Tips for Fundraising with Silent Auctions

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Silent auctions are a popular fundraising strategy for good reason. By introducing a competitive element to giving, donors feel an extra incentive to keep bidding higher. They also give the nonprofit a chance to connect with its community by asking local businesses, artists, and others to contribute items to sell. Here are a few simple tips for ensuring that your organization’s silent auction is a success.

Stay organized.

A silent auction runs well only if it has clearly defined rules, both for the donors doing the bidding and for the volunteers and staff who manage it. Staying organized probably means having a few things in place:

  • A written plan for how the auction will be run, what sort of payment will be accepted, procedures for non-paying bids, and so forth.
  • A detailed inventory of the items to be sold.
  • Staffing to process the bids as soon as possible after the event, so winners can be notified and hopefully go home with their prizes.

Double check compliance.

Some jurisdictions place simple but important limits on fundraising activities. Compliance with these rules is much cheaper than a fine. Check to confirm that local laws do not require a license for running an auction. Also verify that no items that will be sold raise legal questions. While a free meal at a local restaurant or a basket of picnic snacks may not be a problem, alcohol or tobacco products may raise specific compliance requirements.

Use a bit of legalese.

A few words on the bid sheets about the obligations of bidders and the organization can go a long way toward avoiding confusion and arguments once the bidding is over. Each bid sheet should explain that all bids are final and the winning bidder promises to pay within a certain amount of time. The organization may want to provide fair market values of auctioned items to allow winning bidders the opportunity to claim a deduction for amounts that exceed them, but be mindful of explaining just how accurate the fair market value calculation is before providing it.

The Church Law Center of California helps religious and secular nonprofits stay on top of their legal and governance obligations. If your organization has concerns about its fundraising compliance obligations, or would like help crafting a good fundraising policy, we are happy to help. Call us today at (949) 892-1221 or reach out through our contact page.

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