It is a fact: If you expect the worst, you won’t be disappointed. Concerns about an
economic downturn mean that charities, schools, and foundations are fearful that
donations will at best, recede or at worst, dry up. This does not have to be the case. In
fact, it is quite possible, with dedicated volunteers and staff, a little ingenuity and hard
work, a non-profit might be able to increase their income. A slowing economy does not
have to automatically mean a downturn in fundraising success.
How can that be? In order to understand just how you can be more successful in a down
economy, let’s look at why people give money in the first place. There is the obvious tax
benefit but more important than that, is the cause to which they are giving. Why do
donors select one cause to benefit from their generosity and not others? It has to do with
how they have bonded with their chosen cause. Bonded? Yes! They feel close to the
cause for some reason. It may be that they were introduced to the cause through a friend
or family member, or that they benefited from the organization at some point in the past.
Regardless of the reason, feeling that this organization should benefit from them is
critical to getting them to write a check, attend an event, or buy at an auction.
So what happens when we hit a downturn in the economy and potential donors are more
focused on making ends meet than in supporting their favorite charity? This will happen
of course, but supporters don’t go away entirely. They merely become more selective as
to who they are giving and how much they give. This is the key to making more money
in a slowing economy; it is critical that the narrowing supply of more selective donations
fall into your court, not elsewhere. As related to charity auctions, there are some very
clear paths to make this happen.
Start by examining your event. Review the past few years. What have you done to make
every guest feel special? Did you eliminate the check in and check out lines? Did you
say “thank you” early and often? How soon after your event did you send out a thank
you letter or card? Was it a form letter or a real from the heart hand-signed letter? Was
your event entertaining from start to finish, and was the auction itself well managed, well
lit (in the silent auction area) and have great sound (in the live auction area)? Did it
finish on time? Did your money come from the same group of supporters with “big
bucks,” or did you take care to be inclusive of all economic capability? Did you put them
to sleep early with endless speeches or give them plenty of time for socialization at their
tables? Was there a perception that your event was the “go to” party and those not there
missed something special? What about those who donated items, services and financial
support for the event? Were they put on a pedestal, sent a timely thank you letter, and
included in post event results publicity so they knew they were appreciated?
Remember that you are competing with other events, and with more financial pressure
supporters are going to be more selective. You want to make sure they select your cause,
this time and every time you ask. You are trying to build loyalty, but loyalty is a twoway
street. For their continued support your guests deserve the following, as a minimum:
Each event has its own personality and you want yours to stand out so you have no
problems filling the room. However, merely filling the room is only part of the equation.
You want to fill the room with “bidders” not “eaters.” Bidders will always eat the meal,
but eaters will not always bid on your items. How then do you find the bidders among
the eaters? Start by being honest about why you are holding your event – make it clear
that it is a fund raiser, not just a party. Charge a bit more than expected - it allows your
supporters to opt in, while those that are not serious about your cause to opt out. Fill
tables using table captains, supporters who agree to attend, and who agree to fill a table
with like-minded supporters. There is nothing more powerful at an auction than an entire
table ALL bidding on the items. Having several tables filled in this fashion can
dramatically increase auction revenue.
It is also important to create and maintain a sellers market. Take the number of bidders
you will have attending your event. One couple or one individual attendee equals one
“buying unit.” A good balance is to have one silent auction item for each buying unit.
This will give you a good ratio of items to bidders, bridging the transition from a “buyers
market” to a “sellers market.” A higher ratio of bidders to items will increase yields, but
the lack of items will reduce total income. A lower ratio of bidders to items will reduce
the yield, meaning items will sell well under value.
Finally, look at where your money comes from. If you rely each year on the same group
of supporters, you are in risky territory. It only takes one or two key supporters to opt out
in a given year for your event to suffer financially. Reduce your risk by always looking
to expand your base of support, and by not relying too aggressively on high ticket live
auction items designed for a handful of bidders. You are better off having a few more
items in your live auction with broader appeal than fewer, higher ticket items that must
have the big spenders in the room to be sold.
Consider that your money is not made by your successful high bidders, but by the second,
third and fourth high bidders on any given item. The high bidder may win the item, but it
is the other bidders who drive the price. Without competition, you give your items away
too cheaply. This is why it is critical to not rely on a handful of people who can make or
break your event. Your strength is in a broader audience.
You can make money in a slowing economy, if you are smart about it. Your support
network, your donors, and your event guests all have choices. Like the smart fisherman
who knows “where they are biting”, you need to go where your support is. More
importantly, you need to hang on to the support you already have by running crisp,
professional, hassle free events, and thanking your supporters early, often and sincerely.
Jay Fiske
Jay Fiske is the CEO of MaestroSoft and a nationally known auction consultant. He has been actively
helping charities raise money through auctions since 1990, and his two companies, Northwest Benefit
Auctions, Inc., and MaestroSoft, Inc. have collectively helped charities raise in excess of $3 Billion. More
information is available at www.auctionhelp.com and www.maestrosoft.com
A PDF version of this document is available for download here.
|