A Complete Guide to Online Auctions for Nonprofits

“Let’s quit waiting, and put the silent auction online!” development director Letitia declared at the medical association’s July staff meeting.

Her office was full of silent auction prizes and her 2020 budget was full of holes. She knew she had to do something.

COVID-19 had forced her to cancel the association’s spring fundraiser. At first, Letitia thought she’d be able to relaunch the event in the late summer, but that wasn’t how things had progressed. She didn’t know when a live event would be possible, and meanwhile, she was facing a significant revenue shortfall.

She saw other organizations successfully hosting virtual silent auctions, so she knew they could raise money. What she didn’t know was how to do an online auction fundraiser herself.

Can you relate?

Many nonprofits find themselves in the same situation. Live events are off the table for now, but that doesn’t mean you can’t raise money. Online auctions are a great way to bring in revenue, build community, and keep nonprofits on track during 2020.

In this post, we’ll cover:

• How an online auction for a nonprofit works

• The pros and cons of online auctions

• Tips for making your virtual silent auction a hit

• What kind of software you’ll need, and how to choose it

How an Online Auction for a Nonprofit Works

Letitia knew how to run an in-person silent auction.

She solicited auction item donations, created bid sheets, and made eye-catching displays on the auction tables.

She had her checkout system perfected, and was an expert at featuring auction items during the live event program.

She used the same templates from year to year, and basically had the whole thing down to a science.

But in the age of COVID-19, fundraising has changed. Rather than focusing on her usual tactics, Letitia needed to find a fundraising option that would allow her to raise the same amount.

To keep things simple, she decided to look into an online silent auction instead.

She soon found that an online auction works a little differently.

Instead of a live venue, the auction would operate on a software platform.

She still needed items to auction off, but instead of a live display, she’d use photos and text descriptions to entice bidders.

But to her delight, she found that a lot of the tedious parts of running the auction were covered by the software — tracking bids, enforcing minimum increases, and managing bidder activity.

Online Auctions: Pros and Cons

Just like Letitia, at the moment, an online auction may be your only option due to COVID-19.

But there are advantages to going online, even when you have the option to do an in-person event, including:

• Less hassle: No hauling prizes to a venue, making displays, keeping track of bids yourself on paper, or worrying about check out or prizes getting left behind.
• Larger audience: An online auction isn’t limited to the people at your event. Supporters can bid from anywhere, at any time, giving you the opportunity to reach a much wider audience if you heavily promote your auction online.
• More options: A silent auction at an in-person event can only last as long as the event does. With an online auction, you can extend the bidding over a longer period if you want to. You can add new items, or stagger bidding to keep people interested.

Of course, no single mode of fundraising is perfect.

The main con for virtual fundraisers is that it can be hard to match the excitement and engagement that are built into live in-person events.

So, in order to fuel enthusiasm, you’ll have to be very deliberate about your promotion and engagement strategies. It’s not impossible — just something that you’ll have to remember if you decide to run one.

How to Run a Virtual Auction

Letitia started to plan her auction. She divided her activities into four categories:

1. The Set Up

This includes choosing software, planning the timeline, and organizing auction prizes.

Letitia already had prizes, so once she chose a bidding platform she was ready to start taking photos and adding descriptions of her items.

If you’re planning an online auction for your nonprofit from scratch, you’ll have to consider if you’ll run your auction as a standalone event, or as part of a larger virtual fundraiser. Both approaches have merit. You may find it more convenient to simply run the auction, or find it easier to build excitement around something that is more of an event.

Take a look at Sharp Again Naturally’s online “Memory Drive” for inspiration. They combine a 45-minute live virtual event with their silent auction. Attendees are invited to learn about their work, hear a success story, watch yoga and cooking demonstrations, and bid at the silent auction.

2. Promotion

In order to get the most out of your online auction, you’ll need to promote it across your channels. Letitia created:

• A segmented email campaign to appeal to different groups of supporters, including those that had tickets to the original event, association members, and donors.

• Social media graphics promoting the event

• A press release to local media

• An auction-specific landing page on the association website

• Promotional content for her regularly scheduled newsletter

Looking for inspiration? Here’s how Colorado River Headwaters Trout Unlimited explains and promotes their auction on their homepage.

3. Running the Auction

Whether your nonprofit’s online auction is part of a larger virtual event or runs over several days, you must stay in communication with your supporters.

If you’re having a virtual event, your emcee can stir up enthusiasm and interest, much like they’d do in person. They can show slides of the prizes and encourage bidding.

Without an accompanying event, you’ll need to post updates on your social media and send emails reminding people to bid. Your event software may include text or email messaging to bidders, letting them know if they’ve been outbid, another great way to keep them engaged with the auction.

Here’s how the Peterson Dumesnil House encouraged last-minute bids via social media:

4. Follow-up

When the virtual auction concludes, it’s time to announce winners and get the prizes to their new homes. Make sure your instructions for gift delivery or pick up are clear, so no one is wondering how or when they’ll get their prize.

Letitia decided to offer contactless pickup to locals, and to mail packages to winners too far away for that option.

You might also want to share all the winners publicly, like the Peterson Dumesnil House did, so that you get fewer questions about whether or not bidders won (and to encourage them to bid more next time!).

7 Tips to Make Your Online Auction Go Smoothly 

Letitia felt confident in her plan, and scheduled her nonprofit’s virtual silent auction. As she worked on it, she followed these best practices.

1. Make All Policies Clear

As you’re communicating about the auction, take the opportunity to clarify your policies. Is there a required increase for bidding? How will prizes be delivered? Do winners need to pay shipping, or will the organization? Spell it all out, and share it with participants.

2. Build Suspense

Showcase the prizes on your social media and other communication streams before bidding opens to create anticipation.

3. Don’t Overwhelm Yourself

Start with around 20 auction items. You can add more as you get comfortable with the software. You don’t want to overwhelm your bidders with infinite choice anyway.

4. Price Items Appropriately

Don’t start opening bids too high. Instead, aim for around 35% of market value — low enough to be enticing, but with plenty of room to bid up.

5. Use Good Photos

In an online auction, photos are your display. Make sure they’re clear and well-lit. Include more than one view of items, and try to give bidders the most complete look possible.

6. Add a Donation Option

Would your donors prefer to give you cash? Make it very easy for them! Most good auction software will have a donation option to offer bidders.

7. Extend the Auction

Unlike an in-person event, you can run your online auction over a period of days. This can give more people the chance to bid, and allow a longer window for bids to climb.

3 Great Online Auction Software Options

If you’re thinking about trying to run an online auction without a specialized software platform, stop right there.

With payment processing, bid tracking, and donor management, online auctions are simply too complicated for a DIY solution.

Fortunately, there is a range of platforms with different features and pricing available.

Here are a few popular platforms to get you started.

1. Bidding Owl

Bidding Owl offers custom auction websites, bidder text and email notifications, and lots of fundraising education and support.

2. Charity Auctions Today

Known for their easy setup, Charity Auctions Today offers six event features (attendee management, paddle raise, mobile bidding, online auction, cash donation, event tickets), but you can choose only what you need.

3. GiveSmart

GiveSmart has the usual mobile bidding features, including text outbid notifications. Auction item donors can also submit their items directly into the system, which automatically generates bid sheets.

Sold! On Online Silent Auctions

Even as she was planning and running her nonprofit online auction, Letitia had been secretly skeptical.

How much money would she really raise this way?

Over the three days of the auction, though, her concerns dissolved.

She saw bids from donors that were stalwart attendees at her annual spring event, along with donors who had never participated before. She even had several out-of-town bids!

When long-term donor Harriet came to pick up her items, Letitia asked her how she’d liked the auction. “I think it was great, but I really didn’t mean to spend quite so much on one item,” Harriet confided. “Every time I thought I was done, I got a text message that I’d been outbid, and I just couldn’t let it go! I had to win!”

The results were so good, Letitia is now considering doing an online auction again next year, regardless of whether in-person events are possible. And she’s very happy to have all those auction items out of her office, and into the happy hands of her organization’s devoted supporters.