Tuesday, February 1, 2011

Charity Auctions - Items Donated Versus Consignment

There are many choices when deciding what items to sell at a charity auction for silent and live items. Many auctions use items that are donated by volunteers and members of the nonprofit organization and hopefully, items are also donated from local businesses. However, some charities choose to offer high-valued consignment items to sell at their benefit auction. You should understand the positive and negative outcomes this may have.

These consignment companies supply large items such as a flight on a MiG jet or an African safari. It may seem like a much better item than can be obtained from donors. Usually, there are more negatives that outweigh the positives.

There will be a very high reserve amount that must be reached in order for the charity to cover the cost of the item. If the bidding does go high enough, the consignment company will generally keep about 80% of the money. For example, if a consigned item is sold for $1000, the for-profit consignment company receives $800 and only $200 goes to the charity. Besides the fact that your guest brought $1000 with the intention to give it to your charity and you only really received $200, the buyers may feel somewhat misled into thinking that all their money went to the nonprofit. Sometimes the term "donations" does not mean what your guests think it does.

With strictly donated items, the nonprofit can publicize that "100% of the proceeds go to the charity". Unfortunately, with consignment items, your promotional material may read, "a portion of the proceeds" go to the charity. Now which sounds better to you?

Kevin Rutter, president of Hot Auctioneering  http://hotauctioneering.com/


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