The Psychology of Charity Auctions

May 13, 2008

The Psychology of Charity Auctions

What makes a charity auction successful?

The marketing expert Seth Godin says the answer lies in the mindset of the bidders.

If they come to an auction looking for a bargain, the event will likely fall flat.

But if the event can get the bidders to want to overpay for items, it will likely exceed its target, Mr. Godin writes on Seth’s Blog.

Mr. Godin cites a recent auction by the Robin Hood Foundation in New York that raised more than $24-million for the organization as a prime example.

Fund raisers, of course, have to walk a tricky path to create an atmosphere in which bidders compete to overpay. But Mr. Godin says once that atmosphere exists, it tends to snowball.

“The challenge is to create social approval for what would otherwise be bad auction skills,” he writes. “Enlist a few stooges in the audience in advance, then start by auctioning off that $20 bill. When it goes for $45 and the winner gets an ovation, you’ve set a tone.”

Mr. Godin will take questions from Chronicle readers during a free online discussion on Tuesday, May 20, at noon Eastern time.

(To read about why many fund-raising auctions seem to be losing steam, see an article by Chronicle columnist Bob Levey.)

— Peter Panepento

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