When the economy took a nose-dive in 2008 it made fundraising an even greater challenge. In 2009, it was clear that message that was king. As donors began making choices between potential events, cutting back on the number of auctions they attended, it was the events that effectively communicated their message in advance of the auction succeeded.

Successful events in 2009 were able to empower an audience to make a difference in the world by attending their event. Highly effective messaging led to highly motivated crowds who came prepared to help change the world, one bid at a time. But any event that took its audience for granted last year suffered dire consequences.

2010 is barely underway and the spring fundraising auction season has yet to arrive, but it is obvious that  organizations are going to have to work harder than ever to create meaningful and profitable fundraising events. Message will be important this year, but it will no longer be enough just to get a solid message together and use it to bring potential donors to your event. Successful events will need to create and celebrate a community that comes together to make something positive happen in the world.

Schools have an advantage in this respect because they have a built-in community, and they make the easiest example upon which to draw. Parents have a deep-rooted belief in the value of their children’s school, and most understand how important the auction is to the school. Successful school auctions are a chance for the parent-body to come together, party, and make something good happen for the school. At successful school auctions the big bidders are celebrated and the fund a need is the emotional high-point of the evening.

If your event doesn’t have a built-in community it simply means that you have to work harder to create a community. Community can exist year-round, it can come together for one night or an extended event. We’ll drill down into more specifics on how to succesfully create community at an event in upcoming posts, but the grand overview is that you have to find a way to bring people together to help you.

You have to make your attendees feel that they are an important part of your “family”, no matter what size check they write that night (the power of the fund a need is its ability to turn a mass of small pledges into incredible change, after all). You have to make attendees want to come back and do it again every year, and hopefully bring more friends. They need to look forward to the event, the gathering of people it represents, and the difference it enables them to make in the world.

In other words, donors not only want to make a difference, they want to surround themselves with people who are committed to making that same difference - at least once a year.

At a recent planning meeting where we were discussing repeat auction lots for an event, it came out that one of the donors felt seriously slighted because their lot was never redeemed. A buyer had paid top-dollar for the lot at the auction, and had yet to cash it in with the expiration date looming. The donor felt slighted, and was inclined not to make the donation again.

According to our calculations, as many as 40% of all auction lots purchased at fundraising auctions go unredeemed. This isn’t a function of the desirability of the lots being offered at fundraising events, but a reflection of the nature of supporting causes through auction purchases. People who make a purchase at a fundraising auction do so first and foremost because they believe in the cause; the desirability of the lot simply justifies getting caught up in the heat of the moment and (hopefully) overpaying.

Buyers assume that 100% of the money is going to the organization putting on the auction: if they don’t redeem the lot they will have still made a good donation to the cause. Most buyers also support more than just one cause, and often have shoeboxes full of certificates they keep meaning to redeem. Buyers aren’t trying to slight donors, they simply lead busy lives and have scheduling conflicts.

It is understandable that some who donate lots to an auction most often do so because they really were looking forward to making their event happen. There are a lot of possible solutions, such as putting the donor in direct contact with the buyer to coordinate the event, but they are all fraught with potential for disaster.

The simple solutions is to assure donors that their donation is loved: by you and the people who bought it. Their donation helped raise significant amounts of money for a cause they believe in. If the buyers haven’t taken them up on their generosity yet, it is not a reflection of how wonderful their lot is. It’s just more proof that we all lead insanely busy lives, and sometimes making time to show up and buy the lot is a major accomplishment, let alone making the lot happen.

Reynolds & Buckley will be conducting a workshop entitled Fundraising Auctions in Hard Times on Tuesday, February 24th at the Volunteer Center of Sonoma County. Company founder and nationally recognized fundraising expert David Reynolds will be on hand to discuss the challenges facing anyone conducting a fundraising auction today, along with associates Greg Quiroga and Ed Gold.

This is the third year we’ve partnered with the Sonoma Volunteer Center to offer a workshop, and this workshop couldn’t come at a more relevant and important time. We will discuss emerging trends in fundraising auctions, share insights from the 50+ events we’ve done since the recession “officially” began last fall, and touch on the ever-important fundamentals:

• Laser beaming your message
• Donor development
• Bidder recruitment
• Audience empowerment

Then we’ll break up into roundtable discussion groups led by David, Greg and Ed to address the specific concerns of each organization’s event. Whether you are considering starting an auction or have a well-established event, you are certain to gain a wealth of tips and ideas.

Date: Tuesday, February 24
Time: 9:30 am – 12:00 pm
Place: Volunteer Center of Sonoma County, 153 Stony Circle, Suite 100, Santa Rosa, CA
Fee: $45 for members of the Volunteer Center of Sonoma; $65 for non-members
For: Executive directors, board members, development staff and other volunteers involved with fundraising auctions

Click here to register online for this Reynolds & Buckley workshop at the Sonoma Volunteer Center.

I feel compelled to note that all of the fees associated with this workshop cover costs for the Sonoma Volunteer Center and its programs.

Colleen and I have spent the last few days in the wine country.  We have had meetings in Napa, Mendocino and Sonoma.  It has given us a chance to talk to several vintners.  They are all complaining about wine sales generally but the bright spot is that direct sales and their wine club sales are as strong as ever. In fact several wineries reported that wine club members actually increased the size of their orders.

My interpretation of this is that in hard times, people value the relationships they have more than ever and are prepared to spend money to protect those they care about. If they are prepared to do that for wineries, how much greater is their commitment to a charity?

This should give non-profits a psychic boost.  All the time and effort you have invested into building relationships with your supporters will be returned, and then some.  Do not underestimate your supporters.

One of the events I had the privlege of working with last year was Web 2.0 Summit, put on by O’Reilly Media and techweb in the first week of November.  2008 marked the fifth Web 2.0 Summit, and the first time that they opted to do any sort of fundraising in conjunction with the conference.

The decision to hold an auction benefiting technology-related charities was made just a few months before the event. And while the connection between the conference and philanthropy seemed straight forward, no one was sure how it would fly with attendees–especially given the economic turmoil at that time.

We held an auction on the first night of the conference, at the end of a dinner which followed the keynote address. There were a number of logistical challenges: we had to move the entire crowd from one room to another between the entree and the dessert course; we started the auction immediately after a 45-minute onstage interview of Lance Armstrong; the number of lots was limited; and the fund a need was being split amongst all three charities.

When the dust settled, we’d raised over $75,000 on just eight lots and a fund a need. Not a record-setting auction but definitely life changing for any of the individuals served by those charities. And definitely a success given the lead-time we had to plan and implement the auction.

I was surprised in our follow-up meeting when I found out that they were debating whether or not to hold the auction again. Some said that the amount of time it took to plan and implement was simply too great. Others felt like it had been a success worth doing better. I had one simple question: other than staff time, what did the auction cost the conference? In other words, did attendees spend less money elsewhere at the conference because of their involvement in the auction?

Answer: no. Other than the planning and implementation, the auction cost the conference nothing. It cost Tim O’Reilly some money because of his personal support of the fund a need, but beyond that it didn’t affect the conference.

To which my response was hold that auction! Do it! Not because I want the work, but because it is incumbent upon them to continue to make the world a better place, now that they know they can.

There are many ways that Web 2.0 Summit, O’Reilly and techweb could get better mileage out of the auction and, in turn, make the staff time expenditure on their end more worth it. They could have had Al Gore present the check from the auction to the CEO of one of the charities at his speech on Friday. They could use video-blog updates to show how Web 2.0 Summit’s auction continues to impact people’s lives throughout the year. And while all of that is important, it’s not the point.

The potential of any given crowd of people has a finite lifespan: If you do not capitalize upon it at that very moment, it dissipates. Completely. The Web 2.0 Summit auction proved that they have a roomful of attendees who are capable of changing many lives, and readily willing to do so. If they forgo their auction in 2009, they effectively send all of that philanthropic potential away with no guarantee that anyone else will ever be able to make good use of it.

If the question you are wrestling with in 2009 is whether or not to hold your auction, answer me this: what lives does your event change, and who will change them if you don’t?

One of our consulting services most utilized by clients is helping put the live auction lots in order. We always strive to create a natural flow to a live auction that readily engages the audience and builds to the ultimate climax, the fund a need. Our ability to do this is based on our knowledge of the flow of auctions and an understanding of the value of the live auction lots themselves.

Value plays an important role in the flow of an auction and in the capacity to develop a structure and narrative that works. There are a few simple guidelines, such as don’t open or close with your most expensive lot, and don’t place the most expensive lots back to back. One of the greatest challenges in ordering an auction is determining where to place those “priceless” items, especially class projects for schools.

One school event we work with presents a particularly unique challenge: nearly half of the 45 lots in the live auction are school projects. When initially confronted with the challenge of ordering this auction, we asked Kelly, the event chair, to assign an arbitrary value of “A”, “B” or “C” to each project.

Kelly took the time to look at each and every project from many angles. She looked at what they had sold for last year. She looked at the bidding history of the parents who spent the most money. She utilized ticket sales to identify which classrooms would have the most or least parents in attendance the night of the event. Kelly even applied a little subjective evaluation, to determine if something had any special appeal beyond what “only a mother could love.”

Kelly’s valuation of her auction was invaluable for us, and the event. It also showed a level of knowledge and creativity that underscore a few key points any auction could benefit from:

• Know your audience, especially your highest bidders
• Utilize previous years’ results as a foundation to learn from
• Approach event planning with a creative eye
• Tackle each task within the larger focus of the goals of the event

In Kelly’s case, this knowledge, focus and creativity resulted in the highest-grossing live auction her school has had to-date, including a record-setting fund a need, in the midst of incredibly challening economic times. 2009 is going to call for extra hard work to just make the same as years past.

Odds are, your auction benefit from some simple ABC’s as well.

It is important to make the most of the money you have in the room at an event, but doing so is not always as straightforward as it might seem. Every event has a ceiling, a maximum dollar amount that is appropriate for any single bid or fund a need pledge.

This ceiling has as much to do with the biggest bidders in the room as the people who can’t afford to spend a dime. In fact, it has everything to do with the relationship between them. No big bidder wants to stand out too far from the rest of the crowd. No one wants to make a bid on a lot and hear someone in the back of the room gasp, “that’s three months’ rent!”

This is one of the reasons we recommend doing at least 10 lots before your fund a need. Not only do we need to successfully devalue money, we need to make people who are willing to spend the money heroes and not fools. It is also why we recommend working with donors to establish the lead donation for the fund a need. There is more strategy at work than simply starting at the highest point someone is willing to commit to.

Just because one donor is willing to give you $10,000 doesn’t mean it is appropriate to open your fund a need there, especially if the high water mark for any other auction item has been $4,000 or less. We had $10,000 lead donors in each of the fund-a-needs for the past two events I’ve done. One raised $70,000 and the other less than $30,000.

At the former event, $10,000 was a completely sensible place to start the fund a need. We’d opened at $10,000 last year, and items have historically sold for close to that amount. When we opened the fund a need and started collecting pledges, three people raised their paddles: the same three people who had been bidding each other up on some of the big lots all night long.

The other event, however, was a different story, and a reminder of why bigger, higher, more is not always the best motto for fundraising. The ceiling in that room was around $4,000 - it was a highly corporate event with a few committed board members comprising the majority of the bidders. One exceptionally committed board member told me that he wanted to open the fund a need at $10,000 and get everyone else to come along with him.

He came up onstage during the ask, and challenged the crowd to match him at $10,000. Crickets. Nothing but the sound of crickets in a roomful of silent paddles. He quickly dropped to $5,000 then $1,000, put up another $10,000 of his own money, and threatened to pick people up and shake the money out of their pockets. All told, we made an additional $17,000 in the fund a need, on top of his $20,000. He showed great passion, but we did not make the most of his money.

If we had been able to work with him during the planning process and come up with a strategy, we could have given ourselves a better chance of getting more participation from other bidders.  For example, if we used his money as a challenge grant at the $1,000 level, we could have pushed for more participation from the crowd as a whole. There was no-one else in that room with $10,000 to spare, and they all knew it.

We could have then opened at a level commiserate with the expectations of the room, and not blown everyone out of the water. He could have been the hero for making such a grand commitment, and the rest of the crowd could have been made into heroes as well for rising to his challenge. As it was, he seemed pushy and everyone else felt inadequate.

Asking for money is hard. Asking for it at the appropriate level, firing up the room and getting everyone to join together to make something positive happen is a minor miracle. A miracle that requires months of planning, clear communication with donors, and an intimate understanding of the capacity of your crowd.

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.