How Does a Charity Auction Work?

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A charity auction can be use to aid a person or group in need. They are used to benefit youth foundations, to create scholarship opportunities, raise money for medical research and to assist countless other organizations. The idea behind charity is to give genorously to others who are less fortunate. Because anyone can find themselves under this umbrella in his lifetime, it is always a good thing to be a part of some kind of charitable organization. Even if you are unable to donate money, you can be charitable with your time and talents.

Giving Back

A charity auction is a great way to raise money and awareness. This kind of fundraiser has been very successful for communities and non-profits for many years. The more well-known organizations have the ability to ask big businesses to donate items or merchandise to be auctioned off at the charity auction. Also, certain businesses will set up its own storefront (trunk show) at charity auctions, (on and offline), and the sponsor will donate a portion of the proceeds to the designated cause. A charity auction allows everyone to win--the purchaser is giving to charity, while at the same time getting an item she wants.

How Charity Auctions Work

There are a few different types of charity auctions, but most are either, live or silent. Most auctions provide a list of items to be auctioned off before the auction begins to build anticipation in the partipants. Live auctions can be theme based, meaning items are related to the cause it will benefit. This type of auction is generally used for high-priced items that will be auctioned off at a fraction of its real cost. Silent auctions will have the items and the merchandise displayed during a charity auction, but the participants can bid whenever they wish. For privacy, the bidder will be given a number or his signature may be used, and he is allowed to place his bid on bid sheets located near the merchandise he wants to purchase.

Celebrities Give Back, Too

In 2007, "Seventeen Magazine" donated the outfits and accessories of 17 of the hottest entertainers to a charity auction that would benefit the Make-A-Wish Foundation, a charity that grants one wish of a terminally ill child. During the relief efforts for Hurricane Katrina, eBay was inundated by musicians who wanted to auction off items at the eBay Giving Works Charity Auction, the organization put in place to help the victims of the disaster.

Tax Deductible

Most charitable donations are tax deductible. In addition, items won at a charity auction, where more money was paid for an item than its worth, can be deducted from the purchaser's income tax if they can provide proof that the value of the item was much less than the purchase price, meaning he will be allowed to claim the excess paid as a charitable contribution.