May/June 2004

Using the Internet and Email Boosts Auction Outcomes

by Greg McHale, Founder and Executive Vice President, cMarket

In the nonprofit world, auctions play a key role in helping organizations raise critical funds. But as organizers know, auctions are inherently limited in their outcomes. The number of participants in the room represents a subset of the nonprofit's constituency, and of these, only a fraction actually bid, diminishing the size of the bidding pool even further.

To generate stronger auction results, more nonprofit groups are turning to the Internet. Whether creating a stand-alone fundraiser or driving bids for a live event, nonprofits now can simply and easily create a home page and an online catalog for their auctions and use email to engage all of their constituents in the bidding process.

Equally important, online auctions allow nonprofits to prominently feature sponsors and donors on their auction Web sites and in emails to their constituencies. This promotional benefit helps an organization secure more sponsorships as well as more and better donations.

The Results Speak for Themselves
Integrating an online auction with a live auction delivers substantial benefits, as Miami Children's Hospital Foundation discovered. By signing up with cMarket, an online auction service, Miami Children's Hospital Foundation tripled revenues from its annual gala last November.

The foundation's fundraising staff used the online auction service to build an event home page and product catalog. cMarket also enabled the foundation to launch an aggressive email campaign that put the auction into recipients' email inboxes eight weeks before gala doors opened, driving up starting bids for the live event. As a result, Miami Children's Hospital Foundation saw higher and better bids from a greater number of participants than ever before. The foundation also noted that donated auction items were of better quality.

Additionally, online-only auctions are an attractive new revenue opportunity because they do not generate the overhead costs associated with hosting a live event. Consider cMarket client, the Cancer Community Center of South Portland, Maine. After creating its own online-only auction homepage and product catalog and then emailing its house file, the Center motivated its constituency to contribute $32,000 -- more than double the amount organizers believe they would have seen through a traditional fundraising event such as a raffle or a live or silent auction. Moreover, by holding an online auction, the Cancer Community Center secured more donated items and reached a broader audience than it would have through a traditional fundraiser, helping the organization expand its database of constituents.

Success Factors for Online Auctions
An online auction's success depends on several factors and well-executed activities. Here are a few tips for online auction success:

1. Cultivate email lists. Nonprofits interested in holding an online auction need to begin harvesting email addresses immediately to ensure they have enough online constituents for a successful event. Emails can be collected via Web site and home page registrations, newsletter subscriptions, and at live events and galas -- when constituents register for raffles, giveaways and door prizes. Corporate sponsors, donors and media partners may also provide organizations with access to their email lists.
   
   
2. Leverage sponsors, donors and media partners. Make sure that sponsors, donors and media partners understand the advantages that online auctions offer them, such as greater visibility and access to a nonprofit's constituency. This will make them more likely to share email lists and work closely with charities to promote an online auction. It also encourages better and more sponsorships and donations -- two vital components for an auction's success.
   
   
3. Follow a proven plan. In addition to planning the auction, nonprofit fundraisers need to develop a strategy for effectively communicating with constituents. Experienced online auction services can provide timelines, project planners and a library of best practices to help organizers easily navigate the entire process, step-by-step.
   
   
4. Use internal resources effectively. Hosted online auction services -- where the outsourced service hosts the software on its servers, and nonprofits access it through a Web browser -- simplify online auction maintenance, making it easy for volunteers and staff to update product catalogs, alter content or create email campaigns. This can save an organization valuable time and provide greater flexibility in distributing workloads.
   
   
5. Use the online auction site as a promotion tool. Nonprofits should capitalize on the online auction as an opportunity to educate site visitors about their organizations and drive attendance of their events.

Greg McHale is executive vice president of cMarket, an online auction service he founded in 2002 to help nonprofits capitalize on the Internet and email to enhance the outcomes of charity auctions. To learn more about how leveraging the Internet and email can boost auction revenues, contact convio@cmarket.com or call 617-252-6457.