Is Flipping A Charity Auction Item Going Too Far?

Our son’s preschool has run a charity auction for a number of years, I believe this was the 12th year.  Being that this is his first year, and our first year involved with the school, we were excited to see what it was all about.

The goal was to raise $5,000 toward the school.  This helps keep the costs relatively low, as well as the fact that it’s a co-op, so they have less staff being that the parents participate.

The auction consisted of two different elements, one was buying tickets, and then putting them in buckets corresponding to certain prize draws.  Some of the items included:

  • A package of Disney DVDs, games, figurines, and other assorted goods
  • A basket of wine, liquor, and other assorted ‘adult’ goodies
  • Gift cards to Target, Kroger, or other big stores
  • Gift cards to local restaurants
  • A box of Twinkies

So, you can see that the prizes were far ranging.  All were in great fun.

The second item was a silent auction.  Here, about 75 items, all donated by local businesses or friends of the school, were available where you could write your name next to a line on a sheet of paper.  The person who got the highest bid won.  In many cases, the ‘value’ of the item was listed, as it would be the value of the item if it were sold at regular price.

Many items sold at or near their value.  Some sold way below.  We actually got a four-pack of tickets to a Detroit Pistons game, and two activity centers for children for $25, where this probably would have cost over $100.

Again, the items here were all over the map in terms of pricing.  The two highest ‘valued’ items were the ones that caught my eye.

  1. A bundle consisting of a brand new Wii U, a controller, a game, and some other accessories
  2. A four pack of park hopper tickets to Disney World.

Both had assigned values right around $500.  And both caught my eye, not because I wanted them, but because I thought that they could be valuable.

I even whipped out my smartphone to look and see what these types of items were selling for on eBay.  The Wii U pack was selling for around $400 on eBay.  It ended up selling for $410, so it was around the correct value.

The Disney tickets were selling for around $100 per ticket.  The ‘retail value’ was $124 per ticket, so anything less than $400 was a potential opportunity.

I mentioned it to my wife, and she was aghast.  She didn’t think that it was right to make money off of a charity auction.  I pointed out that the school didn’t pay for the items, and that if I bid for them, they would actually get more money, since I would be bidding higher than the person who had won them.

Really, would the school care what the use of the tickets was or were they interested in the proceeds of those tickets?  I guess there might be some element of both.

My wife ended up looking at the name on the list, and noting that the person with the highest bid (who ended up winning) was actually planning on using them for their family.  She prohibited me from writing my name, and kept a watchful eye.

Since the names of the winners (but not the final bid) were announced, I realized later that this could have reflected poorly on us.  If other members saw that we had purchased them, but then found out we never used them, they could have figured out that we flipped the tickets.  Since my wife didn’t think much of the practice, it’s certainly possible that others might not have as well.

In the end, it was an idea that I merely considered, but when my wife said no, I didn’t fight back at all.  Given the fact that it was for our son’s preschool and that it could have reflected poorly on our family, I’m glad I didn’t.

However, it brings to mind if this is an opportunity elsewhere.  After all, this was an event that was technically open to the public.  What if Joe Blow off the street had come in and done exactly what I had considered.  Joe would have had no affiliation to the school and therefore would never have been judged by other members.  Would he have been doing anything wrong if he had come in, outbid those who had placed bids, and gotten the tickets?  Technically, no, not at all.

So, maybe those charity auctions you see, maybe there’s an opportunity or two there.  Or does it still make it unscrupulous even if you aren’t affiliated with the actual organization throwing the charity?

Just curious what your thoughts were.  Is this crossing the line into being a vulture or completely within bounds?

And for the record, the package of tickets was listed at $270 moments before the auction closed, so they definitely went for below market price.

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34 thoughts on “Is Flipping A Charity Auction Item Going Too Far?

  1. You know, I can see where some people might look down at it. However, the other side of the coin is that the goal of the evening was to raise money for charity. If you would have paid more for the tickets, the charity would have raised more money – regardless of whether or not you profited from them. I probably wouldn’t have flipped them, but I don’t necessarily think it is wrong. The most important thing is to be comfortable with your decision. Since your wife wasn’t, I think you made the right decision.
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    • I probably wouldn’t flip them either but Greg makes a great point. I think they would get more money even if you did flip them… but then the question is, should you have paid what you expected to sell them for so the charity gets the full benefit? Either way they get more money but which fits your morals would be up to you.
      Lance @ Money Life and More recently posted..Call for Guest Posts and Maybe More!My Profile

    • That’s exactly the logic I used. I think when my wife saw that there were other people that would have used the tickets for their family, that became more important to her than the extra money the charity (and subsequently our family) would have received by engaging in the idea. I have no regrets. Was just curious about thoughts.

  2. I am struggling with a similiar dilemma. I attended an auction at DW’s church and bought a very nice “keyhole” desk. It’s in pretty good shape and is a pretty good name piece. Anyway I bid on the thing and get it pretty cheap. Take it home and of course we have no use for it. Go on line to get pricing and it’s worth 10 to 15 times what I paid for it. My thought is “sweet” …the church benefited from the money I paid AND I will benefit from being a smart shooper with a good eye….and lucky. DW doesn’t see it this way…The desk continues to rest in my living room awaiting it’s destiny. It’s a slippery slope….

    • What about if you sell it, make the profits, and then give some of those profits as a separate donation to the church?

      • Exactly! I did this with a book taken from the church library. (No, I didn’t steal it — the church decided to close the library and donate all the books. People had the chance to choose what they wanted before the books were given away.)
        Got the book free — got $19 and change for it on Amazon. But I gave every bit of the price-after-expenses back to the church. Figured they could use it.
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  3. Tell your wife to take a chill pill with a large glass of water and be happy that her husband is resourceful and inventive when it comes to ways to care for her and your children. :-) I think any flip of items is perfectly okay. Auctions, garbage picking, goodwill, whatever. If someone is going to give something away for free or cheap and you know it’s worth more, than you should sell it for more. I don’t see anything wrong with it at all whatsoever. You’re not making anyone do anything against their will, you’re not stealing anything from anyone, and you’re not decreasing anyone else’s profits.

    For the record, when I tell my wife to take a chill pill it doesn’t go over well. So maybe dont’ actually tell her that.
    TB at BlueCollarWorkman recently posted..The Mask of a Demolition ManMy Profile

  4. No, that’s not crossing any line. If something is sold at an auction, the value is whatever the bidders will pay. If you can buy it for less than retail and sell it at a higher price, good for you. The opportunity is the same for all those attending, so I see no problem with that.
    Jacob@CashCowCouple recently posted..5 Warning Signs That You Might Be Financially IlliterateMy Profile

    • Splitting the profit is the idea that came to mind as a reasonable compromise.

  5. I don’t really see the problem. You’re free to do whatever you want with what you buy. Use them, give them away, sell them. It seems a little bit underhanded to say you trawl charity auctions for flippable items, but people do that kind of thing at garage sales all the time. No one feels bad for giving some old lady two dollars for some old first edition book (or anything else) that they know to be worth 100X that.
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  6. I agree with your wife that you shouldn’t flip the item. Other families could see you weren’t using the item and feel cheated out of the chance at it. Plus you just look bad to the other parents and school. Now if you flipped it and gave the money to the school, then everyone might want to know your secret.

    Personally, I would feel like I was cheating the school or church or whatever organization that was doing a charity if I flipped the item. The whole point to those auctions is to make as much money as possible, not to make the new owner money.
    Financial Black Sheep recently posted..Lessons I am Learning Since Becoming Debt FreeMy Profile

    • I agree, it could open up a negative perception that might not be worth it in the long run.

  7. I can see both sides of the situation and can understand why it might b considered tacky to flip them. I don’t think I’d go in with the intention of purposely flipping an item, but if I discovered a good arbitrage opportunity then I would take advantage of it.
    John S @ Frugal Rules recently posted..The Cost of a Bad Credit ScoreMy Profile

  8. Whoa! Wait a minute! Who’s the auction for anyway? The charity or the lowlife friends wanting to mooch off the charity to get bargain tickets to DisneyWorld?

    Okay, maybe I exaggerated about the lowlife mooching, but seriously, if your bid put an extra $10 in the charity’s pocket, well, isn’t THAT the purpose of the whole deal? Anything that ends up with them getting more money is the correct thing to do. Why else do it?

    If the winning friends were that keen to go to DisneyWorld AND support the charity, why didn’t they bid full retail? If they bid anything under retail, they’re game to be taken out IMHO.

    And if you flip the tickets, and the charity gets MORE money, how is that so terrible? When we go to charity fund raisers, our mindset is to overpay, not underpay. If bargains are what you’re looking for, go to eBay or Groupon, not somebody desperately in need of money to do good things…
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  9. While I can understand where your wife is coming from, I don’t see any issue with it. The goal of the auction is to raise money. Why would anyone care what happens to the prize after the winner is announced? If you raise the money, then it doesn’t matter. People do this all of the time and I have done it a few times. No skin off my back!
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  10. I don’t think it is any different from buying things at a church garage sale and reselling them. I found a nice pair of almost unworn kids cleats at a church garage sale for $.50, just a few days before I was putting kids items in a local resale. I bought them, marked them at $8.00 and they were sold before I could even get in the door at the sale.

    The church made money off an item that was donated to them. I flipped it, and made money, too. Everyone wins.
    Mrs. 1500 recently posted..Thursday Rant: Paying $450 to look like a Fool!My Profile

  11. I think that if you buy them then they are yours to do what you wish. On the other hand I would not want to offend anybody by doing so. If you are affiliated with the organization and you have to work with those people in the future i would say that it is too risky. If you are Joe Schmo then do what you want, you bought them. It depends on your situation.
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  12. I would see no problem at all with flipping it. The auction made some money, you beat out other bidders and if you turn around and sell it for money, then so be it. The item is yours after all, you won it at the auction with your money. They likely won’t care what you do with it from that point. If it bothers you and it will be on your mind, then don’t do it but for me, If there is money to be made, I’m in! On the flip side a friend of ours buys clothes cheap and auctions them off on Facebook for a profit, she flips clothes. The highest bidders wins the item of clothing. It’s just the opposite way around I guess where the auctioneer is profiting.
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  13. That doesn’t make sense — I mean, Mrs. MB’s theory. It wouldn’t matter what you bid. The item is going to sell for the highest bid that someone at the auction makes. If the winning bid is under value, then the thing is sold for less than its retail value, one way or the other. What becomes of it after that has no bearing on how much the organization gets for it.

    The item was donated — that means given to the school for free — with the purpose of raising however much someone would pay for it, and the whole idea of a silent auction is that MAYBE you can snag something for a bargain while at the same time having the money you pay go to a worthy cause. Whatever the school gets for it is as much as it’s going to get for the thing. What you do with the object after you snag it won’t change that fact.

    Now, if you knew you could resell it on Ebay for significantly more than you paid for it, well…it would be gracious to pass the profit you made along to the organization. But it’s not required, either morally or ethically.
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    • Oh…and the fact that some people at the auction would use the tickets for their family? If they want it that badly, they’ll come back and outbid you. Chances are they have cell phones that let them see how much the tickets are really worth, too…
      Funny about Money recently posted..Hiking/Health UpdateMy Profile

    • I think she would have allowed it had she not known personally the people that had the highest bid and that won. At that point, there was a mix of the school getting the most, but also allowing the family to enjoy themselves that my wife knew would be happy with the tickets.

  14. While I can see both sides of it, I think that you weren’t morally wrong in your approach. Not that you need me or anyone else to say that, but that’s the bottom line question, right? Was it crossing the line, and I say no – your approach was okay. That was an arbitrage opportunity.

  15. I don’t see a problem with reselling something you buy, whether from a charity or wherever. I don’t think my husband would care either (he’s out right now or I’d ask). I think you did the right thing since it would have created a problem with your wife though. But I would have done it without even thinking about it too much, lol.
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  16. I agree with those who say “once it’s yours, do whatever you want with it.” The cause benefits no matter what because the items were donated and it’s pure profit.
    I was involved with a similar event at my nephews’ school a few weeks back: helped set up and clean up, donated two art prints (which brought in $135) and bid on a bunch of things in the silent auction. Although outbid on most, I did end up with a few items (all of which became gifts for others). It didn’t matter that the beauty academy facial was “valued” at $15 and I paid $7 — the school got the $7, my niece gets a chance at her first-ever facial and the beauty academy esthetician will get more practice toward the hours she needs for her license. Win-win.
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  17. I have bought things at charity auctions and won things in raffles that I turned around and sold. Just last week I bought $20 worth of raffle tickets at my doll club luncheon because I knew I could resell the items, and I won a few small things. Would the club have been better off if I hadn’t bought those tickets?
    If you had bought those things and flipped them and the other parents were resentful, it wouldn’t have been because you did anything wrong – it would have been their own envy – because YOU got the good deal and THEY didn’t.

    • Very true, but the dirty looks might have bothered my wife if that were the case (doubtful, but you never know).

  18. Speaking from the point of a charity (I am on the board of one that does a huge silent auction every summer with some high dollar items), we could care less who buys the item and what you do with it. They cost us nothing, so the more money we make the better. People bid and win on things all the time in the spur of the moment and then find they can’t use them. I think it’s perfectly fine to sell the item, and probably no one would even know unless you told them. However, it isn’t worth a fight, and your wife probably knows if there is someone who might take offense. Sometimes it’s better to err on the side of caution.
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    • Good perspective. I don’t think it was any worry about the school being upset, maybe more the other parents who my wife knew were actually planning on using the passes for their family.

  19. I can’t really see any line that is being crossed by flipping anything that is legally bought, won, acquired or found for a profit. The school is going to get a good amount for the tickets and it is even possible that person who buys the tickets on eBay (or wherever you sell them) enjoys them even more than the person at he auction would have. They are being used and appreciated either way.

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