Episode 36: Should I have a live auction?

Auctions

Jan 17

Live auctions serve a purpose other than just raising more money for your organization.

In this episode I share:

The purpose of a live auction
The types of events that work best for live auctions
How to find live auction items
Why it’s important to work with an auctioneer

TRANSCRIPT + LISTENER ACTION ITEM

This is the final episode in a five-part series on auctions. Below are the links to the first four episodes if you missed them.

Purpose of a live auction.

The purpose of a live auction is to warm up your audience for a live giving moment. These can go by many names; fund-a-need, ask, paddle raise, mission moment. Whatever you call it, this is when you ask your audience to give to your organization in a very public way.

Paddle raise or giving moment.

At some point during the event, usually at check in, each member of your audience gets a bid paddle. Bid paddles can take various forms, but it's often just a large three- or four-digit number on a piece of cardstock. Oftentimes that cardstock will be attached to a stick, but not always.

Each bid paddle number has been assigned to an individual at your event. I'm not going to get into the nitty gritty details of how to assign bid numbers, how to track them or details such as the order in which you should auction off live auction items. This episode is a high-level overview of live auctions to help you determine if you should have one.

If you'd like me to create a separate episode, getting into much more detail about live auctions, please go to my website and let me know if a detailed episode on live auctions is appealing to you. You can also DM me on social media. My social media links are below.

Back to how the paddle raise works…During the ask or fund a need, the auctioneer will start with a designated dollar amount, usually the highest amount anyone in the room is willing or able to donate.

For your audience, the highest level could be $1,000, it could be $5,000, or could be $10, 000. You want to determine that amount in advance and have a designated donor in the audience at that level. From there, the auctioneer will decrease the donation amount. If the starting bid was $5, 000, the next level might be $2,500.

This continues incrementally until you get to the lowest amount. And that's typically $50 to $100. There are a couple reasons why this method of ask or paddle raise is successful. 1) It builds donation momentum and 2) it gives everyone in the room the opportunity to give at a level in which they are comfortable.

There are usually very few people who can give at the $5,000 level, but by the time you get to the lower amounts, nearly everyone in the room has their paddle raised so it builds that momentum.

Your audience, auctioneer & the paddle raise.

Yes, your auction can and should raise money for your organization, but the purpose is to help your audience to get to know the cadence of your auctioneer and to understand the process of the paddle raise.

Not only does the live auction help your audience get to know the auctioneer, but it also helps the auctioneer to get to know your audience. Your auctioneer gets to have a little fun with your audience. They warm up to the group and get to know who the key players are in the room before it’s time for the ask or the fund-a-need.

Types of events that work best for live auctions.

For live auctions, you want a captive audience. This works best at a gala-style event. A gala-style event is simply an event that brings your audience together, usually for a meal and a program. That doesn't mean it has to be a black-tie event on a Saturday night at some fancy pants venue. It could be a Thursday morning breakfast or a Tuesday lunch event.

You just need an event or time when you have a captive audience, where your supporters are in one place focused on something. Some of your supporters will come just to hear your message. However, most often in a gala type setting, you must draw in your audience with something else.

Whatever that draw is will depend on your audience. It could be a keynote speaker, a band or a DJ, a comedian, an awards show. It can be anything that is relevant and appealing to your audience.

If you listen to Ep. 1 of this podcast, you've heard me preach that you should always determine who your target audience is and then build an event around that audience. Let's say your audience is more suited to a golf tournament, a 5k or some other active event. In my experience, live auctions don't work well for these types of events.

That's not to say it can't be done, but you'd have to have a sit down component to the event, where you bring everyone together to be able to conduct a successful live auction. For instance, I've coordinated golf tournaments where we bring everyone together for lunch after golf. That's when you would want to have your live auction and ask.

Where do you find live auction items?

The best live auction items are travel and unique or VIP experiences. But again, you need to focus on your target audience. Think about items that would appeal to them.

For example, I worked with a small private school for about three years on their fundraising gala. The hottest live auction item every single year was a unique experience that was donated by either the principal or a teacher at the school.

One year, the gym teacher offered an Olympics-style competition against him for the child of the winning bidder. The child of the winning bidder got to bring, I think it was maybe 10 friends to come and compete against the teacher in this Olympic-style competition. This was wildly popular on the live auction.

I worked with another public school for about five years. One year the most popular live auction item was lawn mowing. The district had five elementary schools and one of the principals at one of the five elementary schools donated his services to come to the house of the winning bidder and mow their lawn using his lawn tractor.

This is not something you typically think of as a live auction item if you're thinking about the typical black tie type events. But they knew their audience and it was extremely popular on the live auction.

For another client the two most popular live auction items were sold out tickets to an Adele concert, this was several years ago, and a pro baseball package.

The baseball package included four tickets to a specified game, a jersey, a signed ball and one of the four people who were attending the game would get to throw out the starting pitch to the team's mascot.

What all these popular live auction items have in common is they were donated by someone close to the organization.

That's the first place you want to start when looking for live auction items. Start by talking to your current and past board members. In some instances, board members will donate items themselves or through their companies. They might have box seats to a sports game, concert tickets, stays at hotels or condos or cabins, or board members will get donations through their connections.

For one client, their board member is a pilot. At last year's live auction, he offered a four-hour private airplane tour. The winning bidder could decide where they wanted to go and what they wanted to see within those four hours.

I've also had clients where board members offer private dining in their home. I had a client where one of their board members was of Indian descent. She offered a full course Indian meal for up to eight people at her home. Other board members have offered week-long stays at their cabins or condos.

Donations for the live auction items don't have to be personally donated by board members. For that same client where the board member was a pilot, another one of their board members had a connection to a mixologist or a cocktail specialist. The mixologist donated a three-hour cocktail class for 10 to 15 people. The mixologist brought all the supplies to the winning bidders home and taught those 10 to 15 people how to make three cocktails.

These are just some examples of what popular live auction items from my events have been. What you'll notice is that they are all unique and personalized in some way.

Should the item go on the live or silent auction?

If you're wondering how to determine whether an item is suitable for a live auction or possibly should go on your silent auction, there are two key factors; price and uniqueness.

Typically, you want higher end items on your live auction. That can mean different things for different organizations based on your audience. For some audiences, a $500 item is a high end item and should go on your live auction. For others, live auction items might start at $5,000.

Unique items are ideal for live auctions. These are things you can't buy. You can't go out and buy a first pitch at a game. Things such as sold out concert tickets, a behind the scenes tour from your local zookeeper, a private dinner at your home from a local chef. The more unique, the better.

Auction consignment

What if your board doesn't have those types of connections? There's something called auction consignment. These are websites that will sell you live auction items on consignment. These websites go out and source unique experiences and then sell them to you on consignment.

Auction consignment benefits.

1. These sites have connections, and they work with people around the globe to source unique experiences.

2. If the auction item doesn't sell, you pay nothing.

3. Customer service at these consignment sites is usually outstanding. At least that's been my experience.

4. You can download high quality photos of the item from the consignment site to use when promoting your live auction item. That might not seem like a big deal, but photos are huge when it comes to promoting both live and silent auctions.

5. Once you have your winning bidder, you pass them off to the consignment site, to their customer service people, and they work with the winning bidder to help them redeem their item. You don't have to do any follow up. At least, that's been my experience.

Auction consignment drawbacks.

1. The packages are expensive. At the time of this post, the least expensive travel package that I found was $895 and it didn't include airfare.

2. The amount of profit that you can make on a consignment item is much, much less compared to donated items.

3. You must find items that are essentially guaranteed to appeal to your audience. And you must find at least one person who's willing to start the bidding and who's willing to buy that item if no one else bids.

With items that are donated by board members, there are usually people in the audience that are willing and able to bid on those items. The board member wants their item to be popular on the live auction. They’ve probably been talking about it with the people that they're inviting to the event.

With a consignment item, you don't have that built in excitement because there's no connection to the organization. You also don't want to lose money on a consignment item so the best way to work with a consignment package is to start your bidding above the cost of the consignment item.

When you go to an auction consignment website, you can search for items by a number of criteria, including most popular or new items, price, how many people you want to for the package, location and the type of experience.

So if I wanted a consignment item for my live auction, I'd have to let the consignment site know. I'd have to sign an agreement stating that if the item sells, I'll have to pay them whatever the consignment amount is. And I could start the bidding at the consignment price so that if it sells, I'm not out anything. But I don't make anything for the nonprofit. And most bidders want to know that at least some of what they're spending goes to support the organization.

Using consignment items can be a way to build up your live auction. In my experience, I've seen nonprofits use one or two consignment items to sort of fill in the gaps, not use consignment for the entire live auction.

Working with an auctioneer.

I'm not going to tell you that hiring an auctioneer will definitely make your live auction more successful. I have worked with nonprofits who have used board members or other non-auction professionals to do their live auction and fund-a-need, and it's worked very well.

With that said, if you have the budget, I highly recommend working with a professional live auctioneer. They can be expensive, sometimes in the thousands of dollars, but they can be worth it.

As I mentioned, the purpose of a live auction is to warm up your audience for the ask. This is where your auctioneer can shine. I've had instances where auctioneers have come on sort of at the last minute where the organization didn't really decide to have an auctioneer until fairly late in the game and the auctioneer came on board with very little prep and spoke to the, the nonprofit's audience about the organization's mission. They did it with humor, with thoughtfulness, and with gratitude, which can can lead to higher donations in the moment.

Good auctioneers are good observers. Yes, they can talk fast, but where they really shine is in listening and reading an audience. They know where to engage audience members in playful competition for your live auction items and to engage the audience's heads and hearts during the ask. If you've ever seen a live auctioneer at a fundraising event, it's. It's fun to watch them do what they do best.

Another benefit to hiring an auctioneer is they can help you with planning.

They can recommend popular items, help you determine how many items you should have, and which items are best suited for live versus silent auction, and in what order the auction items should be auctioned. There is a bit of an art and a science to the order of a live auction, and your auctioneer can help you with that.

Should I have a live auction? It's a question I get fairly frequently, and it's not something I can answer for you. But I have hopefully given you some criteria, to determine if your event would benefit from a live auction.

Let's review that checklist. You can also download the checklist here if you need to review it with your staff or board to make a decision.

1. What type of event are you having? Is it suitable for a live auction? As I said, active events, are not the best but gala-style events are.

2. Are you doing a hard ask or a paddle raise? The live auction warms up your audience for a paddle raise so if you’re not doing one it doesn’t make sense to have a live auction.

3. Does your board have means or connections to high-end, unique live auction items? If not, do we have someone willing to publicly bid on a consignment item?

4. Do we have the budget for a live auctioneer? Unless you know that a board member or some non-auction professional has either experience or skills to pull off a live auction and a fund a need, I would hire a professional auctioneer.

Listener Action Item

Determine if a live auction is right for your organization and your event.
If you decide to move forward with a live auction, and you haven't already, talk to your board about the types of unique, one-of-a-kind experiences you're hoping to get for the auction. Think about your target audience and what would appeal to them. Give your board member some specific examples instead of just saying, “we need unique experiences”. Unique is a subjective word so the more detailed you can be with examples of what you would like to see from the board, the better.
Research consignment item sites. You may not use a consignment site, but you want to have them in your back pocket if you need to round out your auction. The two sites that I recommend are Winspire and CharityAce Auctions.
If you're thinking about hiring a live auctioneer, which I highly recommend, talk to other nonprofits in your area to see who they've used. Start reaching out to those auctioneers to get a rough idea of the cost. The auctioneers I've worked with don't have a set price. Their price will depend on their availability and time of year. If your event is in a busy season, you can expect to pay more. Auctioneers will try to work within your budget. So even if your nonprofit neighbor down the road paid X for that exact same auctioneer, you could get a bid that's either higher or lower, depending on some of those factors.

That's a very high-level overview of live auctions that will hopefully help you answer the question, should I have a live auction? If your board is on board, start brainstorming ideas to fit your audience's wants or needs and get recruiting live auction items.

Now that sounds like a plan.