BiddingForGood Aims to Streamline Donation Requests and Boost Charity Auction Pool
Jon Carson describes the newest offering on his website, BiddingForGood.com, as the idea he is most proud of in his “entire startup life.”
“It solves a real problem. It makes something efficient,” says Carson, whose previous entrepreneurial efforts include a keg delivery startup he ran while at Babson College, and FamilyEducation Network, a Web portal he sold to Pearson Education.
The “something” Carson aims to make more efficient is the process of requesting items from businesses for charity auctions or fundraising events. Both sides have complaints about the process, he says. Most merchants—typically restaurants and hotels—solicited for donations to charity auctions have no way of efficiently organizing and responding to the myriad requests they get for things like gift certificates and complimentary stays. Charities often submit their requests with missing information and in turn complain that they never hear back on their queries, Carson says
Cambridge, MA-based BiddingForGood, which Carson describes as an eBay for charity auctions, is trying to improve this situation with the release of its Auction Item Request System (AIRS). The system creates forms that a charity seeking a donation can fill out on a business’ website, detailing specifically what it wants for its auction, and all of its contact information. The AIRS system responds immediately with an automated e-mail confirming the company’s receipt of the donation request, and later on with an e-mail either approving or denying the solicitation. It’s being used by businesses such as Boston’s Liberty Hotel, The Four Seasons, retailer Brooks Brothers, and San Francisco’s Aquarium of the Bay.
If the BiddingForGood website is the eBay of charity auctions, then the AIRS segment of the business is the OpenTable of donation requests, Carson says, transforming what was previously a loose leaf tracking process to a centralized database. Donors can track the groups they’ve aided, the dollar value of their donations, and the exposure of their products at the auctions.
BiddingForGood is giving its AIRS product to businesses for free, because it’s solving a problem for BiddingForGood, too, Carson says. It helps the startup consolidate the list of nonprofits and auction donors out there, a pool it depends on for its revenue stream (more on that in a moment). “The market is very fragmented,” Carson says, explaining that most charity auctions are run by volunteers with high turnover. His sales team can chase after potential customers when they request an item using the AIRS system, which also advertises BiddingForGood’s other services and allows users to directly request information on the company.
Originally named cMarket and backed by Canaan Partners and Morningside Technology Ventures, the company started in 2003 as a way to more efficiently execute silent auctions for charities. It originally hosted online versions of real-world silent auctions, often a week or so before the actual charity event in order to open them to a wider pool of bidders. The startup eventually noticed the high volume of bids it generated for hot items (like Red Sox tickets) and added a search function to allow users to seek out particular items. The company redesigned its site to be more consumer-focused in 2006 and officially renamed itself to BiddingForGood last fall.
BiddingForGood charges each nonprofit organization or school that uses its services an annual subscription fee of $595. It also takes a small cut of the cash charities raise from auction items they put up on the site. The charity auction site, which sold more than $30 million in merchandise in 2009 and now boasts nearly 160,000 registered bidders, has also evolved since its inception to harness the advertising potential of charity auctions and target new donor vendors. “We had this revelation that charity auctions were sort of like a media platform. They reached a very defined demographic,” Carson says, namely affluent Baby Boomers, typically female.
This realization prompted the business to begin soliciting donations from companies in exchange for prime, targeted advertising on the site, and placing them into charity auctions. BiddingForGood has two full-time employees dedicated to finding items for donation and placement on the auctions it hosts, and takes a 33 percent cut of these items’ final auction price.
The website also sends e-mails on behalf of the advertisers to the nonprofit auctions’ second-highest bidders, who usually go by the wayside in traditional auction settings. “The losing bidders were a place of economic leakage,” Carson says. “They had gotten a pat on the back and were sent home, but they had bid real money and that brand probably would have cared about them.” The website also features auction items that have the potential for upselling—for example, a user who wins an auction for a four-day stay at a resort may opt to pay the resort for a couple of extra days.
Helping business find advertising and other value in charitable donation has become more important in the recession. “Item donors want to see the marketing value now because the economy is tough. The charitable side is being cut back,” Carson says.
Which brings us back to the AIRS system. Using it, businesses can track how many people are likely seeing their donated items, since charities must fill out the number of bidders they anticipate at their auctions. The donation request form also contains a line at the bottom where users can indicate if they want more information about the donor’s products or services—this option has been selected in more than half of the Liberty Hotel’s donation requests, Carson says. “As a marketer, there’s not much more I can do than deliver paying customers right to them.”