Creating a Silent Auction Receipt (+ A Template That Includes All the Basics)
There are a variety of fun ways you can gather donations to benefit your nonprofit, not the least of which is through a silent auction. In the earliest planning stages, when you are gathering resources and coming up with ideas, it is best to have an arrangement for tracking your bids and donations. Part of this is the design and implementation plan for the silent auction receipts that you will send to your donors.
In this guide, we will give a quick overview of silent auction rules, share the requirements of creating and issuing receipts for your event, and even share an example of a receipt to use for inspiration.
- What is a Silent Auction?
- Why is a Silent Auction Receipt Important?
- How Can My Nonprofit Issue a Silent Auction Receipt?
- What Information is Required on a Silent Auction Receipt?
- Final Thoughts
What is a Silent Auction?
A silent auction is a type of fundraising event in which participants bid on a variety of merchandise, vacations, or entertainment experiences. Typically held in person at a venue, but more recently online or in a hybrid event with a website and live bids, it is a fun way to increase your organization’s revenue. Unlike traditional auctions, bidders make an offer on an item without knowing the amount others are bidding on that same item. In this way it resembles a raffle; you do not who else, or how many others, are going after what you want!
While we offer information on silent auction ideas, including how to set up and conduct one, in this guide we will focus more on the importance of creating and issuing receipts for your silent auction attendees.
Why is a Silent Auction Receipt Important?
As with any donation, it is essential that your nonprofit issue the proper follow-up documents, including the receipt for a winning silent auction bid. Quick acknowledgement of a donation or gift is an act of good faith between an organization and its supporters. Managing your event with silent auction software can build an even stronger level of trust, as it will issue automated branded receipts as soon as the sale goes through.
Tristan is intrigued on why silent auction receipts are important.
The receipt is also important to the donor for tax purposes. Contributions to a charity auction are considered a 501c donation, and are tax deductible according to the IRS.
How Can My Nonprofit Issue a Silent Auction Receipt?
After a sale goes through at a silent auction, your nonprofit can issue a receipt in a variety of ways, from the old-school sending of a letter or postcard through the post, to handing a copy over in person at an event, or by emailing a receipt. All of these options are legitimate.
However, in most cases today, nonprofits choose to send receipts to purchasers via automated email that is hosted by a nonprofit management software (like Springly!). Running a silent auction is far cheaper and simpler when managed from a donation platform, with less room for human error. Receipts sent through a software program follow this general process:
Payment for a silent auction item is made online by credit card
This transaction is processed in the nonprofit database
A branded receipt will be sent with all relevant information and a thank-you message. (You can design the aesthetics as well as the wording of your receipt through the software).
What Information is Required on a Silent Auction Receipt?
There are a few pieces of information that are necessary to include on a silent auction receipt. These include:
Legal name of the donor
Date of the contribution
The name of your nonprofit organization
FMV or fair market value of the item that the individual won in the bid
Total price paid toward that item
A description of the item received in return for the bid (donation)
Other information that is good to have on your charity auction receipt:
Your nonprofit logo
The organization’s IRS issued employee ID number
Last, but absolutely not least, thank your purchaser for their donation. Although not legally required, we consider this an essential.
Issuing a silent auction receipt is an essential factor of running an online auction fundraiser. While it offers your purchasers the option of claiming a tax deduction for their gift, it also creates a bond of trust and acts as an example of good faith between donor and organization. Your best bet is to manage your silent auction through a specialized nonprofit software that will process donations and automate personalized receipts that are sent out immediately. However, we have also created a template that includes all the basics listed above to simplify the process if you are generating your receipts manually.
💡How do I account for donated items at auction?
You may account for donated items through written accounts and receipts, though we recommend using nonprofit management software. Automation of inventory tracking makes the job both easier and more accurate. Find out more.
🔑Is silent auction tax deductible?
It can be. Deductibility of a purchase will depend on the eligibility of the donor, so watch the language on your receipt. You should state that their donation “may” be deductible, if they are considered eligible. Find out more.
📝What are the rules for a silent auction?
- Some rules to consider for a silent auction include:
- All sales final
- Limits may apply
- Right to change items
- Bidder assumes all risks
- Age restrictions may apply
- No additional bids may be placed after close of bidding