Profit or Loss?

Sherri: Welcome to Cahoots Commentary, where we share our comments about what to do and most importantly, what not to do in your nonprofit communications. Thanks for joining us. In this episode, we’ll discuss the widespread use of charity auctions by organizations, ministries, churches, schools, pretty much any nonprofit wishing to raise money. So our question is this: Profit or Loss? Doesn’t everybody win with Charity Auctions? 

Gonna be straightforward right up front about the fact we have a lot of opinions about auctions. Over the decades, I’ve lost count of the hundreds of events that we as an agency have come alongside, concepted, created, executed, for our nonprofit clients and ministries. And I remember years ago being among the first in the Denver metro area to actually use an auction as a fundraiser. And so we speak with a lot of experience. We won’t ever recommend for you to do an auction unless it’s got absolute very stringent, specific content. 

And we’ll talk about that in a little bit. But for the most part, an auction is a bit of a gimmick. And what that means: it’s something or a hook, it’s a tool that you can use to get people there because it’ll be more exciting. The sad part is, what’s being lost in that whole concept or strategy is you and your ministry, your church, your organization’s cause. What gets overshadowed is that what you are doing and how you’re successful at it and the stories that come out of it and why that is appealing to your donors and supporters in and of itself. To add on a gimmick or a tool to make it more exciting says that maybe you’re not taking the time you need to really be capturing on a regular basis the wonderful and exciting stories and activities and people’s lives who’ve been touched by what you do. 

That is what keeps people coming back. The other aspect of a good event is making it a signature event. And if you think about somebody’s signature, think of your own. If you write your signature, there are people in the world; dastardly people who are forgers, who try to copy a signature to make it look real. That’s how exclusive and unique your signature is. And what we as an agency, really, really strive is to find what type of event can a client use that you can call a signature event. An auction is not a signature event, it is not unique. It looks like everybody else’s signature. It does not distinguish you at all. And we’ll talk a little bit too about what all has to go into it.  

Dee: I totally agree. And without an auction, the emphasis is on you, on your cause, your mission. And I think, you know, being a communications firm, we’ve seen a lot of auctions. Probably not as many as an auctioneer, but close. 

Sherri: We’ve even been an auctioneer before. 

Dee: So our whole emphasis is to appeal to every type of sense to get somebody to react and engage with us. What we do with the signature event is we’re doing that towards our cause. And what you’ve got with an auction is it’s diverting you away from that path. So when we use all of our senses and try to relate everything we can, people are gonna remember our cause, our organization better than if we are diluted by the type of items in the auction.  

Sherri: Oh it was a good auction or a bad auction, you go, “what was the cause?” And people go, “Uh, I can’t remember, I dunno, my friend brought me to it.” You know?  

Dee: Right. 

Sherri: And they don’t leave knowing what the cause or the organization or ministry is. Just what kind of auction items they have. 

Dee: As a staff, the ones that we have taken home and have remembered and keep bringing up are those that were relevant to the times they were current. They educated, there was usually a well celebrated speaker at them, but it really turned the whole emphasis back to the organization. 

Sherri: They were doing an experience with the ministry. 

Dee: Yes. How they were making the world a better place in being this organization or this cause 

Sherri: And how the money and support raised through it was going to let me be part of that. I would be investing in that very thing instead of, “I got the cutest set of candlestick holders, let me tell you, they were just the best and I got ’em for just $10.”  

I always think about what it’s like to be orchestrating an event for a client that insisted on an auction and we’d go along with it and halfway through a speaker or something where they were trying, or the executive director is up in front telling the story or what the mission is of the organization and people jumping up and running over to make sure that they got the last bid in on the auction. And the distraction that would come with all of that where you go, “oh my goodness, we’ve lost control of the room.” 

Sherri: We haven’t got the focus on what is absolutely at hand and what is most important and the whole purpose of a fundraiser. And we get that because, you know, we’re held 150% accountable for whether or not an event raises money for a client. If it isn’t successful, trust me, as a professional agency that does that, we’re the first ones to know. And so making sure that you go, “how do you really make sure that it’s spot on?”  

Now there are auctions that can be added onto a signature event that are appropriate and actually can lend to the overall experience. The one that I always felt was obviously way out of my league, I couldn’t even consider bidding on it. One of our clients was Wings Over the Rockies Air and Space Museum. And I’ll give them a shout out because they’re one of our local museums and they’re lovely, but they’re an air and space museum and they, every year, would bring in at their signature event a notable person in air or space. 

They brought in astronauts, they brought in major people in aviation, incredible people that you would normally not even get to see or hear, that was good enough. But their auction would feature those same type of people as an auction item. And I’ll give you an example of a couple of their primary supporters. One was John Travolta, another one was Harrison Ford. Pretty big names. And one of the auction items was, many people don’t know this, that John Travolta has his own DC 10 and he offered an auction item of getting to fly with him in his DC 10 and flying someplace and having lunch. I think that’s what it was. 

 

Well, that attracted a lot of people to that event that normally would not have come. And I will tell you that that was incredibly effective. But look at what it was: It was aviation. Harrison Ford was the same thing. He’s a pilot as well. And it was an opportunity to come alongside him. Of course those brought in huge, huge gifts to Wings Over the Rockies, but people were also there because they got to hear and see Buzz Aldrin. The idea is it’s still a signature event, but that the auction items complement the mission or cause of the organization. 

Kate: And what’s important about that example, too, was thinking about how much time the auction and looking at auction items and things actually took up out of the runtime. In those cases, it was a shorter time. Like these things were announced ahead of time. It wasn’t supposed to take up a ton of time. It was a section, but the rest was focused on who was speaking at that event and then making their actual appeal at the end of the event.  

A lot of times, auctions take up just a massive amount of the time people are at the event. They’ll spend more time looking at items than getting to talk with people at their table or talking with staff, interacting with them. Especially if you have paddle raises and things. Those take up even more time. And so that takes up a lot of time that can be used for your actual appeal or talking about your mission. And we would always lean towards spending time on the things that matter to your organization so that people leave understanding what they just saw, who they’re supporting, and can communicate that to other people later instead of just saying, yeah, there was a cool, like you said, candlestick holder or whatever, or “I didn’t find anything I even wanted to buy.” That’s what will stick with people. So just making sure it doesn’t take up a ton of time and the focus is put on other things makes a difference. 

Sherri: Well, and back it up. If you have never coordinated an auction, let me just tell you now, there’s wonderful databases and all kinds of wonderful applications you can get that’ll help with your bidding and all that kind of stuff. But if you’ve got a hundred auction items, every single item you need to ask for it. You need to obtain it from someone. That usually means physically going and getting that gift card or getting that object. You then have to document it in whatever system you’re using, whether it’s an Excel spreadsheet or one of the nice auction applications that still has to be done there as well. You’ve gotta print out the bid form, you have to set up the entire auction bidding process. You have to be conducting transactions like a store. It takes so many volunteers to then manage that the night of the event. 

We have had, I’ve lost count the number of people and volunteers who go, “oh, please tell us we’re not gonna have to do an auction again.” And it’s because they’re burnt out. They don’t wanna have to do it again. It’s kind of similar to golf tournaments where you just go, it is so people and time intensive that the burnout, the ramifications on staff, volunteers, board members and local businesses, “oh, you’re back again for another gift card.”  

The burnout happens and they’ve got longevity for about two or three years unless they’ve got a component like John Travolta for Wings Over the Rockies. And we understand that’s an exception, but you don’t have to be a big organization that has friends like John Travolta to be able to have an auction if you’re going to add it in, that only maybe has three or four or five auction items that are directly related to your organization or ministry. We’ve for example, served a school, a Christian private school, that had a great auction.  

Dee: The auction basically took the artwork from the students and they auctioned off the artwork. Now the thing that supported the school was that their platform for how they taught art was they used the old duplicating masters technique. So they would pick specific historical or classical art pieces and have the kids duplicate them. Then all of those duplicates from the kids were sold as an auction piece at the auction. But it totally supported and emphasized their type of education, the level that the kids were educated in, that as in these duplicates were sometimes done by third and fourth graders. And they were amazing. 

Sherri: They were amazing. It was a perfect demonstration of the outstanding art education that was available through that school. 

Dee: Correct. 

Sherri: That was spot on. And those people knew that they were investing in the school because most of them were parents as well going, “yes, that’s our kid.” So, and people who would buy like the winning or the most sought after one every year where they were actually starting collections of them, but it was directly associated and the amount of time it took to organize that, display them, promote it, auction them was minimal. You know, much like you were saying Kate, how much time is being focused on during the evening or the event itself. A smaller scale, but it emphasizes That particular cause or mission. 

Kate: And in that case, it was artwork that they were already doing with the students as curriculum. So it’s not additional time on staff ’cause they’re already doing this project. So it all ties in. And it’s not asking one of the staff to just go make something or find something. It all ties together. 

Sherri: Right. It was a perfect blend and beautifully done. A beautiful demonstration of what the organization does and why it made a difference. And here’s a, and we can say this again from professional experience because we have done this and we know it is true. The number of clients who we have had to graciously, carefully, prayerfully encourage to drop an auction and instead embellish the program with good testimonial, with good education, with great experiential opportunities and a good appeal and not be terrified. Because so many people think that the only way they’re gonna make money is if they’ve got an auction, and that is just simply not true. We have had, I can think of one, it was a local organization that had done auctions every year and it was their volunteers who said, “please tell them not to do this anymore.” 

And they trusted us and they brought in a speaker that was very specifically related, a great speaker to their cause and their mission. And they did an appeal at the very end and said, “because of this, here’s who’s been helped.” We showed a dynamic testimonial video and they did just a straight appeal. “We need X number of dollars this next year to be able to accomplish this program and we would love for you to come tonight to come alongside that and help us do that.” And they brought in more money than they ever had on just doing their auction and kind of having a nice program that really wasn’t signature, if you will. You know, they were making $40,000 to $50,000 previously. And in the first year that they did it without the auction, they were up in the six figures. We just know your cause is worth it when it’s a signature event and people are moved. 

You don’t need to have a gimmick or something else to entertain them with. You’re why they came. Your story and your ministry and what you do is worthwhile and that appeal will carry the day. And we’ve seen it for decades. Yeah. We’ve seen it to be true.  

Dee: You’re worthy, your cause is worthy. 

Sherri: Now, the difficulty in a lot of that, and what we find again, and you’ve probably heard us say this before here, one of the obstacles we run into is that clients don’t have a good system for capturing story. What’s happening in the field? Who are you serving? Getting those stories, recording those stories, getting permission slips and sign offs so that you can use people’s stories. Getting the photographs that go along with it and archiving those and having those available so that you can use them so that you can create them so that you can share them at your events. 

And that transcends just like, you know, we hear the “kachunk, kachunk, kachunk” thing. You can use it for appeals, you can then use it for an email, you can use it for a direct mailer. You can use them at your events and that makes it signature as well. And so, but you’ve got to have a good system of capturing those stories because we’ve found so many organizations are so busy out there working that they forget if they don’t write it down or capture it in a regular consistent way that it’s hard to go back retro and go, wow, what did we do this year? And it happens all the time. We see it all the time. So setting up a good system so that when the time comes for your signature event, you can also share signature experiences with the people who attend.  

So: Profit or Loss? Doesn’t everybody win with Charity Auctions? In most cases it’s a loss because it dilutes your audiences learning about your cause through a unique experiential event. It can actually result in the loss of volunteers and even sometimes local business support. It can be a profit if you tie in those elements that are absolutely signature for your organization, ministry or church. That’s when it can work and it can add to it.  

If you’d like to learn how your organization, ministry or church can create signature fundraising events that raise more money without an auction, we have Cahoots training courses for that. Check them out on our website CahootsCommunications.com. Thanks for listening.