Part auction, part raffle, part fundraiser, part promotional vehicle, a quarter auction is a whirl of activity that can be both fun and profitable. You may also have heard them called a quarter fundraiser, quartermania or paddle parties. As the names suggest, participants bid with quarters on items they hope to win and hold up a numbered paddle. All states that allow quarter auctions have laws that regulate them, and some local laws may apply too.

What Is a Quarter Auction?

A quarter auction is a fundraiser held for a charitable cause where participants bet quarters – typically from one to four – on items donated by businesses or individuals. It may also be called quartermania, explained Trisha Gutierrez of QMFundraising, who calls herself the Quartermania queen.

"A quartermania is a cross between an auction and a raffle," Gutierrez said. "When you check in and register you get a check-in bag that has a paddle with a number, and there's a chip that matches that number in the chip bucket."

Additional paddles can usually be purchased for an additional fee in the same way that Bingo players can buy several Bingo cards. Instead of chips, some quarter auctions use ping-pong balls because, after all, the paddles are often ping-pong paddles. This is why they're sometimes called paddle parties too.

As each item comes up for bid, the auctioneer describes it and states whether the bid is one, two, three or four quarters. Those who are interested place their quarters in the bin on the table where they're seated and raise their numbered paddle or paddles if they placed more than one bid. The auctioneer or her helper then pulls one ball or chip from the bin and announces the winning number.

The winner has to have bid on the item to win, however. If you hold paddle four but decide not to bid on the item and ball four is pulled from the bin, you don't win because you didn't bid on it. Instead, another ball is pulled from the bin, and that continues until there is a match between the randomly selected ball and a numbered paddle whose owner placed a bid. Once a winner has been declared, the winner collects the item, the quarters are collected from the bins on the tables and a new item comes up for bid.

At the end of the auction, all entrance fees and bids are tallied. Expenses such as the cost for the venue are paid, and the remainder of the proceeds are sent to the chosen charity. Most quarter auctions last several hours.

Are Quarter Auctions Legal?

This depends on your state and local laws. Most states consider quarter auctions to be a form of raffle and regulate them under their state gambling or raffle laws. Alabama and Hawaii ban raffles (and, therefore, quarter auctions) altogether. Most if not all other states require raffles such as quarter auctions to benefit charitable causes. Organizations must apply for and receive a permit to run the quarter auctions and must file paperwork after the auction. Before holding a quarter auction, be sure to check the laws in your state as well as your local county or city government.

"Be sure you're holding the quarter auction for a legitimate cause," advised Bobbi Anderson, whose organization Change4Vets held a quarter auction in Boonesboro, Maryland in October 2018 to buy food and Christmas gifts for homeless and needy veterans in hospitals and nursing homes in the surrounding area. She has attended quarter auctions held by others who did not always appear to donate most of their proceeds to charity, she noted.

How Quarter Auctions Benefit Businesses

If you have a for-profit business, you usually cannot legally hold a quarter auction to raise money for your business. So, how does a business benefit from a quarter auction? It's cheap publicity that is cheaper than advertising and good public relations because your business is recognized as one that supports the community or those in need. If you have a business that sells products or experiences, and you donate one or more products or experiences to be auctioned, your business will be mentioned in advertising done to promote the auction, and you should promote it as well. Send invitations to all your clients, business associates and friends and stress that it's for a worthy cause.

"Our vendor group holds quarter auctions to bring customers to our vendors and get their small businesses known in the community," explained Eileen Suszek, president of California City Sunshine Vendors and owner of Home Candle Maker. They have held quarter auctions to benefit the local animal shelter, Operation Backpack, Feed the Hungry and more.

At the auction, everyone in attendance sees and hears about your products and company. You can put flyers, brochures and business cards at the venue to increase your customer base. If you attend the auction, you'll be on hand to answer questions anyone may have, and you can get new leads for your mailing list. Meanwhile, the winners get to use or experience what you donated, and anyone near them will see it too. All it costs you is your cost for the products or services you donated.

Tips and Pitfalls

The biggest problem Suszek has found in running quarter auctions is, unfortunately, cheating, and she has seen many different kinds of cheating. "People not putting the quarters in the buckets and holding up paddles anyway. . . switching paddles if the number that was called is not the paddle they put up. . . taking money out of the bucket if they don't win. . . putting in nickels instead of quarters," Suszek explained. When vendors or board members see someone cheating, the procedure is to tell her and she handles it quietly. The fun spirit of the auction can continue uninterrupted.

Working with cooperative, reliable vendors is also key. “Make sure your vendors are donating good products,” advised Anderson, “so people will want to bid on them.” Many quarter auctions set a minimum dollar value on each item auctioned.

Vendors and even the charities should also help with publicity. Both should print and distribute flyers, sell tickets and talk it up on social media. The real ticket to a successful quarter auction is getting a lot of people in the seats. The more people who attend, the more quarters you'll stack up.