Why Sealed Bids Can Hurt Your Charity Auction

"Auctions have been popular at charity fundraising events for years. In fact, event ticket sales usually only manage to cover the cost of putting the event on.  The auction is therefore critical to the event's fundraising success.

Live Auctions

The main revenue generator at the event is usually the live auction. An auctioneer sells a range of high ticket items; from holidays and artwork to money-can't-buy experiences. While some people find bidding in live auctions overwhelming (bidders and their bids can be highly visible), the process is straightforward and transparent.

Silent Auctions

Silent auctions have also long been part of the fabric of these events. Today, guests bid on items via their smart phones instead of writing bids on bid sheets, but the concept remains the same. Bidders battle it out to secure an item with the highest bid at the close of the auction. Bidders can see who they are bidding against, the bid amounts and the minimum increment they need to bid. Silent auctions remain popular as the element of fun and competition inherent in the bidding process drives the bidding up and ultimately the revenue for the charity.

Sealed Bids and Ballot Bidding

Sealed bids is another type of auction that's often used. It is a simple concept where bidders are asked to place a single bid. No one knows how much other bidders have bid and the highest bidder wins the item. A number of consignment item providers have adapted the concept of sealed bid auctions for charity events. It's sometimes called ballot bidding. Bidders" are asked to place their one time maximum bid for all items they want to bid on and provide their credit card details. However, bidders are not battling it out to win a single item as there are many of the same item available (a detail that is usually buried in the small print). “Bidders” don't realise that most people, or sometimes everyone who bids on the item, will win it. Regulars at these events soon learn that there is no need to bid over the reserve price to win. But at every event there is always a fresh supply of first time ballot/sealed bid bidders who don't fully understand the auction terms and bid high. So the charity hits its fundraising goals and the consignment provider earns far more revenue from an event than if they had provided one of each item for a silent auction. So it's a win win. But is it? If the guests who attend the event to support that charity feel they are misled by the process, is it really a win? There is a real risk of damage to the event and/or charity's brand. Trust can be eroded if event guests feel they haven't received full disclosure. If they return to the same fundraising event the following year, there's every chance they will be far more circumspect in their bidding. This can reduce the potential funds raised for the charity.


While there's nothing inherently wrong with sealed bids, its important that guests are made fully aware of the terms under which they are bidding. If you feel it's not the right approach for your event, think about the live or silent auction as an alternative.                              





GalaBid is CrowdComms’ fundraising software, developed inhouse, which facilitates bidding, donations, purchases, payment for and management of all fundraising activities before and during live fundraising events, galas, golf days etc.