US Economic Downturn Hits Charity Auctions

While the USA is in the early stages of an economic slowdown, the first casualties appear to be charity auctions according to a recent survey.

cMarket, a US online auction fundraiser announced the results of an economic impact survey completed by 255 charity auction managers across the United States who ran auctions between January and April of 2008.

The results of the survey indicate that while still in the early stages of the economic slowdown, 22% of respondents stated that they saw a decline in funds raised compared to last year and nearly all are bracing themselves for an even tougher Not for Profit fundraising environment over the months to come.

Overall the survey found auction administrators are finding it harder to get items, bidders are pulling back, a significant number are reporting attendance down at their galas, and corporate sponsors and commercial item donors are demanding more tangible marketing benefits in return for their underwriting.

The survey was conducted between May 29 and June 3rd and comprised 255 respondents.

Key findings from the survey include; 67.5% report that the economy had a somewhat or very noticeable impact on their event.

67.5% say it is "somewhat" or "much more" competitive getting items from local merchants and 39% say merchants are getting more demanding for marketing benefits.

40% said that corporate sponsors are getting more demanding in asking for marketing/promotion benefits 21% report lower attendance at this year’s gala and 32% say those bidders who did participate were less active.

Timothy Matthews, senior analyst, who led the project says they found that respondents were feeling the impact of the economy in many different ways.

He says even those whose auctions did well said they felt at least some softness, particularly on the supply side in terms of item donations and acquisition.

To the extent that auctions fund significant social needs from school playgrounds, medical research, scholarships to private schools, homeless shelters, etc., Not for Profit fundraising difficulty in this area will impact a broad cross section of society.

Jon Carson, CEO of cMarket says that in this environment auction committees are well advised to revisit their assumption around their goals and what is attainable.

Respondents had a variety of thoughts in what they will do differently next year. Over 62% said they would start the process of getting items earlier. Greater use of online was cited by 35% of respondents. Thirty one percent said they would get more high priced items while 16% said they would get additional lower priced items to appeal to more people.

In an earlier survey of Not for Profit auction bidders done in February 2008, cMarket found that 25% were planning on pulling back this year due to the economy. Timothy Matthews says this latest survey shows that more discretionary purchases such as art, collectibles, and jewellery didn’t do as well, while everyday items such as travel, dining and entertainment were still popular even if total bidding was down.