone do not provide something for everyone. A good mix is essential. Here are some other items recommended by auctioneer Joe Small, depending on your audience:

All items should, with rare exceptions, be either brand-new or genuine antiques. Examples of popular items include air fare to anywhere, a garden tractor, use of a billboard for a month, matched luggage, season tickets, landscaping service, a gourmet dinner for 12, brass or bronze items, paintings, cameras, home entertainment centres, new or antique furniture, stained glass windows, condos in Vail or Acapulco, a fishing boat, a Jeep, a diamond ring, a bicycle built for two, an expensive watch, a fur coat.

The choice should be so wide that everyone will get excited about something, even if they didn't plan to buy in the first place.

Enhance the value of commercially available items by arranging novel combinations. For example, a video player may include a movie every week for a year from a local rental store. Or offer a custom home movie or rock video by a professional producer. An airline trip can include hotel accommodation in a hotel, and spending money donated by a travellers' cheque company.

Where do you get items to auction off?

Prizes should almost always be donated. The exception is when it takes more time than it would to buy the item.

Many businesses are delighted to donate items if they believe they will receive exposure to potential customers. One group in Hamilton, Ontario, recently got an outraged call from a jeweller. He was angry that the charity was auctioning off a ring donated by a competitor, and hadn't asked him! He demanded the right to donate one of his custom-made $2000 diamond-and-gold rings. The charity graciously accepted.

“Goods and services are vastly easier to obtain than money,” Joe Small notes. Instead of financial contributions, a charity may find it easier to get something they can convert to cash at an auction.

What's the difference between a live and a silent auction?

There are two major types of auctions.

The live auctioneer is perfect for a small number of items that are:

• more expensive - $350 and up
• easy to understand
• popular with almost everyone.

A live auctioneer gets everyone's attention, and can increase the bids. On the other hand, it is hard to listen to a live auction for a long time. It can also leave out some people who can only bid on low-cost items.

The live auctioneer sometimes varies the pace. Some of the techniques include:

Lightning Rounds - Very short time allowed. Builds energy.

First Come/First Served - Give items for absurdly low prices to the first person brave enough to bid. Gets the bidding going.

Top Up - Each bidder actually adds the difference between his/her bid and the previous bid to the pot. Amounts are smaller, but can add up. At the end, the bidding becomes rapid as people realize they could get the item for just a dollar or two. Telling people there is a time-limit increases participation. Don't reveal what the limit is.

Tombola - The winner gets to chose from mystery boxes, without knowing what the contents will be. It works best if some contain fabulously expensive items and others funny consolation prizes.

There are other variations. Haimish Robertson, of the Juvenile Diabetes Foundation (JDF) of Ontario describes their Tombola as “a glorified fish pond.” People pay for a chance to reach into a drum and pull out a slip of paper. Some win nothing, and the slip says “Sorry! Thanks for donating to JDF.” Others win small prizes. These are often the items too small to auction, such as a cup and saucer. JDF recommends charging from $2 to $5 for each chance, depending on the size of the community and other factors. Tombola works very well in combination with a Monte Carlo, where players buy chances with their chips, instead of cashing them in.

The silent auction is for a large number of items that are:

• less expensive - $50 to $250 retail
• require thought
• of special interest, such as insulating your home, having a lawyer prepare your will, or free orthodontic work.

Silent auctions provide less distraction from the other fun, such as dinner and chatting with friends. As a result they help round out the evening. On the other hand, they are easier to ignore and take longer.

To conduct a silent auction, display the item to be auctioned off. Attach a sheet of paper for the bids, or mount a cardboard bid register nearby. Bidders write in the amount they will pay and sign their name, or secret code number. Each higher bidder supersedes the previous bid. People may bid as often as they wish.

Time limits on some of the items will keep the pace brisk. These are usually secret, so no one knows when bidding will close on the item they want.

How many items can you auction?

The live auction should last no more than one hour to an hour and a half. In that time you can auction from 35 to 45 items. Allow about 90 seconds per item, with some time in between.

The silent auction can include 250 to 350 items.

TV and radio auctions can last several days. Some groups auction up to 3,000 items that way.

How many people should you have at an auction?

Auctions come in all sizes, depending on the ability of the non-profit group to draw a crowd. Joe Small reports that they normally range from 200 to 650 people. However he has seen them run effectively as small as 75 people, and as large as 1,650.

What else should happen at an auction?

Too many distractions can reduce the income at an auction. Don't combine it with a casino, a major speech or a star studded concert. Keep people focussed on the auction.

Joe Small recommends the ideal combination to be an auction with a fundraising dinner. There should only be one speech, he suggests. It should be about 7 minutes long, by a well known and beloved figure. The speech says little more than "Thank you for coming. Here's an exciting project that the money raised will fund. Let's get started."

As the auction begins, a one-minute mock auction may educate the crowd on how to bid. During the auction, the auctioneer may vary the pace with a joke or a story. Beware the auctioneer who tells a tale that is off-colour, or not funny. They auction itself is the entertainment, and it had better be good.

Should you charge admission?

There should be an admission charge that covers the costs of the event itself.

This charge should reflect the cost of renting the hall, sending invitations, providing food and general administration costs.

Don't undercharge. One group insisted that the fee be $35, not $50, for fear that some supporters would not attend at the higher price. However, supporters that could not afford the extra $15 admission would not have purchased much at the auction either.

Don't skimp. "Remember that saving pennies here may cost you dollars later," Joe Small says. “For example, a dinner/auction in a highly respected hotel ballroom would be a comfortable setting for a higher income group. Other halls cost less, but not as many from this socioeconomic strata will come to a vacant warehouse, and if they do, their bids will be lower.”

On the other hand, don't charge extra for the auction programme, the bidding paddle, or other essential ingredients. Other than a cash bar, if you serve alcohol, the admission fee should cover all expenses. Let them spend their money on the auction itself.

Who should be the auctioneer?

A good auctioneer is essential.

Someone who knows what s/he's doing can get the prices higher, or read the crowds for signs of fatigue. They can pace the expensive items with the low-cost fun ones.

Involve the auctioneer as early as possible. He or she may have valuable advice on how to organize the event for maximum results.

A professional auctioneer may be willing to volunteer time. Joe Small cautions that some otherwise competent professionals don't have experience in the fundraising setting. They may not be patient with people who have never been to an auction before, and don't understand the system. Or they may show off their high speed auctioneer's patter, which is too hard for a non-auction going crowd to understand. As a result people may not bid, for fear of embarrassment.

Local celebrities are sometimes good, if they make a living by talking, such as a radio or TV announcer, or a politician. If you go this route, it's a good idea to have two celebs. They can pace each other through the hour. And, if one cancels at the last minute, another is already in place.

Joe Small is one of a handful of professionals who specialize in charity auctions. They can not only run the auction itself, but advise on how to do it well.

Small charges $1450 US plus expenses, to provide an auctioneer only. He also offers a full-service package. This includes the auctioneer, a clerk and 2 experienced ring men to spot the bids. That's more complex than it sounds. In addition, you get an orientation meeting several weeks in advance, to set up the system, and unlimited consultations by phone throughout the process. All the special forms necessary, bidding paddles and other equipment are included too. This package costs up to $4500 US plus expenses, depending on the size of the auction.

A good auctioneer can increase the income substantially, compared to a do-it- yourself arrangement. Small estimates the difference runs from 30% extra income to double the money.

When should you hold an auction?

Hold an auction almost anytime in the normal “social season” from September to May.

Avoid the summer months, when people are often away. Avoid the height of the Christmas season, from early December -to mid-January.

October through early December can be good timing. Many people will see your auction as an opportunity to buy unusual presents.

What is tax-deductible at auctions?

See Chapter 17, What's deductible? Revenue Canada Regulations and Other Legal Matters.

What are the problems with auctions?

For all their advantages, auctions can cause problems. Here are a few to be wary of:

Art auctions

Avoid art auctions in most cases. Unless the art is very good, bids may be low. Low prices can embarrass everyone involved.

One group of artists in Vancouver put on an auction of their own works, in a gallery that had donated space. Few people but the artists themselves and their relatives came. They sold very little.

If you have an art auction, have a jury of respected critics and curators choose acceptable submissions. Prepare for the difficult task of turning down some items.

Several groups have had auctions of "The World's Worst Art." They purchased items at garage sales and flea markets that are amusing in their awfulness. It takes a special group to carry this off, and to get the audience to buy the stuff!

Professional art auction companies will run the entire show for some groups. They are expensive, however. Since they provide the art, the advertising materials and the staff, the costs are high. While this may not be unreasonable, it leaves little for the charity after expenses. Other types of auctions may be more profitable.

Don't hesitate to auction off a few works by respected artists, however. Canadian wildlife artist Robert Bateman has a well deserved reputation for generosity in donating his prints. A group in the Northwest Territories auctioned one of his prints for over $1300. Many others have done likewise.

Restrictions on use of an item

Some auction items carry restrictive conditions. Be sure buyers are aware of this before they make the purchase.

For example, airlines and hotels may restrict use to low seasons. People providing services may be willing to comply only when they aren't busy. Someone may have to pick up a heavy item at the factory, or pay extra for delivery.

One person was angry to discover that a hot air balloon ride she had purchased at an auction was for one person only. If she wanted to take her husband, she'd have to pay $135 extra. This was bad publicity for the charity.

At the same time, it is to your advantage to try to ensure that buyers take advantage of services they purchase. An individual who offers to prepare a gourmet dinner may be upset if the buyer never collects. If the item or service is not used within a reasonable time, the donor may not be willing to donate again.

Bachelor auctions

See “What a bad idea for an event”.

Failure to plan

Auctions require a great deal of advance preparation. Joe Small estimates that the auction is 80% over before the first bid is placed.

Allow enough time. Set up committees with care. Enlist volunteers early. Get advice from professionals at the beginning, and follow it. Joe Small puts it this way:

Committee heads - the top 12 - should be chosen for their leadership qualities, not because they volunteer... Pair these with 70 to 75 enthusiastic volunteers who will form the committees that will make the event a success... Even though the bulk of the work will be done by 25 to 30 people. In addition to a chairperson, committees are needed to:

• obtain merchandise for the auction
• run the auction
• promote the auction
• put times on display
• be sure the people who bought the items actually leave with them
• distribute an advance list of items to be sold
• sell tickets
• register bidders and pass Out information
• collect the funds at the end of the evening
• thank those who donated items and those who placed large bids
• plan door prizes
• establish a theme, handle the decorations, and more.

Where can I get more help on auctions?

The Auction Book    U$26
by Betsy Beatty and Libby Kirkpatrick
The Society for Non-Profit Organizations
Suite 1
6314 Odana Road
Madison, Wisconsin 53719
USA

The Auction Encyclopedia
Missouri Auction School
1600 Genessee
Kansas City, Missouri 64102
USA
(816) 421-7117

Joe Small wrote a chapter for this encyclopaedia on how to set up charity auctions. It is written for professional auctioneers. The average charity may find it too complex.

Joe Small Auctioneers, Inc.
Suite 112
10859 Switzer Avenue
Dallas, Texas 75238
USA
(214) 503-9155
(800) 521-2066 (US only)

Joe Small has raised over $20 Million for charities through 1300 auctions. He has spent some time in Winnipeg, and is familiar with Canada. If you contact him, he'll send a free copy of his excellent article from Fundraising Management magazine's March 1988 issue. It's called “Is an Auction in Your Future?” He has also offered to provide advice to any reader of this book at no charge. He will accept collect calls from Canada.

Too often at special events, non-profits earn relatively little money for hours of labour. Admission charges, cash bars and passing the hat sometimes barely bring enough revenue to cover out of pocket costs.

Experience in many events shows that blank cheques and a good speech can multiply donations. In many cases, this can be so successful that free admission to the event becomes more effective than a cover charge.

Board and staff feel pressure to set ticket prices to the lowest common denominator. They don't. want to exclude anyone.

Yet many people could and would give more money if asked properly. You may worry that this might annoy good supporters. Done right, however, it actually builds greater support - both financial and psychological. You'll find out what to say below.

Provide blank counter cheques. Urge donors to use them if they don't have their own cheque books handy. Blank cheques increase the average gift dramatically where you might ordinarily pass a hat.

Why provide blank cheques? Less than 25% of men carry their cheque books with them routinely. Among women, 30% to 40% typically do not have cheque books with them. Fewer women carry cheques at formal occasions, because smaller purses do not allow space.

People with cheques are free to give generously. With cash, however, they wonder if the money in their wallets will last till their next trip to the bank.

Typically, when passing the hat, most people put in coins or small bills - $2 or $5. A $20 bill usually means someone has taken change.

When blank cheques are available, donations at mass public events have typically averaged $10. Some people will donate up to $100 or $200. People also have the option of writing one or more post-dated cheques. This makes it even easier to be generous.

Donors can also get a tax-deduction receipt for a cheque, but not for anonymous gifts of cash. Possibly more important, the organization captures the name and address of each donor for use in future fundraising. These people are likely to be frequent repeat givers.

The Words that Win Larger Contributions

Ask just before intermission. Afterwards people may leave. Earlier people aren't warm enough.

§ 1 Tell people right away that you are going to ask for money. Don't surprise them.

§ 2 Use humour. You might tell people you are the 'commercial.' Some actors satirize TV preachers. Others prefer to play it straight. Make sure whatever you do is appropriate to the audience and to you.

§ 3 Relax. If you are nervous, take a partner up with you to take turns making parts of the appeal. This way one can fill in what the other might forget. Also, consider telling the audience you're nervous. They may be feeling uncomfortable too, and such an admission will help everyone relax.

§ 4 Use audience participation. People may feel restless, particularly after hearing serious speeches or music. In preparation for asking them to give, ask them to be part of the event, not just observers.

Start quietly. Most people are shy, and reluctant to join in public participation. Then build momentum and volume to create excitement.

For example, a peace group asked people to whisper 'We want peace now.'

“Say it silently as a prayer. Now repeat it loud enough to be heard outside. Now loud enough to send a message downtown. Louder now, to carry all the way to Parliament Hill. Louder still for Washington. Even louder for Moscow. As loud as you can, so the word is heard all the way around the world.”

The phrase can be adapted infinitely. Consider asking the audience to call out phrases like these:

“We want safe streets.”
“Kids need a place to play.”
“A mind is a terrible thing to waste.”
“Art is civilization made visible.”

Musical groups might ask people to sing along in a short song, perhaps in a round. Sports groups can also sing out.

Clearly this is suitable only for certain types of groups, and on selected occasions. The effect is powerful when it is used, however.

§ 5 Tell people what the money is for, concretely. Explain the problems and the solutions. Break projects into bite-size chunks. Perhaps $5 will buy schoolbooks for one child, immunize 10, or educate people on the need to do so.

Guided visualizations are very effective. In a controlled test without this special method, donations dropped 25%.

Here's how it works in a conservation example. You can easily adapt it to schools, health care, arts, sports, social service or advocacy.

Ask people to close their eyes. “Imagine $30. Now imagine that in pennies. Imagine how much 3,000 pennies weighs, and how much space it takes. Now, in your minds eye, spread the pennies out on the ground, with an inch or two between them. Now imagine each penny turning into an acorn, sprouting and growing. It's a seedling now, a sapling, a young grove growing as you watch. It's a sun-dappled woods, and now a mighty oak forest sheltering animals, protecting the soil, providing a natural retreat for us all. Three thousand acorns - That's how many are needed to reforest one acre. And each acre costs $30. Won't you contribute an acre of forest tonight?”

If your work is in advocacy and public education, suggest “each penny turns into an educational pamphlet.- That's all they cost to print - one cent each. Imagine the pamphlets lined up end to end down the sidewalk. That would stretch 20 blocks long. Imagine one person reading each pamphlet: 3,000 people. Some may throw it away, of course. But others will pass it on to a friend or two. Each is one more person who understands about the issues. Your $30 gift can reach out to 3,000 people.”

§ 6Tell people “guilt will not be used to get donations tonight. For those who cannot afford a gift tonight, instead please tell a few others about our work - that is an important contribution. For those who can afford $15 or $25, thank you... we will make sure the money is put to the best possible use.”

§ 7 Encourage large donations. Say, “I know there are one or two people here who can afford to give $100 or $200 tonight. No one will be mentioned by name, but you know who you are. We hope you will give to the best of your ability.”

This phrase consistently leads to at least one or two donations in this range. Others in the audience give $50 and $75, because they upper limit has been set high.

§ 8 Give out cheque blanks at this point during the fundraising appeal. Have volunteer ushers hand a stack to people at the end of each row, or at each table, to pass along.

If that's not possible, plan in advance to include the blank cheques inside the program for the evening, if each person gets one.

Explain, "The cheques blanks are to help those who want to give more, but don't have your cheque book with you." Tell people using their own cheques the proper name of the group to which the cheque is payable.

§ 9 Now get a public pace-setting donation, if at all possible. Arrange in advance for a well known supporter to make a larger donation on stage. This should be a person the audience will respect and identify with - not too rich. People do follow an example.

§ 10 As you finish the fundraising speech, pass buckets through the audience to collect donations. Don't just ask people to hand in donations at the door, or at a literature table. In the crush as people leave, some who want to give may not get through, or may just forget. The bucket should be large enough not to overflow, and to afford privacy. It is a good idea to 'prime the pump' with a folded blank cheque and a few large denomination bills.

§ 11 While the buckets are being passed, run through a few other details. This is important information. It also fills the few minutes while people concentrate on their gifts. Don't break for intermission until the buckets have been around.

Here are the points to cover.

a) “If you don't know your chequing account number, just put your phone number below your address. A volunteer will call you in the next day or two.” Make sure you have people ready to do this.

b) Give out pens for people who need them.

c) Assure people you do still accept cash.

d) You will want to get as many names and addresses as possible, including those who can't give. Ask them to be part of an urgent action network, or a phone tree. The least effective thing to say is “add you name to our mailing list.” Invite people who aren't giving to put their names and addresses on the back of a cheque blank and put it in the container.

e) Encourage post-dated cheques. Suggest that some people may prefer to give $25 a month for 4 months, or $10 a month for 10 months. This makes it possible for people to give larger amounts painlessly.

f) Tell people how to fill in the cheque blanks, line by line. There are always a few who forget to sign it, or put the wrong date on.

§ 12 Close strongly, reinforcing why the need is so urgent.

§ 13 Later, before the event ends, come back and announce the total given. Thank everyone thoroughly. This makes them feel appreciated. More important, it encourages late donations. About 10% more money comes in if you do this.

A Few Words on Blank Cheques

Check with the banks first. Banks may charge extra fees on blank cheques because they do not have the account number encoded in magnetic ink. The person who writes the cheque usually pays the service charge, unfortunately. Banks may lift the extra charge for a non-profit group. If they can't do that, they may let your group pay the service charge instead of the donors. On large donations, that's worthwhile. If not, phone donors who have accounts at offending institutions. Explain the situation, and ask them to send a replacement cheque.

Encourage people to use their own cheques whenever possible. However, blank cheques will make it easy for those who do not carry their cheque books to be generous.

What should the blank cheque look like?

Blank cheques can be typed and photocopied, or purchased at stationery shops.

In the upper left corner, provide spaces for the donor's:

• name;
• address, city, province, postal code;
• phone number.

In the upper right, give blanks for:

• the date;
• the amount in numbers.

In the middle:

• payable to (the official name of your group),
• a large blank to write in the amount in letters.

In the lower left, blanks for:

• name of bank, trust company or credit union
• branch address
• account number.

In the lower right, the signature line.

Leave the bottom ½ inch blank for the bank's coding machine.

Somewhere on the cheque, include the name and address of your group. Since someone may take the cheque away, make it easy to send in a donation later - but don't encourage this! If the donation is tax deductible, give your group's charitable registration number here.

On the left, provide a tear-off stub as a temporary receipt. This encourages people to record their contribution in their cheque-book balance sheets later. reducing the number of cheques return marked Not Sufficient Funds (NSF). Avoid embarrassing requests for replacements and costly bank charges.

You may also offer blanks for credit card donations. These tend to be 20% higher than donations by cheque. You don't need to make an impression of the credit card with the familiar little machine. It is sufficient to write in the card number, expiry date, amount and the person s name and address. If you are not set up to take credit card donations, most banks and trust companies can show you this simple and inexpensive process.

Optional extras include boxes to check if people wish to volunteer, or want more information, or require a tax receipt.

The cheque should be on a separate piece of paper, not part of a flyer or other document. This makes it easier to use, without tearing off pieces. It can, if necessary, be stapled to another document.