Silent auction companies: what they cost, and when to run it yourself

What does a silent auction company do?

A silent auction company runs the silent auction at your event, and usually supplies some or all of the lots. Some are software only. Others arrive with a brochure of prizes, staff and screens, and run the whole thing for you.

The more they supply, the more of the evening’s money passes through their hands, and the more it pays to understand exactly how they are paid. Because with most of them, the way they make their money is not the way you would guess.

How silent auction companies make their money

Most of it is invisible to your guests, and often to you. These are the common ones to know about:

• Marked-up prizes. A lot is supplied at a reserve set well above what it cost the company. That gap is their profit, taken first, and your charity only ever sees bids above the reserve, which very often means nothing.
• A “free” service funded by tips. The platform is free because a tip is added to your donors’ payments at checkout, most of which the company keeps rather than the cause.
• A percentage of everything you raise. The better your night goes, the more they take.
• Your money through their account. Funds routed through the company rather than straight to you.
• Your data kept as theirs. The donor and bidder details you gathered on the night stay with them.

None of this is illegal, and plenty of these companies are perfectly professional. But all of it moves money your guests meant for the cause somewhere else, and it is rarely spelled out unless you ask.

The one question worth asking

Before you sign with anyone, ask the question that cuts through all of it: of every pound our guests spend, how much does the charity actually keep? Ask for it in writing, per lot.

A company that is on your side will answer plainly. One that talks about “profit potential” and “no upfront cost” but will not put a number on what reaches the cause has told you what you need to know.

When should a smaller event just run it itself?

More often than the industry would like you to think. For a school fair, a club night, a village fete or a first small fundraiser, you very often do not need a company at all.

Ask local businesses and supporters for donated prizes, keep the auction to a tight handful of good lots, use a simple bid sheet or a free app, and every pound stays with the cause. A company earns its fee when your event is large and the lots are genuinely hard to source yourselves. Below that, the maths usually favours doing it in-house, and I would rather tell you that than sell you something you do not need.

If you do hire one, ask these first

• What percentage of what we raise does the charity actually keep?
• Do you supply the lots, and what did each cost you against its reserve?
• Are you a for-profit company, and will our guests be told that?
• Whose account do the funds go into, ours or yours?
• Who owns the donor and bidder data afterwards?
• Will the silent auction close before the live auction and pledge?
• Are there any tips, commissions or fees on top?

The moment that wins the money is the pledge

Whatever you decide about the silent auction, remember what your guests actually came for. People come to a fundraiser to make a difference, not to buy a shiny lot. That is why a live pledge, run straight after the auction, so often raises more than the lots themselves. It gives every guest a way to give, at a level they choose, with nothing skimmed on the way.

It is worth more thought than the prize table. Here is how I run a live pledge.

Common questions