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Many auction businesses find themselves benefitting during the rocky economic ride we’re experiencing. And some are finding ways to use their expertise to make a positive impact in the nonprofit sector.

It’s no secret that nonprofits have taken a hit from COVID-19. As many as a third are struggling to stay afloat. At the same time, there has been increased giving via lesser-known methods. For example, according to a BNY Mellon study, Charitable Annuities have risen by 21% during the pandemic. The average gift amount has increased by 56%.

Giving is still a thing.

Americans gave $450 billion in 2019. Fidelity Charitable conducted a study recently to gauge the impact of COVID-19 on giving. They found that 25% of donors plan to increase their donations and 54% plan to maintain their current giving levels.

Is your charity a fit for an online nonprofit auction?

If you’re running a nonprofit and feel reluctant about online auctions, you may be missing out. Here are some factors that may be playing to your favor:

  • Have you done charity auctions in the past? If so, you already understand the framework and this will serve you well as you set up online auctions.
  • Do you have a strong network of donors and partners in place? These folks may be more likely to donate hard goods and even receive a tax benefit as well.
  • Do you have relationships with corporate donors? They also may benefit by contributing their services or products for bidding while simultaneously helping their communities.

Like many, Steven Bornfreund, Co-Owner of Memorabilia for Charities, faced serious problems when COVID-19 hit. His nonprofit memorabilia auction business relied on doing business in person. But it came to a standstill when he was forced to close because of lockdown limitations.

Bornfreund wrestled with the question of whether an online auction model would be financially feasible. He also wondered how long it would take to set up an online auction platform. Would his supporters even see the value of doing business online?

He quickly learned that for many supporters, the online model was the only means they had for raising donations, and the setup was fairly quick – less than a week.

However, there were some unforeseen challenges:

As Bornfreund puts it, “We did have to get tighter controls over our online versus onsite inventory, but that turned out to be a net benefit. Having better inventory controls in place helps us with cost control and forecasting sales.”

As for the financial piece, Bornfreund says “We needed a fixed, affordable monthly rate, with no hidden or fluctuating charges. We got that with Maxanet.” They were able to lower their fees by combining their software and payment processing.

Is your online auction business booming?

If you run an auction business that is experiencing positive cashflow during COVID-19, this may be your opportunity to give back to a nonprofit that may not be faring as well.

Fred Durnbaugh is the Administrator for FR Liquidation Auctions in Arlington, TX. Recently he used his platform and expertise to facilitate an auction for the nonprofit, Wounded Heroes of Texas. Fred has great respect for Military Veterans, and this was such a positive experience, that he chose to forego any sales commissions. A local big box home supply company even contributed product to this successful auction.

In Durnbaugh’s words: “It’s such a great feeling to be able to use our platform to support the Veteran’s community.”

If you have auction software in place, consider using it to help out our friends in the nonprofit community. Another side benefit of being online is that customers typically make their purchases with a credit card rather than cash or check. Credit card transactions are easier to track and record for tax purposes.

If you have a nonprofit but don’t have auction software, why not allow us to help you think through the possibilities for taking your nonprofit online? We’ve been having these conversations with for-profit and nonprofit organizations since 1999 and would be happy to help you help others.

P.S. Here’s one more feel-good auction/nonprofit story: In September of 1904, Picasso created the etching below titled, The Frugal Meal, which depicts a young couple in Paris during a time when many suffered from hunger. In September of 2020, the painting was sold in a Christie’s online auction for $198K. Christie’s donated half their commission to Feeding America, and the owner donated 10% of the proceeds to Second Harvest Food Bank in Orange Country, California. Considering that Picasso himself likely experienced hunger during this difficult time, makes this a classic starving artist story with a happy ending.

Pablo Picasso's The Frugal Meal

Pablo Picasso’s “Le Repas Frugal” translated to “The Frugal Meal,” 1904 (Christie’s Images Limited 2020)

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