Mobile Bids Changing Auctions

June 15, 2012       Gary Morton      

The 400 guests at the Foundation for Belmont Education’s spring dinner-dance fundraiser bid on eight high-end items, such as a “Green Monster Experience” at nearby Fenway Park in Boston and a 15-guest catered dinner.

When they left, they could continue bidding for 266 other items — including two VIP tickets to a taping of The Colbert Report and a trip to Mexico — in the foundation’s online auction, which was part of this year’s fundraiser.

The gala and auction netted just more than $150,000 to benefit the Massachusetts town’s public schools, a $33,000 increase from last year when the foundation tested the cyberspace waters with a limited online auction of 100 items, said Heidi Sawyer, auction co-chair.

”We wanted to capture the dollars from guests who do not attend,” she said, noting the dinner-dance sold out for the fourth straight year. “This way everyone can make a difference to our school system by bidding online.”

With winning bids coming from as far away as Florida, Texas and Idaho, the auction reached well beyond the town’s borders and illustrated the benefits of technology.

The tried-and-true fundraising auction, which has been transitioning to high tech, is now mainstream.

Besides the blend of live and online auctions as used in Belmont, mobile phone technology is being used instead of clipboards and bid sheets for silent auctions. Apps for silent auctions include a feature that allows a person to set a bid limit for a specific item. The app will bid incrementally up to that limit and alert the bidder if that level is exceeded, providing an opportunity to up the bid limit. Some auctions that utilize cellular bidding have volunteers available to assist prospective bidders who might be unsure of the process.

Restaurant gift certificates are usually the best sellers for auctions, according to Jon Carson of Bidding for Good, a Cambridge, Mass., firm that helps organizations put on auctions. But local and regional sporting events, unique experiences, outings with VIPs, and travel capture the most attention and individually draw some of the highest bids.

Organizations holding auctions that will not draw the numbers or the socio-economic levels necessary for, say, a trip to Kenya or an outing with a famous person, don’t have to rule out travel packages, according to Michelle Cohen of Mitch-Stuart, Inc., which has offices in California and Florida. The firm customizes travel packages for fundraising auctions and for business incentive programs. Those packages are tailored to the audience — perhaps a weekend at a nearby resort or hotel — by working with the auction’s sponsor.

One of the original online auction methods involves programs through online auction houses like eBay in conjunction with MissionFish. eBay Giving Works allows vendors to donate a percentage of proceeds to a nonprofit certified by MissionFish. Buyers can donate to the charities at checkout.

MissionFish began as a way for nonprofits that received in-kind gifts to sell those they could not use. It joined forces with eBay in 2003. Carson estimated that some 240,000 nonprofit auctions were held last year. A survey by Carson’s firm found that 52 percent of 400 respondents had held an online auction or planned to do so this year; 28 percent were willing to give it a try, and, 6 percent said they would not use an online version.

At silent auctions using clipboards and bid sheets, 39 percent of bidders cited “fighting the crowd” as the biggest drawback and 29 percent “didn’t like it when they didn’t know they had been outbid,” Carson said. The key reason for using technology is to increase revenues for the nonprofit by making it easier for the bidders.

“It’s not magic. It’s just a math problem,” Carson said. The greater the number of bids on a certain item, the higher the price, and the more money for the nonprofit.

That formula worked well for the Disney II Educational Fund in Chicago, where cell phones replaced clipboards, paper and pen as the way to bid. The results were overwhelmingly favorable, said Rick Sobin, foundation treasurer. Despite a smaller audience because of a new venue, Sobin said the auction raised “just under $50,000. Last year we were at $38,000.”

For Sobin the change made perfect sense. The foundation supports Disney II Magnet School, which specializes in art and technology. “We’re a technical school,” he said, “so why not use those technological resources out there to help us raise money?”

Carson considers cellular bidding to be an emerging trend for nonprofit auctions. His firm has run about 50 auctions using mobile phone technology.

Those attending receive an app for their phone. The app allows patrons to decide how much they’re willing to bid for a certain item, set the app to incrementally bid up to that price, and receive an alert if their maximum is exceeded, which lets them consider upping their bid limit. All the while they can mingle and chat with other patrons.

The flexibility apparently pleased patrons, Sobin said. He watched on a computer as the bids kept coming, even during dinner. “The sheer number of bids was dramatically more than in previous years.”

Under the clipboard method, “you only have a certain amount of time” for bidding before dinner, “and only so many people can stand before a sheet and put their name on it,” he said. That limited not only the number of bids on a specific item, but also the number of items one could bid upon.

“Now, someone could stand in one place and bid on 50 items at once,” said Sobin. Online auctions exponentially increase the pool of potential bidders, as shown by the Belmont experience where winning bids came from three states more than 1,000 miles away.

For events such as Belmont’s dinner-dance, a smaller, more focused live auction was conducted, leaving guests more time to socialize and dance. Placard reminders about the online auction were on each table, reducing the need for extra tables holding the varied items offered inside the room; the same placards were placed in doctors’ and dentists’ offices and other locations around town to promote the auction.

The live auction also featured a new twist: A “find-a-need” portion. At the end of the auction, a school administrator spoke about how the money raised helps students by funding technology purchases. The auctioneer asked the guests: “How they could raise money in a matter of minutes to continue this funding,” Sawyer said. “He asked how many can donate $1,000.” Eleven hands shot up. He also asked for commitments of $500, $250 and $100.

“In a few minutes we made $22,000,” Sawyer said.

Sometimes donor recognition at these events is just as important. Flat rhodium pieces and elaborate 3D items plated in 24-karat gold or sterling silver are popular, said Allison Hamilton at ChemArt in Lincoln, R.I. “The first would be a lower-end donor gift where the latter may be used for a fundraiser, or to recognize a higher-end donor.”

While charity auctions have been big draws, Carson said they are far from perfect. Historically, auctions have been tied to dinners and dances. Guests entering the room find tables covered with all the items for auction (often 200 or more) lining the walls. Tables where guests may sit during the gala are in the middle. In silent auctions, clipboards with bid sheets accompany each item; the patron must write her name and bid on the sheet to register a bid. As people crowd around the auction item tables, some find it hard to maneuver close enough to post a bid.

“Sotheby’s would never do it that way,” Carson said, referring to the famous London auctioneer. “Too many items overwhelm bidders. Sotheby will create scarcity,” he said, by limiting the number of items in a lot and bidding on them one at a time.

A group sponsoring an auction can place most of the items online, where one can browse and bid on items at home or, with smart and iPhones, while waiting at a doctor’s office. Removing the distraction of numerous tables at the event focuses guests’ attention on the premium items up for bid. In a silent auction the use of cellular phones results in more bidding. One drawback is the amount of work online auctions require, Belmont’s Sawyer said, but the outcome was worth the effort.

“It is the area that reaches out to the entire community, she said. “In many ways it also helps spread the word of our organization. The businesses actually seemed to want to give more to us because they got the extra advertising plug [having their donation listed for two weeks instead of one night], and people that did not attend the event could still feel like they were helping our schools.” NPT