Every event walks the tightrope between good party and successful fundraiser. If you don’t throw a fun party, no-one will want to come back next year. And if you don’t raise enough money to support the cause and justify the party, it isn’t worth doing next year.

A truly successful event has a unified vision from beginning to end that makes it fun to raise money for a cause the crowd is pre-disposed towards passionately supporting. Attendees should be invited to support a fundraising event that will be fun, not invited to a party and hit upside the head with an unexpected call for cash.

Everyone on your team’s vision of success should include maximizing the philanthropic potential of your attendees. There are always compromises, and I’m not suggesting that every event should have the same length auction start at the same time and feature the same lots. But I am wishing that event planners and event management companies would get on board with making auctions successful, and think about some of their decisions from an auctioneer’s perspective.

Case in point: at an event I did two weeks ago, the event planner put together a stunning room. Monarch butterflies were the main thematic element, and they were everywhere; projected on the ceiling, sitting on each place-setting’s napkin, and covering the three-foot high metal “tree” centerpieces at each table. From the standpoint of an event designer, it was gorgeous.

Guests at each table could readily see their mates across from them without the centerpiece blocking their view. And when you looked around you saw a forest of butterfly-covered trees. And that was the problem.

From the back of the room you couldn’t see the video screens through all of the trees, rendering the much worked-on video about the organization and its great work invisible to all but a few up front tables.

And when I was on stage, I was probably more voice than visible presence as well. Meaning guests couldn’t see me, and I couldn’t see them, or their paddles. I am most effective when I can look a bidder in the eyes and ask them to spend more money. That night, I was happy just to figure out where the bidders were. Establishing any sort of intimacy died on the branches of fifty-something Monarch encrusted trees.

I know the event planner and his team very well. I’m already carefully wording my follow-up conversation with them. Seeing as how this isn’t the first time they’ve done something like this at an event I was working on, I want to at least get them to acknowledge I have a perspective, if not see things from it now and again.

This shift in the economy really began impacting events as far back as March of this year. That’s when we started seeing bidders start to become increasingly hesitant. It’s also when we discovered that many events were having a harder time obtaining donations.

When it suddenly becomes harder to obtain lots for your live auction you have two choices: put on an auction with fewer or less valuable lots, or start buying auction lots. We always recommend relying upon donations, not only because they cost you nothing, but the acquisition of donations is an important exercise. We also understand that there are times when you simply need to bolster your auction and have no other options.

In this situation, we recommend a simple formula: for every $1 you spend, you should be able to earn $3 at auction. Otherwise, you are simply taking money away from your cause and giving it to a retailer or -worse yet- the new breed of charity auction lot middlemen who’ve popped up everywhere.

Your attendees and supporters are happy to give you money because they believe it is going directly to your cause. They understand the need to cover costs to put on an auction, and will forgive you for some strategic spending that helps you make far more than you would have otherwise. Don’t betray that trust by spending $3,000 on an auction lot that only nets you $600, as happened to a client recently.

There are lots of potential auction lots that seem attractive on first blush. Your first question should be, “Can I triple my money with this investment?” If the answer is yes, do it to fill gaps in your auction, but don’t let bought lots become your foundation.

If a lot is expensive, ask yourself if you could put a variation of the package together for less. No-one owns the copyright on a package, and you have every right to put a similar package together for less. The brokers who offer “no-risk” packages for charity auctions often overcharge, which becomes readily apparent once you start pricing out the components on your own.

Whatever you do, don’t waste money on airfare. The people you are targeting as major supporters have their own miles, travel agents, and favorite airlines. Round trip coach seats won’t bolster the value significantly in their minds.

Before you spend money on a whole new package, ask yourself if there are other packages in your auction that you could make better with a smaller investment. If, for example, you have phenomenal tours and tastings up in Napa or Sonoma but don’t have a place to stay, it would be worthwhile to try and acquire a hotel for a couple of nights. Many upscale hotels that are unwilling to donate outright are willing to offer significant discounts for purchased stays.

Museum passes for a trip to Paris, rounds of golf to accompany a stay at Pinehurst, or having an event’s invitation engraved on a large format bottle of wine are all examples of purchases we’ve seen surpass the 3 to 1 rule.

Don’t let purchasing your lots become the rule instead of the exception. Once you stop asking your board, committee and volunteers for help obtaining lots you start losing out on necessary relationship building for your organization and marketing for your event. The same relationship building and marketing that brings new bidders into the fold.

Attendees of your fundraising event need to know the difference their participation will help you make in people’s lives. There needs to be no question about the need, and how they can help you fulfill it; down to the level of the lowest fund a need pledge.

Bidders need to know that they can help, that their money is going to effect meaningful change. It is all about laser-beaming message, and in this case it is about quantifying needs at appropriate levels. Large, national charities face the perceptual challenge of massive national budgets. The reality may be that the Silicon Valley American Heart Association or Bay Area Red Cross serve the local community and are responsible for their own annual budgets, but it doesn’t always appear that way.

One Silicon Valley executive who was debating a $10,000 pledge at an event summed it up best, “I want to know how much my money is going to move the needle.” $10,000 is no paltry sum. I’m betting anyone reading this could change a lot of lives with $10,000. But measured against the multi-million dollar annual budget of heart research nationwide, it barely makes the needle shiver.

The challenge is to define the goals for your audience clearly, and communicate them effectively:

• State what your fundraising auction helps your organization accomplish.
• Equally importantly, state what won’t happen if people don’t show up and spend.
• Quantify your needs, and map them to pledge levels of your fund a need. For example: $5,000 will provide one bed for a hospice; or $250 will give four women free breast cancer screenings.
• Publish those needs, preferably in your auction catalog, and preferably in a way that people will actually read them. Just remember that a laundry list is bad, but pull quotes at the bottom of each page, Reader’s Digest-style, catch people’s eyes.
• Pick up the phone and start having conversations with your biggest supporters. Now. Be honest with them, and respect their honesty in return. It is better to know where you stand going into an event, than merely hope that people are going to give you money.

The most successful events right now are being carried by individuals. It is always a minority of people who carry the day for fundraising auctions, and in this economy even more weight is falling on their shoulders. Let them know how much their support means to the people you serve, let them know how many lives will be changed with their bids at your auction. Let them know how they can move the needle, and they’ll find a way to make it jump.

This is from today’s Wall St. Journal:

“According to a new survey from American Express Publishing and the Harrison Group, nearly half of respondents with incomes of $250,000 or more agreed with the statement that “I worry that at some point I could run out of money.” That’s up from about a third in April.

Fully 69% agreed with the statement that “The recent real estate and banking crisis has affected my sense of financial security.”

Of course, $250,000 is only “Obama wealthy.” And running out of money “at some point” is a long time horizon. Yet the survey suggests that even high-income earners are cutting back their spending for fear of what the financial future might bring. Fully two-thirds say that they are “looking closely at every spending category to see where I can save.””

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This is the group that I mentioned that used to be a reliable participant at auctions but is now far more cautious. We need to re-engage. It all goes back to “Laser-beaming the message”.

There are few things that can have as large an impact on a fundraising auction as the sound system. If attendees can’t hear the auction, they won’t bid. And if all they can hear is the auction, and they can’t talk at their tables without yelling, odds are they won’t come back next year.

The challenge is to set up a sound system that accomplishes the goal of creating an environment where everyone can tune in to the auction at any point…and party at their tables the rest of the time. It is an effect, really - auction surround sound - and it takes a professional sound company to accomplish it. There are many companies who understand the special needs of a fundraising auction; our longtime favorite in the bay area is Sound Expressions in Santa Rosa. They not only set up great sound systems, they engineer them throughout the event as well.

There is a massive ebb and flow to the noise level in the room during a fundraising event. A good sound engineer will be able to react to changes in ambient noise level and alter the sound as necessary. A great sound engineer will be able to see them coming, and proactively adjust levels.

Audiences are increasingly getting louder. Ever since the economy took a severe downturn this fall, people who don’t have the money to spend seem to be looking for any opportunity to party harder and louder. Watch the following video from an auction on September 6th to get an idea of just how loud a crowd can be. The lot sold in the video is the most expensive lot of the night, and it should have generated the most momentum within the crowd. As it is, you can barely hear the people who are into the event above those who are just there to party.

That was with the best AV company I know at the helm, manning the sound board during the auction. It is hard to imagine what that event would have been like without a professional on the boards throughout the auction.

Another recent event, however, opted to save a few bucks and go with a sound company that underbid by submitting a good looking list of equipment on paper that did not include a technician to run the show. The event took place outside, started during daylight hours then progressed into evening, and required PC and DVD video signals across four monitors. A tricky setup under any circumstances, but compounded by the fact that the technician left as soon as he had set up the system and sound-checked.

Two minutes into the video presentation something went wrong in the system, sending a horrible noise throughout the speaker system. The technician was 30 minutes away, leaving a bunch of volunteers to trouble-shoot and try to get the event moving back on schedule. After 10 minutes of frantic action, we got the crowd’s attention, re-started the video and got rolling with the auction. Thankfully, the passion of the crowd was more present than the sound tech, and the event was still a solid success.

But it raises a few key points:

• Hire a good sound company
• Get in writing that they will have sound engineers on-site throughout the evening
• Designate a point person for the night of the evening to be the main contact with the sound company

When in doubt ask yourself if saving a few hundred bucks is going to be worth the potential for catastrophic failure. If your sound system fails you, odds are your audience will forgive you, but will you and your auctioneer be able to find a way to quiet them down and keep them engaged? And with things the way they are, is that the place you really want to gamble?

The economy has everyone spooked. House prices are down, foreclosures are up. 401(k)s are down, unemployment is up. The dollar is down, gas prices are up.

How bad is it? There is an old adage; if I read about people losing their jobs and houses, it is an economic downturn. If my friends are losing their jobs and houses, it is a recession. If I lose my job or house it is a depression.

The first task that any not-for-profit wondering about the effect of the economy on their fundraising auction is to analyze where, in the continuum listed above, their audience lies.

We had one event that was canceled this year. It was an auction that is normally held during the mortgage banker convention in San Francisco. Obviously this year would have been a real challenge not worth the risk of underwriting the event.

To date most auctions seem to have held up extremely well. They have changed, but the returns have remained reasonably constant. One warning; in trying to pinpoint trends between 2007 and 2008 we are more dependent on anecdotal evidence than statistical certainty. In determining why an auction is either up or down over the previous year, it is hard to say whether it is the effect of the economy or else the vagaries of different lots or the presence or absence of a particular bidder.

With the above caveat, these are the changes in auctions that we have noted during the last year.

1. On average the amount raised at auctions has remained the same. The variance, both up and down, is within 15%. In most cases the difference between the amount raised in 2007 and 2008, whether higher or lower, can be pinpointed to either specific lots or individuals.
2. There has been a decrease in the number of “super bidders”.
3. Thankfully this decline in the super bidder has seen a corresponding increase in the number of “high bidders”. In most cases the increase in the number of high bidders has more than compensated for the decrease in super bidders.
4. Ticket sales have been down this year.
5. Bidding has been slower. Even though an item may sell for as much as it has in previous years, it has taken longer to get there. In particular there have been fewer bidders at the early stages of each lot. The fewer the bidders the more control devolves to the audience.
6. Audiences are louder.
7. There have been fewer moments of “irrational philanthropy”. As fundraising auctioneers we live for those moments. When the bidding for an item goes so far over the top that the entire room gets excited and realizes that the bidders are simply involved in a philanthropic gesture, this excitement carries over and takes the next few lots to a higher level.

Several factors combine to explain these trends. While the wealthy is still wealthy, they are more concerned about appearing inappropriate or irresponsible in their bidding.

As noted in an article in the Wall Street Journal an attendee at the Naples wine auction commented to a friend that it seemed almost callous to spend thousands of dollars on a bottle of wine even while assuring their friend that he could still afford to do so.

A crowd that was able to spend money at fundraising auctions were high earners who, while a very well-to-do, have most of their assets in their homes, 401(k)s and retirement portfolios. Their income has remained the same, but their net worth has taken a significant hit. I suspect that this group will hold back on their donations until their portfolios have returned to previous levels.

It is the reduced participation of this latter group that, I believe, explains the reduced ticket sales, slowing down of the auction process and the rise of the ambient noise level in the room. If you were a previous bidder at an event but have decided to be cautious this year, one choice is simply not to attend. Hence slower ticket sales. If you do attend but do not intend to bid, the alternative form of entertainment is to turn the auction into a party, raising the noise level. Finally, fewer bidders in the room slows down the bidding process.

How should not for-profits react to this new situation? My first recommendation is not to overreact. Nobody knows what the situation will be in six months or a year. Let us hope that the economy will have turned around and stabilized by then. Our observations lead to a few specific suggestions.

• If ticket sales are a challenge then this is not the year to raise prices. When negotiating with a venue anticipate the possibility of a smaller crowd. The return on silent auctions is a function of the number of attendees and a smaller crowd requires fewer lots.
• If each lot in the live auction is going to take longer than in previous years, you may need to reduce the number of lots.
• The data also suggests putting less emphasis on super high-end lots and cutting back on the lower end, concentrating your main efforts on mid range items.
• I suspect bidders will be more value conscious. Make sure you do your research. Wherever possible you need to find out the real cost/value of all lots. It doesn’t matter what a lot of sold for in previous years. If it sells for above its true retail value you are doing very well. When times are good the audience will let you get away with padding the values. I believe that it’s less true today.
• Anticipate the greater noise level. This is not the year to save on the sound system. You are going to need to focus on your message to overcome bidder reticence. If the audience cannot hear clearly it provides some with the excuse to tune out.

I have been working in fundraising, specifically fundraising auctions, for the last quarter century. In that time we have come through three or four recessions, the savings and loan scandal, wars both major and minor and, of course, 9/11. We will get through this crisis, though it will be a challenge for all of us in the fundraising business.

One advantage we have over times past is the opportunity to bounce ideas off each other, which is why we have started this blog in the hope that many of you will participate.