The appeal goes by various names: fund a need, gift from the heart, or any of these other cash appeal names.

• To get a bit into the weeds, some groups use the term “fund a need” when they are raising money to fund something specific, such as a security fence, an HVAC system, or scholarships.
• In contrast, more generic terms like “paddle raise” or “appeal” means the money raised is funding anything required. The funds are moving into the nonprofit’s operating budget and could be used for programmatic work or to pay the electric bill.

To be successful in your fund a need, here are some ideas.

Seven tips to executing a great fund a need.

1. Select a single item or cause to fund.

You will confuse your audience if you have a laundry list of activities or items. I saw an appeal flop at one school because they insisted on raising money for three items. Some members of the (tipsy) audience became confused and thought they could choose which item they would fund. Keep it simple by keeping it singular.

2. Advertise the appeal.

Just as you would advertise a silent or live auction item, you should advertise the appeal. Talk it up prior to the gala, put it in your catalog, highlight it in your program, and ensure it has its own display table in the silent auction (see photo).  Showcase it.

3. Describe the need.

This can be conveyed in a heart-wrenching video, a heart-warming live testimonial, or via a short plea from someone close to the need who can succinctly describe its impact. Guests need to understand where the money is going, and how it will help the cause. As of late, I’ve been asked to convey the need on behalf of the charity. This approach can work, too, if you’ve got the right auctioneer.

4. Offer several different pledge levels so everyone can participate.

The appeal is the “group gift” of the gala, but not everyone is going to be able to give at the same level. By offering four to six different levels of pledges, you ensure everyone in your crowd can give and feels good about it.

5. Begin by asking for the most amount of money (your highest giving level), and end by asking for the least amount of money (your lowest giving level).

This is simple psychology. Asking a guest to pledge $100 seems a modest request after they have just witnessed other guests pledging $1,000.

6. Ask auction guests to raise their bid card to make their pledge public.

With few exceptions, public pledging will raise more money than silent pledging.

Pledges written on notecards and collected by volunteers aren’t effective. When a guest watches a neighbor raise his bid card, there is subtle pressure to do the same.

(Incidentally, this is one of the weak points for mobile bidding. Asking people to donate quietly on their phone instead of asking them raise their bid card will result in less money raised overall. If your event requires donating on the phone, you should change your approach. Talk to your auctioneer about the best method.)

7. If you can, announce the total of what was raised.

Guests are always curious about the total. My experience has been that even when the money raised hasn’t been as spectacular as privately hoped, guests don’t know it. “Wow, we raised $25,000!” a guest will enthusiastically tell me, even though the nonprofit had been hoping for $35,000.

Announcing the total inspires guests; they feel good about their participation. You’ll likely even collect a few more donations as guests check-out.

And now that you’ve got the basics down, what about the rest?

What about examples of great videos that have been used as introductions prior to the Fund a Need? What about the sample scripts I’ve used in front of groups? What about the three types of Fund a Needs, and when should you use each? 

You can learn all of that (and much more) in Fabulous Fund a Need Secrets.

Not so.

Here’s a true story of how a benefit auctioneer can impact the quality of donations you receive.

As a recent gala was ending and the guests were chatting and checking out, I was visiting with one of the founders of the organization. While he congratulated me on the success of the night, a woman rushed up and interrupted.

She quickly thanked me and then turned to the founder, making enthusiastic gestures.

“Do you now understand why you should hire a professional auctioneer?!” she gushed, “This is why! Donors like me feel more comfortable donating when we know our donation will bring good money for the school.”

She continued.

She told him that she donates a pricey $10k trip to another nonprofit in town, but has never donated it to his group. “I don’t want it to sell for a fraction of that here,” she said. “They [the other nonprofit] sell it for $12,000!”

As a high-end donor, she wanted to ensure her donations were properly marketed and sold.

She was willing to give the school better items to sell if she trusted the auctioneer selling onstage would be able to maximize their sale.

“When I see vacation homes selling for good money, like we did here tonight,” she told the founder, “then I feel better about donating my trip to you.”

This isn’t the first time I’ve heard a donor say something like this, but it was the first time I’d heard a donor say it in front of someone of influence.

That passionate woman made sure her remarks were heard by someone in power – the founder of the school. Smart gal.

If you have supporters with access to quality donations, but those supporters are hesitant to donate the nicest items to your auction, you should be asking yourself why they’re holding back.

• Are they unimpressed in your ability to market their items, or attract bidders who will pay top dollar?
• Do the supporters lack confidence in the auctioneer you’ve hired to sell the packages?
• Do the supporters believe you’ve shown poor judgment in your choices, and aren’t able to run a first-class event? (Savvy donors are a bit like parents who judiciously give money to a child. If the child makes wise choices, the parents feel good about entrusting the child with more money. If your donors distrust your judgment, they aren’t going to give you their most prized possessions, like a week stay at a dream beach home.)
• Are they quietly observing, waiting for the day your gala shows some consistent quality? (Last year, one of my smallest clients had their most successful event ever. Guests raved! This year, the volunteer gala chair wants to change it completely. If I was the Executive Director of that nonprofit, I’d have a serious conversation with the volunteer. Now that the group has the inkling of an event formula that works for them, they should be looking to solidify their success this year so potential donors watching the event know to expect a consistently good product.)

It can take two to three years, but when you start to routinely demonstrate a high level of quality in your event, you’ll find it easier to procure donations.

One of the most visible ways of demonstrating that you’re serious about your auction is to use an excellent auctioneer whom your guests and donors respect and enjoy.  Choose wisely.

The answer is a lot like eating prunes: “Will three get the job done? Is eight too many?” <wink>

Many factors go into my answer because the “right number of live auction items” depends on the client.

(Note that the “right number” of items is different than the “average number” of items. In 2015, my school clients sold an average of 15 live auction items at each gala. Almost 10 years later, in 2024, the average was 10.6. In 2015 my nonprofit clients would sell an average of 13.1 live auction items at their gala. In 2024, the average was 8.3 live auction items.)

Let’s consider what influences the number of live auction items.

If the gala’s timeline has already been determined and can’t be changed, my recommendation doesn’t matter. The client has already allotted a specific amount of time (20 minutes, 45 minutes) and now they just need to know how many items I can sell within that period.

But if there is flexibility in the timeline, we consider other factors, like those below.

1. Are you using a professional benefit auctioneer?

A professional benefit auctioneer will be able to sell more items in a given timeframe than someone who is not a professional. We’re in front of people asking for money all the time. We can read faces and know when to push.

Second, the entire reason “the chant” (the fast talk) was developed was to sell items quickly. Although your charity auctioneer will not chant as quickly as a livestock auctioneer, they will likely chant. It speeds the sale.

2. Are you offering good / exciting auction items?

If you’re selling exciting items with a wide appeal, you can sell more items in the live auction. If you are selling run-of-the-mill items (ordinary baskets, most gift certificates, generic items) you will lose your audience unless you can structure the event to keep them in their seats.

Tied to this, your auctioneer might have a sense of how long each item will take to sell.  Generally it takes me 4 minutes to describe and sell an item. But I also know that selling front-row seats at a high-school graduation will typically take less time than offering a trip to Bali.

3. Is the crowd standing or sitting?

This is a pretty simple concept. Seated guests will be more comfortable than standing guests, and you can sell more items in the live auction. You can even take this a step further and analyze the comfort of the chairs.

I used to do some marketing work for a church. When planning workshops, we would — I’m not joking — take into consideration the uncomfortable chairs. An all-day workshop was a harder sell because our congregation was familiar with the chair. They wouldn’t pay a higher price for an all-day workshop if they had to sit in uncomfortable chairs all day long.

4. What else will the crowd enjoy (or endure)?

In addition to the live auction, will your guests be seated through 30 minutes of presentations? Or a 45-minute choral concert?

Maybe you’ve heard this phrase: The mind can stand only what the butt can endure.

At some point, we humans need to stand up and walk. In my work, I’ll talk with clients about their schedule. We might move the live auction to a different part of the program once I know the other elements of the gala. I might recommend that the live auction might be the first activity of the program … the last … or somewhere in the middle.

5. What’s your financial goal for the live auction?

Whatever I sell in the live auction will bring in more money than if that same item is sold in the silent auction. Period.

So if there is a specific financial goal to hit in the live auction and we don’t have the right items or enough items to hit that goal, then we need to add auction items.

Your “perfect” live auction number may be adjusted to reach your financial goal. Whether you sell five auction items or forty items, it might be right for your group. Your benefit auctioneer will help you find the perfect number for you.

So what’s the perfect number for your gala?

If not, here are two examples you might wish to model.

Over ten years ago I started working with a private Lutheran school in Milwaukee, WI. They have diligently created a gala highlight reel every year. The video is posted on YouTube and a link is emailed to supporters.

A nonprofit client in California creates a similar video.

Watch both below to see two good examples of highlight reels.

Here are five reasons your auction gala highlights reel can recap and relive the excitement of your event.

1. Posting the video gives you yet another reason to reach out and thank supporters. “The video is done,” you will email, “you helped us raise $600k while looking like Hollywood stars!”
2. Guests who attended will watch the video to see if they are in it.
3. Supporters who didn’t attend may view it to see what they missed, especially if you point out certain elements to watch in the video.
4. Depending on how you shot the video, you can use it to encourage sponsorship support the following year. If you make a point to include sponsors in some fashion, you can use that as a recruitment tool for new sponsors next year. “Look at how well we treat our sponsors,” is the message you’ll send. (Tip: In my Sold Out Event Sponsorships course in the store, you’ll see real-life, auction-related videos that more directly promote sponsors.)
5. You can use the video next year, hyping guests to attend your event. “Here’s some of what we did last year,” you might say, “Expect more fabulous stuff this year.” Or, “Forgot what you wore? Review the video to jog your memory.”)

Of course, it’s much better to market your auction BEFORE your event than after it.

To that end, check out this course I taught last year, called Marketing Your Auction.  Learn more and shop in the store. 

“Is it OK to put the fair market value of an auction item on the receipt, instead of listing it on the bid sheet, auction catalog or display?”

Some people believe (mistakenly, in my mind) that guests will pay more for an item if they don’t know the value of it.

The IRS regulation explains that for a donation above the fair market value to be considered a gift, the winning bidder must be told the fair market value before bidding.

Here is the IRS section, with my emphasis added:

Donors who purchase items at a charity auction may claim a charitable contribution deduction for the excess of the purchase price paid for an item over its fair market value. The donor must be able to show, however, that he or she knew that the value of the item was less than the amount paid.

For example, a charity may publish a catalog, given to each person who attends an auction, providing a good faith estimate of items that will be available for bidding. Assuming the donor has no reason to doubt the accuracy of the published estimate, if he or she pays more than the published value, the difference between the amount paid and the published value may constitute a charitable contribution deduction.

One might say, “Well, a receipt shows that the buyer knew that the value was less than the amount paid. That should suffice.”

Not really.

A receipt proves that the buyer learned that the value was less than the amount paid AFTER he made the decision to bid and buy. He didn’t know the value until he bought the item.

The IRS doesn’t say that the buyer must learn the value.

The IRS states that “the donor … must be able to show he KNEW the value.”

“Knew” = “understood with certainty.” It indicates that the buyer had advance knowledge of the value.

A receipt can’t offer advance knowledge as it’s given after the sale has been made.

Are “priceless” items tax deductible?

Now let’s talk about another debated topic: priceless items.

Priceless items are those with no firm value, such as a coveted parking spot in front of the school, or the behind-the-scenes tour of the television station. They are desirable, but not typically for sale on the open market. Hence, many nonprofits label them as priceless.

If an item is labeled as “priceless,” there is NO TAX DEDUCTION.

The winning bid establishes the fair market value. This means there is no deduction.

Here’s what I pulled from the Johns Hopkins Medicine auction guidelines. Point 5 speaks to this specifically:

1. Each item of a Silent Auction should be valued at the Fair Market Value. This value must be listed on the Bid Sheet at the auction table, as well as in any printed list of the auction items.
   
2. Each item of a Live Auction should be valued at the Fair Market Value and that value must be listed on a printed list of the auction items.
   
3. Donors of the items for Silent and Live Auctions should provide the Fair Market Value of their item/service. If the item is a “collectible,” reasonable efforts should be made to assess the value (e.g. contact an antique or collectible dealer who has some knowledge of similar items).
   
4. Only winning bids that are over the stated Fair Market Value will receive receipt information on their charitable gift.
   
5. If an item is not valued, or valued as priceless, the final auction bid then establishes the item’s fair market value, therefore no portion is tax-deductible.
   

To be kind to your buyers, consider valuing your priceless items at $1.00.

Does it still seem unclear to you, or open to misinterpretation?

I’m not writing these rules, so my advice is to direct all questions to the IRS.