Welcome to the inaugural edition of Fundraising University! Today, we're tackling a pervasive myth in the realm of charity auctions: the necessity of listing retail values for auction items. Let's dive in and debunk this misconception once and for all.
In our quest to demystify charity fundraising practices, we consulted with our trusted Accountants, who diligently researched prevalent myths. One myth stood out prominently: the notion that listing retail values on auction items is essential. This belief, while widespread, is not rooted in reality.
Citing IRS Code 561, it's crucial to clarify that charitable donors are only entitled to claim the retail value, not the selling price, on their annual taxes. However, over time, this guideline has been misinterpreted, leading to the misconception that charities must disclose retail values to potential bidders.
With over 17 years of professional fundraising experience under our belts, we've witnessed countless instances where items with "known retail values" failed to meet expectations. Consider a recent Silent Auction scenario featuring two enticing items:
"Unique Experiences for Auction": A $1,000 Gift Certificate for a private jet experience.
"High-End Collectibles for Auction": A $500 Gift Certificate for a renowned cowboy boot company.
Despite their perceived retail values, the auction outcomes were surprising:
The private jet experience sold for $220.
The cowboy boot company certificate fetched only $200.
These results are not anomalies; they're a recurring pattern. Despite our best efforts to advise charities against listing retail values, many still do so, unaware of the unintended consequences.
So, what's the winning strategy for charity auctions? It starts with setting realistic starting bids or "Reserve Bids" and defining bidding increments. Moreover, organizations should curate auction items strategically, focusing on offerings that ignite excitement and evoke a "Fear Of Missing Out" (FOMO) among potential bidders.
Embrace items that offer exclusivity and allure, such as:
Celebrity Memorabilia for Auction
Luxury Items for Auction
Entertainment Packages for Auction
Travel Packages for Auction
Artwork for Auction
Home and Lifestyle Items for Auction
Remember, the key to success lies in understanding your audience and selecting items that resonate with their interests and aspirations. Dispel the myth that guests will bid based on retail values alone; instead, focus on creating memorable experiences that inspire generosity and support your organization's mission.
In conclusion, let's rewrite the narrative of charity auctions by prioritizing impact over perceived value. Together, we can elevate fundraising efforts and make a lasting difference in our communities. Stay tuned for more insights and strategies from Fundraising University!
