Article

SuperTopo Guide To Online Auctions For Causes and Non-Profits

Wednesday April 10, 2013 12:53pm
I have been doing eBay auctions for non-profits for 6 years now: April 2008 - December 2009 - April 2011 - April 2011

To date we have raised $100,000+, thanks in large part for you guys and matching from Planet Granite Gives Back.

It is now our goal to help other non-profits and causes run their own online auctions. We all have a lot of stuff we have not used anymore. If there is a way to collect that stuff, organize volunteers and run a successful auction, all that unused stuff turns into a lot of money for your cause.

This article is a free and continuously updated attempt to make the whole process as painless and effective as possible.

Now this isn't an entirely new idea. There are organizations that offer auction services for non-profits. But from my research, those organizations generally have three drawbacks:
 they generally take a big percentage of the auction
 they often just expose auctions to a smaller user base instead of a giant user base like eBay and therefor auctions don't raise as much money as their potential
 they don't encourage members of the non-profit to donate items and instead rely more on soliciting companies for new products. In this way, they:
- miss out on engaging as much with their members
- members miss out on the tax benefits of donating gear to charity
- everyone misses the environmental benefit of taking stuff that probably isn't being used and putting it back into use: i.e. They miss the chance to promote the "Re-Use Economy".

In summary
The goal is that this "SuperTopo Guide To Online Auctions For Causes" will help many non-profits of all types take unused stuff from their supporters, promote the re-use economy, and raise money for their missions.


SuperTopo Guide To Online Auctions

Step 1 - Get get rid of your crap: be honest, if you have not used it in a year, do you really need it?
Make a list of all the spaces you want to scour: garage, basement, storage locker etc. Prioritize each area in order of most likely to yield good stuff.

IMPORTANT: Remove the all the stuff into an open area. It is essential to get everything out. Yes, every last thing. If you don't you will hold onto stuff you don't use.

Make four piles:
1 Trash
2 Recycling
3 Stuff you have used in the last year and want to keep.
4 Stuff you have not used in the last year.
Pile 4 now gets divided up.
- Stuff you are ready to get rid of and can likely be sold for more than $X0.00* and easily fits in a box**. This stuff goes to your auction)
- Stuff you are ready to get rid of and can likely be sold for less than $X0.00* This stuff gets donated to Goodwill, cancer society, etc

* The amount is subject. For some people/non-profits, $X0.00 is $50 which means that if it is worth less than $50, it is just not worth the hassle to deal with. For other people, $25 is the amount.

** If it does not easily fit in a box 24 x 24 x 24 or smaller, it will likely be a pain to sell online. Shipping will be expensive and cumbersome. You can either sell things on eBay with a "local pick up only" option or sell on craigslist or just give the item away unless it has a lot of value.

How do you find out the eBay/auction value of something? Go to http://ebay.com and enter your item name into the search box. Next, scroll down the left column, to "Show Only" and check the box "Completed listings." The numbers with green results actually sold (red prices did not sell because they were likely over priced).

Step 2 Get donations from the community
Send out emails to anyone that has items to auction off. Look for items worth well more than *$X0.00 that can be easily shipped. The bigger ticket the item the better. Unique experiences (climbing El Capitan with a superstar) or vacation rentals can often raise $500-1,000.

Step 3 Run The Ebay Auction
There are many great books that go into this in much more detail and here is a great podcast. Below is just a cheat sheet of the most simple way I have found. If you have suggestions on how to make this process more efficient, please email me or post below.

A) Get an ebay User id. If you are doing a big auction, you want to make sure your user ID has some feedback. More positive feedback = more confidence from buyers. How do you get feedback? Tip Start by selling your least expensive things first. For some odd reason, eBay gives your feedback score the same weight whether you sell $2 t-shirts of $20,000 cars. Alternatively, you can buy a bunch of inexpensive things on eBay to raise your feedback score.

B) Have the non-profit get a PayPal account. Go through all the steps to get as verified as possible. This way, at the end of the auction, all the money goes directly to the non-profit and does not need to be transferred around (which can incur transaction costs and is less trusted than paying directly to a non-profit).

C) Create a spreadsheet with all the item details. Google Drive (formerly Google Docs) is a great way to create a document everyone can easily share and update. Here is a sample spreadsheet for the October 9 Tommy Caldwell Auction

Sample spreadsheet for an ebay online auction for non-profits.
Sample spreadsheet for an ebay online auction for non-profits.
Credit: Chris McNamara

D) Get the free eBay App for iPhone, Android, iPad etc. We just recently started using this and its a game changer. The most annoying part of the eBay listing process is managing photo uploads and the eBay app massively streamlines this process. Fast is key because the longer this process takes, the less likely you are to actually do it.

There are two ways to use the app:
 1 - Only use the app - this is the fastest way to list an item. However, it can be a pain to do much typing on a smart phone and it is a pain to have other browser windows open to cut and paste text etc.
 2 - Use a combo of the app and eBay on your computer. This is what we mainly do. We will use the app to get photos and fill in some details, and then we wills schedule the auction to start 12-24 hours later. In those next 24 hours, you can go into your desktop computer and do the fine tuning there.

E) Taking photos. Get a big white background: a white bed sheet gets you 80% of the way there or go pro and get a big white seamless background. Take photos in a place with lots of natural light (but no direct sunlight). The shaded side of a building or under a frosted skylight is ideal. I have spent sooooo much time trying to make products look great using artificial light using studio lighting kits like this. It is really hard to consistently get good colors and no shadows. Don't bother. Use natural light.

Ebay photo studio and gear organizing kit ready for an online auction.
Ebay photo studio and gear organizing kit ready for an online auction.
Credit: Chris McNamara

F) Figure out shipping. This is the crux and the reason so many people avoid online auctions. I generally ship USPS for items less than 5 pounds and FedEx UPS for items 5Lb+. I charge exactly what it costs me as nobody likes getting gouged for shipping. But many eBay experts feel you have the right to charge a few extra dollars for your handling time. I have this 50lb scale.

I really encourage adding international shipping to items that costs $20 or less to ship internationally. The downside is that only economical way to ship is USPS and their international tracking is lacking or nonexistent. So eventually something will get lost or the buyer will just claim it is lost and hope you refund them. This is a pain and will cost you money. HOWEVER, when you average this out over many auctions, you come out way ahead by opening your auctions to international buyers.

2 Recommended Shipping Options
1 - PayPal's shipping option makes it very easy to ship with USPS or UPS and track (no FedEx). As soon as someone pays, you just go into PayPal and click on the button to ship. You then get walked through the process.

2 - Endicia For Mac. I use Endicia because it is faster: you just cut and paste the address and hit print. But if you are not shipping a lot, by far the easiest option is to use PayPal. Endicia is also the fastest way I have found to calculate shipping for listing items. Using calculators and online shipping on USPS.com adds in a lot of steps... and its all about efficiency in this game!

G) Starting Time. The short answer: Sunday-Thursday between 6-8 PM. The real answer is that it depends on what you are selling. The only way to find the best time is to sell a lot of the same stuff at different times and collect data.

H) Starting Price. I generally list things for the absolute smallest amount I would accept for an item and still by happy. A more scientific and time-consuming but profitable way is to research what your item has been selling for recently (see how to search completed listings above), find the average, and list it a little below the average if you want your item to sell on the first go. List it above the average if you are willing to relist your auction again and again if it does not sell (and willing to pay some extra feeds to do so).

Step 4 Promote the auction
The beauty of a place like eBay, is that a major audience/market exists already. So this is not the most important place to put time (much better to double down on time spent finding items to auction). That said, never hurts to post all over forums, Facebook, Twitter, blogs, etc

Step 5
Collect the money with PayPal.

Step 6
Ship the items and get the money to the causes. Shipping is a big pain for most people. If you live near San Rafael, California, I will gladly donate boxes and packing materials to any only auctions for non-profits. Otherwise, you will need to collect boxes or buy them. If you are going to buy boxes, the best deal I found is Uline.com

Spread the word about this process. Tell other causes and non profits how they can raise money for their mission.

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Chris McNamara
About the Author
Climbing Magazine once computed that three percent of Chris McNamara’s life on Earth had been spent on the face of El Capitan – an accomplishment that left friends and family pondering Chris’s sanity. He has climbed El Capitan more than 70 times and holds nine big wall speed climbing records. In 1998 Chris did the first Girdle Traverse of El Capitan, an epic 75-pitch route that begs the question, “Why?”

Outside Magazine called Chris one of “the world’s finest aid climbers.” He is the winner of the 1999 Bates Award from the American Alpine Club and founder of the American Safe Climbing Association, a nonprofit group that has replaced over 5000 dangerous anchor bolts. He is a graduate of UC Berkeley and serves on the board of the ASCA and the Rowell Legacy Committee. He has a rarely updated adventure journal, maintains BASEjumpingmovies.com, and also runs a Lake Tahoe home rental business.

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Mighty Hiker

climber
Outside the Asylum
  Sep 6, 2012 - 12:25am PT
Hey, that's why we pay you the big bucks, isn't it?

This is an excellent idea. Around here, many charities (= 501 (c)(3)) have thrift stores, run largely by volunteers. You can give them almost anything, mostly domestic stuff, and they'll sell it. Probably 10 - 20 cents on the dollar, in terms of original sale price, but OK by garage/rummage sale prices. The charity gets the money, less operating expenses.

This is much the same thing, except focused on outdoor gear, and conducted at a distance rather than in person, so adding some logistics. Donate some good stuff, the charity benefits, the gear gets reused.

Chris, I don't know US tax law - can this be set up so that people donate the stuff and get a donation receipt? Would it be easier to ask that people ship the stuff to a central location(s)? That might also help weed out junk. Although if the sellers and buyers take on all the effort, then the charity gets the cash, that makes less work for the charity, plus presumably the seller could at least get a receipt for the sale amount.

(Plus there's those dreary sport-consignment places, full of hot stuff.)
Chris McNamara

SuperTopo staff member
Author's Reply  Sep 6, 2012 - 12:59am PT
Great questions/comments.

My experience with Goodwill (and I go there a lot both to purchase and donate) is that (as you point out) items are not selling for their full potential. You say .20 on the dollar which is probably accurate. This is because they are exposed to a smaller market. And then almost all of that .20 goes to pay the employees, rent etc. It is a good model for employing people and promoting the re-use economy, but it is not a great model for non-profits that want to raise serious money for their missions.

This idea is basically trying to take the "Annual School Fundraiser Model" and bring it to the web. Every year, many thousands of schools go to their community, get 50-200 items donated, throw a big party and auction things off. It is taking that model to the web where there are less transaction costs and the event doesnt need to just happen once a year. In addition, the Annual School Fundraiser model really makes most of its money of bigger ticket items. It would be a total pain to try and raise the type of money school need selling $20-50 items at a party (think of the silent auction space needed to raise 10's of 1,000's at $20 an item). But with the online model, less expensive items are much less of a pain. So more people can donate, bid, and buy.

Lastly, I personally have a lot of stuff in my garage in the $100 value range that I have not used in years. It is worth too much for me to just give away. But not worth enough that I want to necessarily sell it. But if I knew i could get a tax deduction for donating it AND that the money sold would go to a non-profit I believed in, I would gladly give it away (which is what I do at all these charity auctions I run ;)

Great tax question, any accountants in the house? My understanding: if you donate anything to a on profit, they then give you a gift letter. The IRS has rules on how much you can deduct for each category. But I need to research this more... hopefully with your help!
Fish Finder

Social climber
  Sep 6, 2012 - 11:46am PT
Maybe this will help...
poached from the web




According to the Internal Revenue Service, a taxpayer can deduct the fair market value of clothing and household goods. Fair market value is defined as "the price at which property would change hands between a willing buyer and a willing seller, neither having to buy or sell, and both having reasonable knowledge of all the relevant facts."

But the IRS doesn't have an exact formula or method for you to establish fair market values, so what you write down is completely subjective. The IRS does, however, offer vague guidelines.

With regards to fair market value, Ken Hubenak of the IRS Media Relations office says, "It's something YOU have to determine. All the main rules are laid out in Publication 561, Determining the Value of Donated Property and Publication 526, Charitable Contributions."

A former IRS agent who can speak more freely, but asked to remain anonymous, adds, "a sweater is a sweater. It doesn't matter if it was a $2,000 sweater from Nieman Marcus or a $20 sweater from Kmart." He adds that most donated clothing goes to homeless people, so they don't care where the sweater came from.

By following these guidelines, you'll be able to receive maximum tax benefits when donating used clothing and household goods.

1. Give your items to a qualified organization -- an organization that has a tax-exempt status with the IRS. To find out if the organization is qualified:

Ask the charity if the IRS has qualified it.
Read the charity's literature to ensure that it is fully recognized by the IRS.
Check IRS Publication 78, Cumulative List of Organizations, which lists most qualified organizations.

2. Assign a fair market value to the items that you're donating.

You can't claim a fair market value that is more than the original cost of that item.
CFP Ken Pikor of Westerville, Ohio, who is also an "enrolled agent" (someone who can represent taxpayers before all administrative levels of the IRS) says, "If you happen to be like my wife who saves all her clothing receipts and files them, a good rule to follow when valuating used clothing/items, is to use 25 percent of the original purchase price as a guide when determining the donated value."

3. Keep a detailed record of your donated items, including:

The number of items and the condition they're in.
The dates you received or bought the items -- if you don't know exact dates, use approximate dates.
The original purchase prices.
A quick snapshot or video of the items you're donating -- this will substantiate your contribution if questions ever arise. Keep the visual record with your tax records.
Signed and dated receipts from the organization receiving your donations -- when Goodwill asks you, "Do you want a receipt?" say "yes."

4. Report your charitable deductions on Schedule A of Form 1040.

5. The value of your charitable deductions can't be more than 50 percent of your adjusted gross income in any single year. Donations exceeding the 50 percent limit can be carried forward to future years.

6. When you donate more than $500 worth of goods to charity, you must include Form 8283, Noncash Charitable Contributions, with your tax return.

7. If your claimed deduction is more than $5,000, you must get an appraisal from a qualified appraiser and attach an appraisal summary (Section B of Form 8283) to your tax return. A qualified appraiser is someone authorized to complete Part III, Declaration of Appraiser, of Section B.

Dealing with large donations
You may be thinking that a donation of more than $5,000 is out of your league. But consider this, if a relative dies or moves into a nursing home, donating their sheets and towels, furniture and kitchen utensils, may be the most practical way of cleaning up. The total fair market value of a large donation like that could easily top $5,000.

The best way to deal with an extraordinarily large donation, says Peter Jason Riley, a CPA in Newburyport, Mass., "is to put a note on your return, claiming that it's a donation from a deceased person or an estate situation.

Edit: article is from 2000 so the numbers may have changed a bit
Chris McNamara

SuperTopo staff member
Author's Reply  Sep 6, 2012 - 11:31am PT
Thanks fishfinder, can you send me the link where you poached that? (so I can add a link in the document)
looking sketchy there...

Social climber
Lassitude 33
  Sep 6, 2012 - 12:35pm PT
Chris,

For smaller items (smaller than 8 x 10 inches) that are not more than 3 or 4 inches thick, a flatbed scanner is far superior to using a camera or camera phone. For thick items, just drape a dark towel or put a box over it and the scanner. The results are surprisingly good.

Scanned images are high quality and immediately on the hard drive. They can be quickly cropped, edited, etc. -- or simply uploaded to Ebay "as is" with no editing at all

I recommend uploading larger images (at least 1600 x 1600) into the Ebay auction as they can be enlarged for easy viewing by prospective Buyers (this Ebay photo feature is usually free). Big pictures that are in focus will solicit more bidders -- the item's picture is often the single most important item in a listing and usually what prospective bidders examine first.
Don Paul

Big Wall climber
Aurora Colorado
  Sep 6, 2012 - 12:46pm PT
What about setting up one paypal account where the money goes, and people could put their items on ebay and have the money directly go into your charity account? Is this possible? Ebay would know. I think that would be a good model to use to get people to make in-kind donations.

As for tax deductions, I think people only need a receipt if its over $500 that they want to deduct. Ask a tax attorney or accountant. Chris if you are going to be the conduit for this money you may want to create legal entity to take yourself and your personal finances out of the legal loop. I am not licensed in CA so can't help. But setting up a non profit is a pain, and the tax filings are complicated, so I don't really recommend you do that yourself.
Fish Finder

Social climber
  Sep 6, 2012 - 01:46pm PT
When listing an auction on ebay there is a window were you can type in and change what paypal account (email address) you want the payment to go to .

Having all funds go to a general spot is best.

Everytime money changes hands on Paypal the recipient is charged 4%

If you sell on Ebay to your paypal account then transfer the money to the charity's Paypal , 8% is gone

Also be aware that when selling on Ebay there are listing fees and final sales fees.

These are billed to your Ebay account and have nothing to do with the money received in Paypal from selling items.

Clothing final sale fee is like 12% and other type items start at around 4-6 percent of the final sale.


Edit: C-Mac , links are sent
Mighty Hiker

climber
Outside the Asylum
  Sep 6, 2012 - 08:09pm PT
Perhaps those of us interested in this, and also in the "help a distressed climber" fund idea, should talk about this at the FaceLift?
jamesprepatrip

Social climber
Oakland, CA
  Sep 11, 2012 - 12:53pm PT
I love the idea, it's great! Having a trued and tested model would be a great resource for many nonprofits.

I feel like running a virtual auction is great and that many nonprofits could take advantage of it, however there are a couple of factors that "could go wrong" which would prohibit some from taking advantage of this model:

1) Not tech savvy and get through the steps of basically a) filling out info b) taking photos c) Listing it on ebay

You're totally right, its important to make this step as easy as possible and what you mentioned is a lot of steps in many different systems. If this could be streamlined through a mobile app or website, oh man, it would make the world of difference. As mentioned, there are so many thrift stores for nonprofits already, they would kill for an easy way to upload their items to ebay or some website. Imagine, the tool could help nonprofits already doing auctions / donation sales. Personally, I always want to know what new hot stuff my local thrift store has just acquired, but their tech is always lacking. The question I have now, whats out there that they're currently using?

2) Shipping items after purchase

I don't think there's any solution to this part, shipping anything is a pain in the butt. Just good 'ol peppy leadership and feelings for good can get over this speed hump!

Once you get the guide, put some fancy design in it, and I'd love to help you spread the word in the nonprofit space =) The nonprofit space LOVES tech and the Nonprofit Tech Conferences, as surprising as this might sound, are LACKING it and are always looking for new ways to FUNDRAISE.

Cheers man,
James
Chris McNamara

SuperTopo staff member
Author's Reply  Sep 19, 2012 - 09:08am PT
James, I totally agree with both your points. Those are two of the biggest hurdles. I think a big help is to have a dedicated ebay space like I have in the SuperTopo warehouse (Photo below shows the white photo background and shelving to organize the items.

Ebay photo studio and gear organizing kit ready for an online auction.
Ebay photo studio and gear organizing kit ready for an online auction.
Credit: Chris McNamara

Around the corner is a packing and shipping station.

Steve in Shipping posing next to the days big shipment. Location: Glob...
Steve in Shipping posing next to the days big shipment. Location: Global Taco HQ
Credit: Chris McNamara

I am also lucky in that the post office is less than a football field away. Even better, I can just toss stuff onto their loading doc (no need to park, make shuttle runs through their door). So it is a really ideal place for cutting out the hassles of shipping.

A is my warehouse and the upper left corner is the post office loading...
A is my warehouse and the upper left corner is the post office loading dock.
Credit: Chris McNamara

I actually just lost my co-tenant. So I may only temporarily have this extra space. But one idea I have had is to dedicate this space to non-profits so they can do their own auctions. It could work like this: each non profit gets to use the space for two weeks while they organize the items, ship, sell and package the products. Then another non-profit gets to use it. That idea was just inspired by your post... so there may be some kinks to work out... but I think it could be cool!
Jon Beck

Trad climber
Oceanside
  Sep 18, 2012 - 07:36pm PT
I have been selling on Ebay for 15 years and think it is perfect for small nonprofits. Maybe a distributed selling model. People donate an item and provide pictures and a description of the item. Somebody else, anywhere in the world creates the listing, item sells and the former owner ships it. No need for any space. You could also do it the conventional way. Hook up with a group, say the Sierra Club as a source of donations. You can do a lot of selling out of a small space. The excess donations that can not be sold on Ebay go on craigslist or to the swap meet.

I can write up a good section on shipping for you.
Chris McNamara

SuperTopo staff member
Author's Reply  Sep 19, 2012 - 09:27am PT
Jon, great suggestion and something Ill try and find a way to try out. Would love any shipping tips/article on how to ship efficiently!

Also, so far the donations from SuperTopo/ASCA supporters have been pretty slow. Any suggestions on how to inspire donations would be much appreciated! And for the moment, unless it makes me go broke, I can offer free shipping of donated items. You would just need to box up what you are shipping, i would email a FedEx Ground label, and you would drop off at a FedEx ship center/drop off spot. Just email me and I will work it out.

And maybe a I need a better list of items to donate. Small electronics (phones, cameras, ipods, etc) in great working condition) are really easy because they are cheap to ship and their is a big market. Old iphones are particularly great because their is a HUGE international market for them. For outerwear, anything with an internationally known brand has sold well.
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