A silent auction is a highly optimized and classy way to raise funds for charity by non-profit organizations where the participants place bids on the items procured by you. Using either mobile bidding software or bidding sheets, bidders compete with one another to win their favorite items. When the time for the auction runs out, the winners are declared and you receive payment for the package.
The bidding sheet has about 10-15 columns and is kept before the items that are set out on tables and racks for display. No auctioneer is conducting the event. Guests move from table to table, inspect the items, and place their bids by writing the amounts in the rows. The highest bidder for each item is declared the winner. This can also be done with silent auction mobile software where the whole auction process is fully automated.
Silent auctions can be customized for all types of participants and are no less challenging than the usual live auctions. However, there is a difference in the environment of the two. While live auctions are stressful and bids have to be placed immediately to beat the auctioneer’s hammer, a silent auction is more laid-back and leisurely and participants take their time in placing their bids, though within the timeframe of the auction.
Even though a lot of supervision is not required for silent auctions, especially when using mobile software, a certain amount of planning is necessary as well as working out a careful strategy to maximize the revenue for your favorite charity.
Follow these guidelines if you are planning a silent auction.
Set Goals and Guidelines for your Silent Auction
Any fundraising event regardless of the format has to follow specific guidelines and have clear goals before it to be a success. The same holds for a silent auction.When your team knows the guidelines of the auction there will not be any divergence from the fixed goals. It also helps to course-correct if you have deviated from your goals or guidelines during the auction.
Silent Auction Guidelines
The main guidelines of your silent auctionwill be focused on the logistics of holding the auction based on which the strategy of the auction has to be designed.
Some of the Points to keep in mind here are:
- The date of the auction or the potential time range
- The scope and reach of the auction. Will it be a large event spread over several days and if so, the schedule?
- Fix a budget for the silent auction
- Fix a venue for the event if you do not plan to virtually hold an online silent auction
- The approximate number of participants that you want to register
- Finally, estimate the time that you will need to put in place all these aspects.
Along with framing the guidelines and setting targets before you, it is also necessary to simultaneously set the goals and what you want to achieve from the silent auction.
Silent Auction Goals
There are several goals to be formulated and you must have a clear idea in mind about what you want to achieve. These include:
- Targeting the all-important revenue goal
- Promoting the auction well to get new attendees apart from those already in your data bank from previous auctions.
- Contact a section of the past participants who you feel will be interested in the theme of the present silent auctionand the items you will be putting up.
- Meeting specific online engagement targets.
- Aiming for increased in-kind donations when you interact with people like merchants and sponsors during item procurement
- New corporate partnerships to better your revenue inflow.
While the main aim of the silent auction should be revenue generation, additional goals as mentioned will help you to create a well-rounded strategy that will help meet your primary objective.
Pricing your Silent Auction Items
You have to price the auction items right to optimize the revenue generation. Unfortunately, this is one area that fundraisers do not give a great deal of importance. The level at which you price the auction items will have a direct bearing on the success of the silent auction. Too high prices will reduce the number of bids while too low prices will not give good returns on your investment. The trick then is to maintain a delicate balance between the two.
This is how you go about it:
· Setting a fair market value (FMV) for every item is essential. Use the retail value of the items as a benchmark for travel packages and tangible items. For others such as unique experiences, make an educated guess about the perception of others about their value and mark the prices.
· Mention the FMV of each item on the label as a courtesy to the bidders since any amount paid over the FMV is tax-deductible.
· The starting bid of each item should be pegged at around 30-50 percent of the FMV. The aim is to reach the actual value through bidding.
· Fix the incremental value of the bids for each item at 10-15 percent of the FMV. Hence, there is scope for a healthy 4 rounds of bidding for items before the price reaches its actual value.
· To make the silent auction interesting, fix a “buy-it-now” option at 150-200% of the FMV for certain items.
Price your items as soon as you procure them to avoid any last-minute rush and hassles and not remembering later their actual price.
Follow these points to make your silent auction a great success.