Friday, April 24, 2020

Fundraising Myth Exposed: Using consignment items are bad and will hurt your fundraising efforts


There are many myths surrounding charity fundraising which originate back to the 1980’s or possibly earlier.  However, here is just one of the myths both described and the truth exposed:

MYTH:  Using items which you have to pay for is a bad idea and fundraising business practice.

#1 – Charities keep 100% of the profit from fully donated items.

#2 – Fundraising items that have a price or are consigned, draw bids away from donated items.

#3 – Charity guests prefer to bid on donated items vs. consigned items.

To properly address this myth, we first have to address the costs which charities easily incur during the planning of their fundraising events which are not donated.  By understanding and agreeing that this is true, it will truly show you how “opposite thinking” it is when it comes to the use of the items which actually raise the funds needed.

When planning a Gala or other fundraising event, the very first expense you incur is the rental of the venue along with catering and drinks which comes at an expense.  However, guests pay for tickets which in turn pays these expenses.  Keep in mind, that there is always “Margin/Profit” placed on each ticket price.  Then there is printing of tickets, programs etc.  Then entertainment, both bands and DJ’s charge for their services.  Add in decorations – all these line items come at a cost.  Rarely will you find any of this donated, especially the venue of your event.  The only item in the above list that creates profit is the actual tickets that sell.

With that in mind, after making these decisions, this is where charities turn off their thinking and this is when the myth kicks in that donated items are the best method to raise money.  However, they incurred costs easily as described above. 

Here is the “Reality of Donated Items”:

#1 – With over 1.5 million charities in the United States, businesses are bombarded with donation requests.  They can not possibly donate to everyone and if they do, routinely it’s something that is not selling in their stores.

#2 – Remember, you are hosting a local event with items donated by local businesses with your guests also living locally.  If your guests wanted those items, they would have gone and bought them themselves.

#3 – Our guests don’t spend or bid that high on the items we have.

#4 – Donated items are only bringing 1/8th to 1/2 of their retail value at the very most across the United States in any Silent or Live Auction (study performed by BW Unlimited LLC. over a 3 year period). 

#5 – Donated items do not have a high appeal and routinely have no theme. 

#6 – Everyone is looking for a deal – Common donated items are Gift Certificates and Gift Baskets. 

a.     If someone reports that Gift Certificates are selling at full retail or above, they are lying or have not looked.  QUESTION:  Have you ever bought yourself a Gift Certificate?  No, that is why they are called “Gift” certificates – we give them away to someone else as a gift.  Routinely, these sell for 1/4 of their retail value.

b.     How many “Gift Baskets” did you give away to your family or friends for the Holidays?  None.  The reason is, no one truly wants them.   Again, routinely these sell for 1/4 of their perceived value.

#7 – Charities commonly utilize the same donated items year after year such as someone’s Vacation Home.  However, they fail to understand (2) most important derogatory aspects about this:

a.     People know they can go directly to the donor and get the Vacation Rental either for free or at a very reduced rate.

b.     Each year these items are auctioned, the appeal and audience goes down and down.

#8 – If an item that is donated has a significant cost and it sells for 1/4 of it’s retail and the donor either is a guest at your event or hears about the low selling price, do you think it will have a negative impact on them donating again?  Yes.

#9 – Are the items actually free?  Considering the time it took to get someone to donate an item, the time it took and the cost of the gas that it took to drive there and back.  Then the item sells for 1/4 of the retail – ask yourself, was it worth it?

The argument against using consigned items normally is based on charities not being fully educated on the importance or how to properly use them to ensure they are highly successful. 

(Only with BW Unlimited Charity Fundraising, we advise our clients to increase the cost of our items by 20% so that on the very first bid, they are profiting – guaranteed.)

Here is the how and why this myth is dispelled:

#1 – Consigned items such as autographed memorabilia, vacation packages, jewelry etc. are very enticing and will set your event apart from all other local events.  If the items available are advertised on Social Media, they will draw many more eyes and possible guest attention.

#2 – Consigned Items that have high minimum bids will actually raise the bids on donated items.

#3 – Guests will not bid high on low value items if that is all that is there to bid on, however, they will bid extremely high on items which they have never seen before or are only available through BW Unlimited Charity Fundraising or another company.

#4 – Guests routinely place extremely high bids and get into bidding wars over consigned items which can also be sold multiple times – guaranteeing the charity much more profit.

#5 – Consigned items do not cost the Charity anything, the buyer pays for the items, not the charity.  The charity just keeps 100% of the profit.  If the items do not sell, they go back to the provider without a fee of any type.  This is exactly like the venue and ticket prices – however, the profit is not fixed as it is with ticket prices.

#7 – Charities can have the items “Sponsored” or “Underwritten.” 

a.     Charities can select as many items as they would like to utilize and put them in a catalog format along with the cost of each item. 

b.     Many more people and businesses can sponsor at a lower rate than at the normal high-level sponsorships. 

c.      If “ABC Realty” sponsors an item for $250.00, they pay the charity for the sponsorship and a “Tent Card” is simply placed in front of the item saying “Sponsored by ABC Realty.” 

d.     The bid is started 20% above the cost – as an example, the winning bid is $500.00 – The charity just profited $500.00 because the sponsor actually paid for the item.

e.     If the sponsored item does NOT receive a bid, the item is returned and the charity keeps the $250.00 sponsorship.

In summary, I have a question:  What is the difference between paying for the venue, the food and drinks – OR – having high quality items that have a cost?  Shouldn’t you have great items for people to bid on instead of free items?

In closing, if someone is against the use of consignment items from either BW Unlimited Charity Fundraising or some other provider, educate them on the above.  Just ask our 1,000’s of clients across the United States if what I say above is not true.  If you have used consignment items and were unsuccessful, it’s possible you did not use them correctly.

If you would like more information on how to be successful using consigned items or would like to comment differently, please contact us at www.BWUnlimited.com, we would love to help you. 

BW Unlimited Charity Fundraising is a North American Charity Fundraising leader in a convenient “One Stop Shop” setting.  We provide a host of consignment auction items such as 100% authentic autographed memorabilia, worldwide vacation packages, beautiful jewelry and incredible décor.  We also assist our charity clients with a host of charity fundraising event services.   Please contact us to learn more.


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