In earlier days you could just put up an auction and say it was for a charity and there was no policing or a way to determine if you really gave the money to the charity or not. Today, there are two ways to run a charity auction on eBay. One is by using the eBay Giving Works program operated by Mission Fish and the other is to run your own auction and donate all or part of the proceeds to the charity of your choice. Both have their pro and cons. Let’s take a look at each way:
eBay Giving Works enables you to list your items on eBay and donate part or the entire final sale price to your favorite nonprofit organizations. Unique search and listing features allow you to build your business while supporting causes important to you. To date, eBay sellers have raised more than $40 million for nonprofits through items sold on eBay. To donate, when you get to the Pictures and Details page of the eBay Sell Your Item form, look for the link that says “donate a percentage of sale.” This will bring up a list of approved nonprofit organizations you can donate to (there is also a link to add a nonprofit if your favorite one is not on the list).
If this is your first eBay Giving Works listing, you will be prompted to create a MissionFish account, provide your credit card information to guarantee payment of your donation, and consent to terms in the MissionFish User Agreement. After your item sells, collect payment from the buyer as usual. MissionFish will send you an email notification that includes the exact donation amount due and payment instructions. If you do not fulfill your commitment by the second Monday after your listing ends, MissionFish will charge your credit card. MissionFish then forwards the gift (minus $3.00 and a 2.9% credit card processing cost) to the designated nonprofit on the 20th of the second month after your listing has closed and issues you a tax receipt.
If you donated a portion of your proceeds to the charity you will still pay your eBay fees which unfortunately are not tax-deductible. If you donate all of it to the charity, eBay will waive the listing and final value fees. Beside the processing fee, the other problem occurs when you encounter a non-paying bidder which unfortunately occurs fairly often. You have to go through the whole non-paying bidder process, which 6 times out of 10 will earn you a negative feedback. Once eBay has credited your fees, you can now fill out another form with MissionFish and request a refund from them. If something went wrong with your transaction and you refunded a buyer’s money, MissionFish will still collect the minimum $10 donation.
Admittedly these are small drawbacks, but they do pose challenges to the seller. If you want to understand the program better, read the eBay Giving Works FAQs.
The other method is to run your own auction and donate the proceeds directly to the charity. However, there are some hoops you have to jump through to do this. First of all the organization has to be an IRS certified 501 3 (c) organization. That means they have to have filed their nonprofit status with the IRS and been approved.
Second, you need a letter from the organization and you need to scan the actual letter into your item description so eBay can see it. How do you get such a letter? Well this week I just called the local chapter of the Salvation Army and told the lady who answered the phone what I was trying to do and what I needed. She said she couldn’t do it locally, but would have someone from the national office call me. Within 15-minutes I had a call and 15-minutes later a letter of authorization came over my fax machine. It was really pretty simple. I didn’t have a scanner, but I took a good digital photo and used the Supersize option, so eBay could blow the image up large enough to read it and I was good to go. Running a charity auction is a great way to magnify the power of a donation as we saw after the Hurricane Katrina disaster. However, these charities need help year round, so don’t wait for something big-scale to happen on the news to get involved.