Procurement of Donations
 
Setting Ground Rules
Before you start collecting donations, set some ground rules for things such as the types of donations to be solicited and accepted, how they should be collected, and when they should be in. Make sure that everyone on your procurement team is aware of these ground rules before they begin procuring donations.

Appropriateness of Donations - Not all donations would be appreciated by all groups. For example, we know of groups that have gotten donations for surgical offices for vasectomies. While valuable and useful to some, not all groups would be comfortable selling that item. Are there things that, for whatever reason, should be considered off limits for your auction?
 

“Bad” Donations - While the vast majority of your donors will be genuinely trying to help your fundraiser meet its goals, there are those who would use your event as an opportunity to further their own needs. One organization we know received twenty coupons for free 37-point vehicle inspections from a local auto shop. These coupons provided little value to the purchasers at the event, beyond the chance for the shop’s mechanic to sell them repair services. Another group allowed a local artist to sell his work at a booth at their fundraiser. In return, the artist donated only 10% of his profits. In both of these cases, the donor’s own promotion was obviously their main concern.
 
Of course, we’re not suggesting that it’s bad to plug businesses that support your cause. This is, indeed, good practice. Your group benefits via the honest support of the business, and the business receives valuable exposure to a grateful market. Keep in mind that your fundraiser is first and foremost being done to support your cause. Be wary of the very few that will try to take advantage of your event for their own ends.
 
You may also be given items that, while given with the best of intentions, simply don’t fit your event very well. You’ll have to decide how to handle situations like this on an item by item basis. Sometimes an item can be graciously refused. Other times, it might be better to accept an item, rather than cause hurt feelings.
 
As an example, a donor once presented a group with a tea set they had hand-painted. It was a lovely thought, given with the best intentions. Unfortunately, the donor wasn’t a very good painter, and the tea set was really quite unattractive. Rather than hurt the feelings of the donor, it was put up for sale at the event. It didn’t sell, so the group held onto the item for their event the following year. Although it didn’t sell at that event either, it was eventually sold at an odds and ends mini-auction held later. Storing the item for a year didn’t cost the group anything, and it did eventually net the group a few dollars. Everyone ended up happy.
 
Incomplete or Undelivered Donations - It is common for groups to have special items created by members of their community for sale at their event. You should be very careful about selling such items at your event if they have not been completed or delivered by the agreed upon time. We’ve seen many cases where purchasers have spent weeks in frustration trying to get an incomplete item finished or delivered by the donor. In some cases, purchasers have even had to be given refunds because the donor never produced a promised donation. Of course, there are always exceptions, but we suggest that donations never be sold unless they are completed and deliverable by the day of the event.
 
Donation Deadlines - You should make your donation deadline dates clear from the very beginning of your procurement effort. Of course, stating deadlines doesn’t always guarantee that they’ll be met, but it’s a good way to start. There are three dates and times to worry about in particular.
 
First, you will have a catalog cutoff date, after which no more items will be accepted for inclusion in the catalog. Your catalog people will need time to compile item descriptions and other information, lay out the catalog, and get it printed and bound. This job is big enough, without having to rearrange things for items that are added late. Discuss this date with your catalog people, but it should be roughly one to two weeks before your event.
 
Next, there should be a final cutoff date, after which no further donations will be accepted for your event. Items accepted since the catalog cutoff date can be listed in a simple addendum to your catalog, made available of the day of your event. You will need time to generate descriptions of these items, and publish the catalog addendum, but you also want to be able to accept donations as long as possible. Balancing these needs, this date should be just a few days, but no more than a week, before your event.
 
The final deadline concerns items like fudge, cookies, plants, fine art, expensive jewelry or other perishable or priceless items. You probably won’t want your group to take possession of these sorts of items until event day. This final deadline is the time on your event day by which all items need to be at your venue, ready for sale.
 
Donation Receipts - It is imperative that anyone taking donations be aware of the importance of donation receipts. They are the tax receipt for your donor, and a record of all the information about an item for you. Anytime a donation is received by your organization a receipt must be completely and accurately filled out. Three copies should be made (3-part NCR paper makes this easy): one copy will go to the donor, one will stay with the item, and one will be filed with your organization’s records.
 
If you are using auction management software, you will likely want to use the receipts provided by it. If you are not using software, you must provide receipts yourself. The list below shows the information you should record on each receipt.

Your Organization’s Name, Contact Information, & Tax ID Number
 
Item Title, Description, Conditions of Use, & Fair Market Value
 
Donor Name and/or Company, Address, Phone, & Signature
 
Solicitor Name, Phone, & Signature
 
Delivery Status
 
Gift Certificate Status

Since the fair market value of your items might be used by the donor and purchaser for tax reporting purposes, it is best if you limit your liability by having the donor state the donation value. While you can certainly discuss an item’s value, you should never set the value for any item you did not provide. If a donor is simply unreasonable about a donation’s value, you may want to consider graciously declining the donation. Otherwise, you can adjust the starting bid of any item to compensate. After that, trust your guests to buy the item or not. Be sure to let your guests know, perhaps in your catalog, that all item values were provided by their donors. By letting them know this is your policy, you will help protect your own credibility.
 
The delivery status on the donation receipt records whether the item is in hand, or if it will be delivered or picked up at a later time (as with perishable items). The gift certificate status is used to record that a gift certificate was received and filed, or that your organization is authorized to print one for use at your event. Finally, signatures provided by the donor and solicitor (or other collector) of an item ensure that both parties agree on the information provided on the form.
 
Donation Data Entry - If your group is using auction management software, donation data will have to be entered by someone. While you could have each solicitor enter their own data, we suggest that you assign a single person do this job for everyone. Not only does this make one person a focal point for seeing that all necessary information is collected, but it also provides some consistency in how items are titled and described in your database. If this data is entered cleanly for donations, it won’t have to be heavily edited when doing later jobs like packaging, gift certificate generation, and catalog publishing. These jobs will be made much simpler.
 
Underwriting - Your group may want to include items in a package that donors are unable or unwilling to provide via a donation. In these cases, you have little choice but to purchase, or underwrite, the item. Since you are spending your group’s money, and this spending directly affects your bottom line, you want to be very careful about how you do it.
More than once, groups have allowed their staff to purchase items for their event at their own discretion, and then ask for reimbursement later. Few stay within their original budget amounts or get to their events without unplanned items.
 
The amount you have available for such purchases should have been listed in your budget to serve as a limiting factor to your spending. Never make these purchases on the spur of the moment. You should have a plan for specific items you think you should underwrite, and then always try to procure these items as donations first. Finally, have a pre-defined authorization process for these purchases, and follow it consistently.
 
Item Transportation - Between the times that you start taking donations and the day of your event, you will accumulate a lot of items! Each of these will have to be taken from the donor’s drop-off point to your storage location. Your item storage must be secure, so you must decide who will have access to it.
 
We suggest that you limit this to just a very few people. Even if all your people are 100% trustworthy, having multiple keys out or multiple people aware of combinations and passwords reduces the security of your storage.
Of course, the few people that have access will have to be willing to do all the item transportation, or at least, be along for the ride in every case. While this may inconvenient, it keeps your items much more secure, and that should be your main concern.

[ Next ]