While many aspects of fundraising have evolved over the years, one thing has remained the same: charitable donations comprise roughly 2% of the country’s gross domestic product and have averaged around 3% of a typical family’s household budget.
The average household income before taxes in the United States has hovered around $70,000. Let’s say this household allocates all of their income to expenses. According to the expense breakdown, then we can expect households to contribute 3% of their income or approximately $2,100 to charities.
Using data from the National Philanthropic trust, we know that on average, high net worth donors gave $25,509 to charity in 2015. By comparison, general population households gave $2,520 on average. While the average household donation might not seem that high, when combined, donors of all types gave a total of $410 billion in 2017, increasing 5.2% from 2016. And the numbers are rising.
It’s also worth looking beyond the funds that households allocate to charitable contributions. When you look at discretionary expenditures, households are spending on average $8,400 annually, amounting in trillions of dollars on a national level.
If you hold to the assumption that the guests coming to your event are going to spend money solely out of their “charitable contributions” budget, then you are limited to a portion of that annual $2,100 budget we talked about earlier.
If all you offer is a paddle raise (direct donation/ask), then you are definitely going to be stuck in this portion of their wallet. Moreover, you will be competing for just a share of their charity budget with other causes they care about.
We invite you to think beyond the charitable contributions budget and think in terms of a silent auction participant’s annual discretionary spending budget.
Why would we think that? Because silent auctions offer guests the opportunity to purchase things that are most often discretionary, like entertainment, experiences, travel, food and dining, and merchandise.
Finally, keep in mind that you can do both an auction and a paddle raise. If your ultimate goal is to raise funds, give people options for how they can donate and support your organization. Paddle raises can be exciting and are familiar to a lot of people, making them a great option. The downside is that paddle raises can require extra effort from your staff for accurate recording during the event, and post-event checkout. Silent bidding, especially when used with software, can be a seamless, engaging experience that helps you raise money quickly and allows for easy checkout.
Don’t take this the wrong way, as we are sure your event is fun.
However your guests will be at your event for hours, and attention spans grow shorter, not longer. In fact, recent studies show the average human has a shorter attention span than a goldfish: 8 seconds!
Over the course of an event, guests will partake in eating and drinking, mingling with friends and colleagues, enjoying entertainment, and listening to presentations.
Despite all of that, it would be dangerous to assume that they are not also browsing Facebook, checking email, texting friends, taking photos, and wandering outside of your event (yes, guests wander) in order to fill more time.
Giving guests something to do that will also generate revenue makes great sense.
Of course you do! However, it's not likely that most of your guests will pay full attention to the speaker or entertainment for the entire presentation. This is especially the case when some of these speakers talk for 15 minutes or more.
Often we see charities “pause” an auction during speaker presentations out of respect for the speaker only to observe guests doing other things on their phone instead if they’re not simply getting up and leaving the room altogether.
A silent auction, especially one run on mobile phones, will keep your guests connected to your event and help you generate more revenue!
Building on Benefit #1 (tapping into a larger share of your supporters’ wallets), another important point is that silent auctions offer the opportunity for guests that are new to your organization to contribute to your cause without requiring them to make a direct donation.
We love it when our committed donors invite their friends to attend, don’t we? Especially when those donors purchase a table and fill it with new faces. But, are they there for a party with their friends, or are they there to donate to your cause?
Our event statistics show that roughly 30% of attendees participate in a paddle raise. However, we see higher percentages of attendees participate in other revenue-generating activities: auctions, raffles, and games.
In short, you want to provide all of your guests with a way to connect with your organization and spend money. While these newcomers may not be connected enough with your mission to donate directly, you can still generate revenue with these other activities.
In addition, by inviting them to participate in other activities, particularly ones that allow you to track users like silent auctions, you can grow your marketing database and convert newcomers to supporters. Don’t miss that opportunity!