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 1/8^th 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.

THE “SECRET”: How you and your charity can raise much more money utilizing this “Secret Fundraising” tool.

Note:  Only the people who took the time to read this will benefit from it.

Prior to launching our company, I was involved with several charities involved in the outdoors.  One of the company’s I was extremely familiar with was and still is “Ducks Unlimited.”  Last year, as reported by Charity Navigator, Ducks Unlimited Total Net Profit was $195,923,938.00.   “DU” as they are commonly known by, is a fundraising machine.  This one charity has fundraising so figured out that they make nearly $200 million dollars each year.  Incredibly successful. 

What does “DU” know that you don’t?  They mandate that anyone fundraising use high quality items which they supply.  Now, the items which they supply are not “Consigned”, the fundraising entities (known as chapters) have to purchase the items directly from “DU.”  After the fundraising events, the cost of the items is deducted from the Gross of the event.  What does “DU” know that you don’t?  The answer is this – they, as well as other charities who have adopted this practice, know that they must have great items in order to make much more profit.  Believe it or not, they do not want donated items.

When we started, our company identified the fact that there were currently 104 Million charities in the United States.  We then took the idea from charities like “DU/Ducks Unlimited” in regard to using high quality items and began to introduce it to the charities outside of the outdoor charities.  However, we decided instead of trying to sell these products to charities, we would consign them.  We came up with the plan that charities would be able to use our items, mark up the starting bid above our costs by at least 20% and no matter how high the profit, they would keep 100% of it.  If the item or items did not sell, they could simply return them at no cost to them.  I understood the importance of it and the fundraising impact it would have for charities – but unfortunately, the charities did not.

Immediately we were met with resistance.  We heard commonly “Our charity does not allow us to use items we have to pay for” or “We only accept donated items” or “We are against using items that are consigned.”  What they failed to understand or realize is simply this – they pay for the venue which they are holding the fundraiser, they are paying for the food, the decorations, the printing costs, the bar and everything else but when it came to the tools which would help them raise the money they need, their thought process shut off completely.  They wanted and would only accept totally free items. 

Over the many years we have been in business, we have studied every single fundraising trend there is.  After specifically studying donated items, we found that donated items only bring 1/8^th to 1/4 of their full retail value.  Why so little?  Because the event is attended by people who live locally, the event itself is local and the items are donated by local businesses – if the guests wanted them, they would have gone and bought them themselves.  Furthermore, after speaking to the same businesses who donated – they informed us that the items they donate are ones that are not selling in the stores.  People are always looking for a deal.  The most drastic thing that stood out is that two (2) of the most common items used in fundraising events are Gift Cards and Gift Baskets.  I have asked our clients for years this question “How many Gift Baskets did you give away to your family or friends for the holidays?” and every single time I have been told “None/Zero.”  Furthermore, I’ve asked everyone how many times have you bought yourself a Gift Card?  Again, they laugh and say “Never” – that is why they are both called “GIFT Cards / GIFT Baskets” because we give them away as gifts.  No one will ever pay anywhere near what they are worth based on this simple observation.  But yet, every single day, charities across the nation still insist on getting and using these unsuccessful fundraising items as the keys to their success.  

No matter how hard I tried to tell or convince them, they were not going to do it.   Slowly, charities began to accept the idea and started using our items.  Those charities experienced immense profit and would commonly say “This sounds too good to be true, what’s the catch?”  My response was and still is “It’s good and it’s true, but it’s not too good to be true – there is no catch” and I put it (our policy) in writing on our website and in contracts.  Slowly it started to catch on.

Then one evening, as if a light bulb went off, an idea came to me which would revolutionize the use of our items and could possibly even change the thinking of the charities who refused to use consigned items or items which they had to pay for.   I am going to share it with you and you too will realize just how brilliant it truly is.

The Secret is “Underwriting” or Sponsoring the items themselves.

As you are already well aware of, routinely charities offer differing sponsorship levels – Gold Sponsorship for $5,000.00, Silver Sponsorship for $2,500.00 etc.  Some sponsorship's are much higher.  However, the fact of the matter is, most people can not afford these levels of sponsorship.  However, they can afford much lower, much more affordable monetary sponsorship's such as $250.00. 

Here is the Secret – Businesses such as Real Estate brokers and Agents, Doctors, Lawyers, Accountants, Dentists, Consultants etc. have nothing to donate other than money.  These people are never approached and asked to donate unlike your local jewelry store.  However, if you offer them a chance to “Sponsor” or “Underwrite” the cost of an item, they will.  Let’s say you approach Jane from ABC realty.  Jane looks at the items available, chooses one and writes you a check for the cost of the item.  You then place the item on your Live or Silent Auction with a tent card in front of it reading “Sponsored by Jane Smith, ABC Realty”, while marking up the “Starting Bid” 20%.  When the item gets bid on and no matter how high it goes, you and your charity now keeps 100% of the funds brought in because “Jane from ABC Realty” paid for the item and received marketing in return.  WIN WIN.

Now here is the best part of “The Secret” – If the item does not receive a bid, you simply return the item back to BW Unlimited and you keep the sponsorship money “Jane from ABC Realty” gave you.  You can not lose.

Using this secret “Brought to you by the great people of BW Unlimited Charity Fundraising”, you will raise more money then you could ever dream of while giving many more people an opportunity to help you.

For secrets like this and many more, contact us at www.BWUnlimited.com.  We would love to help you EXCEED your fundraising goals each and every year.