SchoolAuction.net is a service of Northworld LLC, the premier provider of benefit-auction software solutions. Which is to say, we’re a software company who likes to help non-profits with their fundraisers.
Today we will continue to explore some of the common bid-sheet choices that auction chairs hold diverging opinions on, and present the arguments from each side of the fence. Please feel free to contribute your opinions in the comments section below. And if this discussion is useful to you, you can sign up to be notified every time I put up a new installment in this series by signing up with the form on the left.
Choice#2: Should we display the FMV?
Fair Market Value is what a person could expect to pay for an item if they bought it at retail. It’s important to know the FMV for each item in your auction, because it determines the potential tax deduction your guests can take. But during the bidding period, should your guests know the FMV for each item in front of them?
The argument AGAINST printing the FMV on your bid sheets is easy - it represents another psychological ceiling for the bidding on that item. Your guests will accept the FMV as a “true” value, rather than doing the work to figure out what it is worth to them. Don’t tell them the FMV, and you’ll force them to decide for themselves - and what they decide might be much higher. This strategy is almost always used for classroom projects; the FMV for most kindergarten projects is often a tiny fraction of what they are worth to the parents of those kindergarteners. So why not use it with the silent auction items, too?
The argument FOR printing FMV is that it will encourage skittish or shy guests to make bids.
It is quite common that 15-20% of the guests will be responsible for 85% of the money spent at your school auction. These guests are likely to be willing to bid above the FMV for an item. Guests who won’t spend above FMV are “bargain hunters” - and the conventional wisdom is that you really don’t want to encourage bargain hunting, since you want your guests attitude to be focused on the good their money will do for your school.
But in order to get those final bids up above the FMV, you’re going to need to get those first few bidding lines filled in - and if the bargain hunters in the room can see that their is still room for them to add a qualifying bid below the FMV, they are likely to do so. If they win, that’s great (for them); if someone outbids them, well, there’s another item on the next table where the bidding is still only 75% of the FMV, and they’ll go bid on that one.
Our recommendation? The SchoolAuction.net software allows both options, but the default is to print the FMV on bid sheets. But again, the key is to know your audience - are you likely to get a lot of complaints that people wanted to buy, but didn’t feel comfortable doing so without knowing the FMV? Or do you have a wide base of benefit-savvy guests who are less concerned with finding a deal than contributing to your school?