By Shannon Belew, Joel Elad

From one point of view, a third-party auction — the “effortless” auction — is by far the easiest type for your organization to participate in. All you have to do is have your organization selected as a recipient charity. The auction itself is promoted and managed entirely from another company’s website. These companies continually auction off items and then ration the proceeds to their approved nonprofits. Two examples are BiddingForGood and eBay.

The philanthropic auction service BiddingForGood is essentially an online community working for nonprofits. It promotes an ongoing auction of items that include furniture, clothing, collectibles, event tickets, and even celebrity items, which are sold from its website.

After the auction for each item ends, the proceeds go to the charity that provided the item or that was selected to receive the proceeds from the item. The site can host an entire auction for one charity or raise money from single auction items and donations. So far, the site has helped raise more than $238 million for schools, communities, and national charitable organizations.

The eBay Giving Works program is open to any approved charitable organization. To date, the program has worked with over 25,000 organizations and raised more than $375 million from eBay auction items. It teamed up with PayPal Giving — an independent 501(c)(3), formerly known as MissionFish — to handle auction-management services.

For example, you must register and apply through PayPal Giving to be recognized as a legitimate charity. After you’re in the system, eBay sellers can choose to donate anywhere from 10 to 100 percent of an item’s winning bid to the charity of their choice.

When a seller agrees to donate even a portion of the auction item’s proceeds to your organization, a special ribbon icon is placed next to the item so that bidders know that the auction is part of a fundraiser or charitable donation. The ribbon icon is easy for bidders to spot.

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As a bonus, any seller can choose to donate to your cause by selecting it from a list of certified charitable organizations and then designating it as a donation item after listing it on eBay.

You don’t have to depend on the generosity of strangers. You can encourage your own members and longtime supporters to auction items on eBay and then donate the proceeds to your organization. Or you can become a direct seller and hold your own auction and list items for auction on your organization’s eBay page.

If hosting an online auction isn’t in the cards for you, consider placing a Donate Now button on your nonprofit’s page on eBay. You can allow cash donations of any amount, which are paid through PayPal.

When an item is auctioned for an approved nonprofit, eBay issues a credit for any listing fees and final value fees when the total donation is between 10 and 100 percent of the winning bid. A nominal administration charge and a credit card processing fee may also apply. Although this simple process is a favorable alternative to managing your own online auction, you have to consider a few other pros and cons:

  • Donation tracking: eBay offers a password-protected web page that reports all fundraising activity for both the seller and your organization. Because not all auction websites offer a donation-reporting feature, though, decide whether it’s a necessity for you.

  • Delivering donations: Every auction site has its own policy about when and how to deliver funds to your organization. For example, eBay transfers funds to your bank account, but you usually don’t see the donation for at least a month after the auction ends.

    Other auction websites send checks with final donation amounts, which are mailed either monthly or quarterly. Don’t count online auction proceeds from third parties as immediate revenue.

  • Confirm receipt: In most cases, the website (or a partner organization) that’s managing the auction takes responsibility for issuing tax receipts. However, always confirm that this is the case, and keep the site’s contact information nearby. If benefactors have trouble getting a receipt, you’ll know where to direct them for help.

  • Promoting the auction: As with any fundraiser, find out how auction items are promoted, and then ask whether the site offers other tools or resources to let your organization help promote the auction. Sometimes, you can do something as simple as add a logo to your website. Or perhaps e-mail-based tools can be used to prompt bidding.

eBay Giving Works offers several free fundraising resources, along with marketing tips to help increase online donations for your organization.