Budget & Finance

Online Auctions Prove Boon for School Fund-Raisers

By Rhea R. Borja — June 21, 2005 4 min read
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Parents who want to help their children’s schools raise money can do more than sell candy or bake cookies. All they need is an Internet connection and a credit card.

With that, they can buy a $100 restaurant gift certificate. A spa-treatment basket. Even a seven-day yacht-club cruise with 50 staterooms and a staff of 89 at their disposal.

Tighter state and district education budgets have spurred schools, parent-student groups, and education foundations to use online auctions to raise money, say school fund-raising experts such as Michael W. Cathey, the deputy executive director of the Chicago-based National PTA. The auctions have enabled some schools to keep academic and sports programs—and even teachers—that would otherwise be cut.

“Auctions are a growing, innovative way to raise money,” he said. “A simple way.”

Mr. Cathey knows that firsthand. The National PTA held its first two online auctions last year. The first raised $18,000. The second, during the holiday season, netted triple that amount.

Schools have auctioned a wide range of goods and services online, including travel packages, sports equipment, SAT tutoring classes, and a year's supply of coffee.

St. Edward’s School, a pre-K-12 private school in Vero Beach, Fla., did even better. The fund-raising goal for the 940-student school’s annual benefit this spring, which includes both an in-person and online auction, was $150,000.

Instead, the school raised $262,000, with $52,000 of that coming from the online auction, said Stephen M. Higgins, the school’s community-relations director.

The winning bid for the spa-treatment package in the online auction was $275, while the yacht-club cruise went for a princely $10,000. Other items included an SAT tutoring course, a father-son freshwater-fishing trip, and a year’s supply of coffee. The money raised went into the school’s operating fund.

“The online auction had a huge positive impact on our fund raising,” Mr. Higgins said. “This is our own eBay.”

Paying for Teachers

Like many school districts, Massachusetts’ 1,500-student Cohasset district, 17 miles from Boston, faced budget cuts in 2003-04. Three elementary teaching positions were among the items slated for cuts.

But a small group of parents and the Cohasset Education Foundation banded together to raise the money to pay the teachers’ salaries, at a cost of $100,000. In the spring of 2004, they made phone calls to drum up donations and publicity for the “Save Three Teachers” campaign.

Parent Lisa Dooley also suggested an online auction. With only a month left before a budget decision had to be made, the organizers solicited other parents and local businesses to donate jewelry, gift certificates, and other items.

They hoped to raise $8,000 or so from the online auction, but generated $15,000. In total, the parents raised $70,000—enough to save two of the three teaching positions.

“That $15,000 put us over the top,” said Ms. Dooley, whose 2nd-grade son attends the school that almost lost two teachers.

Of course, how much a school or school-related organization makes varies widely. Some have earned very little, while others have made tens of thousands of dollars.

It all depends on how organized, aggressive, and savvy the school or parent-student group is in reaching its constituencies, say officials of some online-auction sites, such as Orlando, Fla.-based AuctionAnything.com; cMarket.com, of Cambridge, Mass.; and ReadySetAuction.com, in Bainbridge Island, Wash.

Many schools or parent-student groups use companies such as those, which specialize in helping nonprofit groups, to hold online auctions.

The Cost of Business

The online-auction companies will post photos and descriptions of the items up for bid on a school-branded Web site, track bidding, set up an online payment process, create a detailed contact list, and generate e-mail messages to potential buyers and thank-you letters to successful bidders.

This all comes at a price. Many companies charge a setup fee, ranging from several hundred dollars to $1,000, and also take 2 percent to 9 percent of the net revenue from the auction. And company officials concede that some schools and education groups can actually lose money if little is sold.

Some schools or parent groups hold auctions only online, while many others hold them along with a live auction. Doing them in tandem amplifies the impact of both, said Greg C. McHale, the founder and executive vice president of cMarket.com.

An online-auction site can reach alumni, friends, or relatives who live far away or who otherwise can’t make it to the live auction. And it generates more attention for the live event, as an online auction would precede it.

Online auctions also give free advertising to the businesses that donate items. Instead of a few hours of exposure to attendees at a live auction, Mr. McHale said, the companies get several weeks of advertising online to a much wider audience.

Online charity auctions have become so popular that the mega-online-auction company eBay has taken notice. In 2003, the San Jose, Calif.-based company partnered with MissionFish, a Washington-based nonprofit group, to establish eBay Giving Works, an online-auction site just for nonprofit groups.

The results have been so successful that the average price for an item sold on eBay Giving Works was three times more than it would have been on eBay, said Sean Milliken, the executive director of MissionFish.

“This was created to harness the power of eBay,” he said, “to enable anyone to give to any nonprofit they feel passionate about.”

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