Donated items vs. Consigned Items: Myth or Fact

As with anything, there are myths that are passed down from year to year, from person to person that inadvertently can turn into a “Tall Tale.”  But in the charity world, these myths are like walking through the woods and following a wrong path toward the edge of a cliff.  However, even though there may be people along the way telling them to turn around, they believe the path they are on is the right way regardless of the facts.

What myth am I referring too?  The myth that donated items are far better than utilizing consignment items.  I too believed that a very long time ago until I opened my eyes and saw the reality based solidly on the facts.

I began my fundraising career as a volunteer assisting several outdoor charities which send out catalogs of items to their respective chapters around the world.  These catalogs are full of incredible items which in the end, the chapter has to pay for.  Uneducated, I thought that if I could get items fully donated, that would raise much much more money because, inevitably, we had to pay for those items.  Boy was I wrong. 

Now understand, I was the “King of Donations.”  Now, looking back, I realize that the hundreds of donated items I was able to get, truly didn’t have any theme nor were they exciting.  When we used the donations, they would do horrible up against or compared to the items which we had to pay for.  I was a volunteer and thinking “How could this be true?”  But the fact is, the charities knew it and understood they needed high quality items for people to bid on. 

If you don’t believe me, go to the website that charities report directly to in order to be rated – www.CharityNavigator.com and see for yourself how successful the above is for them.  These charities were the first and only to adopt a program which their fundraising chapters were to “BUY” items to auction.  Here are their numbers:

Ducks Unlimited - Net Revenue:  $233,638,780.00

Rocky Mountain Elk Foundation - Net Revenue:  $84,644,739.00

National Wild Turkey Federation - Net Revenue:  $23,122,179.00

 

I met personally met with one of the largest charities which the world is very familiar with (who shall remain nameless) and their Director of Development said “George, we don’t want our chapters getting donations because it’s nothing but junk.”  Now, if they understand this fact, why doesn’t the rest of the charity world grasp it?  The answer is:  Education.  Furthermore, there are people who work in the charity industry (not the charities themselves) who fight against using consignment items.

If you notice, I’ve said “Consignment Items” unlike the charities above who force their chapters to buy items, our items are “Consigned” which means if the charity does not profit, the items DO NOT SELL. 

I’m going to tell you the reality of donated items but you have to be open enough to read and understand this.  Here are the facts:

#1 – Charities rarely look back to see or analyze what the donated items sold for.  If they did, they would be shocked.

#2 – Charities routinely use the same donated items year after year with the audience for that or those items dropping each year.  As an example, each year someone may donate the use of their vacation home.  However, many of the guests know they can go directly to that person and get it cheaper or Free.  Even if it’s auctioned off year after year, the audience for it drops drastically.

#3 – Charities do not comprehend the fact that IF the item does not sell high or sell at all, how that will hurt the donating businesses reputation.  I have seen this for myself, an item that was worth $1,200.00 sold for $40.00.  The donor was so upset, he stood up and yelled that it would have been better for him to write a check.

#4 – Across North America, donated items are only selling for 1/8^th to 1/4 of their retail value in any Silent or Live Auction.

#5 – Donated Items come from local businesses, donating to local people attending a local event – if the guests of that event wanted the item or items, they would go them themselves.

#6 – Common donated items at charity events are Gift Certificates and Gift Baskets

which is also commonly advertised by fundraising companies as a means to say “Look, I’m trying to help you by giving you ideas” however, the truth is – everyone is looking for a deal.  No one EVER buys themselves a gift certificate to a restaurant, it doesn’t make sense.  Why would you buy a $50.00 Gift Certificate for yourself when you can just go there anytime and spend $50.00 on a meal.  In regard to Gift Baskets, these are overwhelmingly the most common item at events.  However, if you either truly answer this question or ask others this, you will be dismayed at the answer:  How many gift baskets did you give away to your family or friends for the holidays?  The answer is always NONE.  So why do charities continue to think these items will be profitable?  Someone would never give you full value of a Gift Certificate – it goes against human nature.  No one wants gift baskets and that’s why they are given away for gifts.

#7 – Businesses can not donate really profitable items which they sell in their stores, they must be able to continue to keep their business open.  They commonly will donate something that isn’t selling in order to at least get a write off or because someone is standing there, from their community asking.

#8 – Charities are misguided when they think they are the only people to ask that business for a donation.  Unfortunately, that week alone, they were asked 20 times.  Ask them for yourself about this?

#9 – EVERYONE IS LOOKING FOR A DEAL.  People spend with their wallets and NOT with their hearts – this is fact.

When using consigned items, such as the ones that we provide, you must understand “HOW” to use them and why they are successful. 

When charities are asked if they would like to use our consignment items, we commonly hear the same excuses such as “Our guests don’t have that kind of money” which is the single most phrase we hear.  However, the reality is, how would you know what your guests can afford if you are only offering them items such as a $50.00 gift certificate or John’s Vacation Home?  You have no idea how they will spend their money.  They want great items and will always bid high in order to win them.

Here are the facts for consignment items:

#1 – You must start the “Reserve” or “Starting Bid” at least 20% above the Cost to Non Profit. 

#2 – Prior to your event, you and your charity should get the consignment items sponsored.  More people can afford to sponsor items at a lesser price than Sponsorships ranging in the thousands.  By getting the items sponsored, you are guaranteed to make 100% of the selling price.  If the item does not sell, the item is simply returned and your charity keeps the sponsorship money. 

#3 – Guests are looking for exciting items and Vacation Packages to bid on, not local arts & crafts.

#4 – Charity events in a local community compete against each other.  Depending on the event, which one do you think more people would like to attend?  The one that has a silent auction filled with Gift Baskets and Gift certificates or the one filled with one of kind items and vacation packages? 

#5 – You are guaranteed to profit.

#6 – Guests routinely bid low on donated items but bid high on consignment items – what does this prove?  That they indeed have the money to spend but they will only spend higher amounts on items which are worth it.  Plus if you use donated items in the silent auction, having consigned items mixed in will raise the bid amounts on the donated items.

In summary, by continuing to do what you and your charity has always done, step out of the box and try new things and new approaches.  We strongly suggest you follow the lead of some of the most successful charities in the country and use high quality items which you can get from us, BW Unlimited Charity Fundraising, for your next Live and Silent Auction.

If we can help you or answer questions about this or other myths, contact us at info@bwunlimited.com.

BW Unlimited Charity Fundraising is the nations leading charity fundraising company in a convenient “One Stop Shop” setting.  BWUCF offers a wide array of auction items and is known as the only trusted provider in the charity industry for truly 100% authentic autographed items.  BWUCF also offers a full suite of event planning and staffing.  For more information, check out our website at www.BWUnlimited.com.