Sep 7, 2021

What makes the silent auction so special for hybrid fundraising

What makes the silent auction so special for hybrid fundraising

Successful silent auctions can be excellent for hybrid fundraising. They’re an exciting activity with low costs that captures donors’ attention at the event or online, resulting in large donations.

Silent auctions provide value to your donors while pitting them against others to see who can donate the most to your cause. Since you won’t need an active auctioneer speaking to a crowd of people, you can run the virtual silent auction event for as long as necessary with bids being placed digitally. The digital element can also attract donors who wouldn’t be able to come to your event in person.

This format functions effectively when combined with a larger event, like a gala or a tournament, to offer even more value to your guests. Adding an auction to an existing event remains inexpensive, especially if all the items are donated from local businesses. Many businesses are happy to donate because it can improve their brand’s PR, provide free advertising and make them eligible to receive certain tax breaks.

Why participate in an auction?

There are many benefits of an auction for fundraising. These benefits deal with human psychology and your donation funnel strategy.

Donors get what they really want

1. Donors get what they really want

Unlike other fundraisers that provide a single type of service or product to everyone, like a bake sale or car wash, auctions incorporate a larger variety of options to be sold. People may feel a deeper connection to a unique item compared to a “one size fits all” product. The special value of these auction items will be attractive to your current supporters and their colleagues and friends, as well.

2. Increase prospect pool

An auction puts your nonprofit into contact with many new donors and charitable businesses. With the right lead nurturing, these contacts can become a source of future donors and fundraising partners. An auction makes new donors aware of your cause, which can be followed up by thank-you letters and newsletters.

3. People bid high

Auction fever is the effect an auction has on participants that puts them in a state of competitive arousal and often causes them to bid irrationally high. A 2005 study found that rivalry between bidding participants, being present in a social environment, time pressure, and the perceived uniqueness of the item being sold fueled feelings of competition and commitment to the item being sold. This results in a tendency for people to bid quite high.

A 2015 study published in the Journal of Retailing discovered that social competition is the main driver behind auction fever, which can be intensified by time pressure, thus increasing bid amounts. Auction fever only occurs if there is social competition present, time pressure alone doesn’t cause this effect. They also found that the positive feelings from winning are felt more strongly compared to the negative feelings from losing. This means you can count on your donors coming back for your future auctions if only for the feeling of winning.

Another psychological bias at play is the endowment effect, which causes people to overvalue their own possessions. A 1990 study conducted by Kahneman, Knetsch and Thaler discovered that when people are given a mug or a pen and have the option to trade their item for the other, people were less likely to trade their own item unless they were offered value higher than their item’s worth. This endowment effect may be at play when people begin to associate auction items as being theirs. Once they’ve bid on them, they perceive the item to be more valuable and will spend more to make it theirs.

The winner’s curse is another effect that tends to drive bids higher than an auction item’s worth. The winner’s curse occurs when several parties involved in bidding are uncertain of the value of an auction item. Since they don’t know how much it’s worth, they will tend to bid more than the item’s worth.

A new take on fundraising

2020 accelerated the already rising trend in virtual fundraising. A 2020 Nonprofit Standards benchmarking survey found that 64% of nonprofits surveyed planned to invest in new technology. This 64% of nonprofits was made up of the following:

  • 70% described themselves as thriving.
  • 65% described themselves as sustaining.
  • 43% described themselves as struggling.
How virtual is affecting silent auctions

How virtual is affecting silent auctions

The psychological effects that are present in live auctions remain mostly present in virtual silent auction events. This is evidenced by a 2008 study that tested the effect of computer opponents in digital auctions. When bidding against a computer, a person will bid rationally. But when bidding against another user, they began to bid irrationally high. Another study in 2009 from the Journal of Electronic Commerce Research had a similar finding when they tested the effect of online auctions on the winner’s curse.

The psychological states that cause people to bid high may be intensified by software like the GiveSmart silent auction platform, which allows for bidding on mobile devices. A mere phone notification indicating a donor has been outbid can put them into an auction fever and push them to bid more and further contribute to your cause.

Virtual auction technology can also help you streamline your virtual silent auction event planning. The GiveSmart silent auction fundraising software lets item donors submit images and descriptions directly through your site, which can be easily managed through our interface. In a continued effort to save you time, our silent auction software automatically generates item sheets to display at your event. And to help you make data-informed decisions, GiveSmart software collects event data so you can track your auction’s performance in real-time.

What’s next?

It’s clear virtual fundraising is becoming increasingly popular among nonprofits of all sizes, and silent auctions can be a tremendous source of donations and prospects. To maintain your edge and streamline your next hybrid silent auction event, set up our advanced silent auction software or take a look at some of our other fundraising event management software today.


December 15, 2022

Organizing a Toy Drive 

The holidays are a time of giving, with many people worldwide exchanging gifts with their…

Read More
December 8, 2022

Giving Tuesday 2022 Results

Check out what wrapped and what’s playing next There is one day that lives rent-free…

Read More
November 28, 2022

“What is Giving Tuesday? Behind the ‘Global Generosity Movement’ “

This article by Sara Santora originally appeared in Newsweek on November 28, 2022. It features insights…

Read More

What our clients say

We needed a platform to make sales online and to track and display ads for our sponsors. GiveSmart was perfect. We ended up making close to $15,000 more than we had hoped for. Definite better ROI than we anticipated. The interface is easy to use and provides plenty of options to get help if needed.

Michelle M.

The Rotary Club of South Whidbey Island

Using GS has created ease in auction bookkeeping, payments, and generating post-event thank you/tax letters. While we were online during COVID, our interactions with our GiveSmart via phone, email, and zoom were seamless. A representative always got back to us within the day. I would recommend GiveSmart to anyone doing a large online event.

Julie G.

MicroFinancing Partners in Africa

GiveSmart is highly flexible - you can use it for [a] simple registration and check-in, to full-scale galas with complex order forms, onsite upsells, live auctions, seating management, and more.

Jamie F.

Hope Chest for Breast Cancer

GiveSmart is easy to use and ideal for virtual events and can be used for in-person events to manage the silent auction, seating charts, and check-in to the event. Being able to use the platform for unlimited events within the contract year is very useful and being able to add other users and volunteers for different levels of access is helpful as well.

Dawn L.

Literacy Coalition of Palm Beach County