Should you cancel? Coronavirus (COVID-19) and your auction

I was going to share some thoughts about school class art projects today.  But that was before one of my Kansas City readers asked a question about the coronavirus disease 2019 (COVID-19).

“I’m curious,” she wrote, “if you have any events canceling or postponing because of the coronavirus? What are their contingency plans?”

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When news of COVID-19 broke, I initially thought I’d not write anything publicly.  Focused attention on any subject allows it to gain strength, and I am certainly encouraging wider attention to the virus on a public blog.

Yet on a small scale, I have been sharing updates with clients.

Here are some insights that might help you.

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Has anyone cancelled their auction because of the coronavirus?

On the West coast which has served as the epicenter of COVID-19 in the USA, I’ve heard of many events being cancelled.  I speak more to that at the end of this post.

But among my client base, which is primarily east of the Mississippi River, only one Ohio nonprofit has thus far cancelled.

That said, the group isn’t your “typical” nonprofit.  Nor was it a “typical” gala.

The fundraiser takes place at a national conference for women affected with a rare disease of the lungs.  Many of these women are on oxygen.   Their fundraiser gala would have been the final night of the group’s 3-day conference.

I’d say if anyone is going to cancel, it would be a group of health-compromised women with lung disease traveling from all over the USA.

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Has any group talked to you about canceling because of COVID-19?

Yes, some have talked to me.

And I suspect one or two clients might cancel soon, depending on how the outbreak spreads this week.

For instance, one D.C.-area nonprofit is running into problems with its 3-day national conference, scheduled for late March.  They have issues similar to the other group I mentioned because the association is filled with members working in healthcare.

Many of these member companies have issued “no travel” policies, which now means registrants for the conference can no longer attend.

The group will soon make a decision to forge ahead or retreat.

Right now, they are forging ahead.

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What if we postpone the event?  Not cancel, but postpone until COVID-19 settles down?  

I have one client who is seeking to postpone.  She runs a mid-week breakfast auction.  She and I had no problems finding many mid-week dates that work for both her schedule and mine.

If she was seeking an available Friday or Saturday night on my calendar, we’d have problems.

But wait — let’s stop and think about this. With a virus, I’m not sure a “postponement” is relevant.

How can you safely pick a rescheduled date if you don’t know when the virus is going to be over?

In her case, the guests are mid-to-senior level financial execs.  Most of their employers have put in a “not larger than 10 person meeting” limit on their employees.

To  eliminate any anxiety, she’s looking to postpone her event by one month, moving it deeper into summer.  Given these guests work in the finance industry, she’s hoping the virus AND stock market will have calmed by then.

Generally speaking, I recommend “all or nothing.”

Either hold the gala or cancel. Don’t try to outguess a viral impact.

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What are the financial implications if we cancel our auction?  

The first consideration is always the health aspect.  Are you working with a high risk population?  Your decision rests on that.

Assuming your guest population isn’t high risk, let’s talk about money.

Can you afford to cancel?

Less revenue is generally better than no revenue.

If no one comes to the event, that’s one thing.

But if it’s a matter of fewer people coming, it might be worth it to hold it.

During the last recession, much ado was made about “no gala galas.”  The thinking was that during a recession, holding an event felt to be  poor form.

“Send us the money you ordinarily would have spent on a ticket!” the promotions said.

Those pseudo events flopped.

The next year, when the economy wasn’t all that much better, those nonprofits were back to holding real events — and now they were under pressure to make-up ground because they had made zero revenue the prior year.

The concept of a non-gala sounds cute in practice.  It bombs in real life.

[UPDATE AS OF MARCH 12: I just learned about this Seattle non-gala gala that was held earlier this month.  Notice how it’s not just an online fundraiser but more strategic. Looks like they did it right.]

Could you do an online auction instead?

Sure you can.

That would fare better than a full-blown cancellation and would get those auction donations out of your office.

Last I heard, online auction revenue is typically 50-65% return on investment – the same as most silent auction revenues.  Most live auction revenue is over 100% return on investment.

Switching to an online auction means you’ll take a hit, but at least it’s income.

On the downside, you still might lose out once you factor in your deposits and cancellation fees to vendors.

You’ll have to read your vendor contracts and re-read the fine print on your event insurance — if you bought it.

(Back in 2010, I recorded a video about the four most common types of event insurance, including event cancellation insurance.

When I worked for GE as an event planner, I had to manage an event cancellation a few weeks in advance of an event.

Our agreement stated that we owed the hotel money for “damages” to the venue (because the venue had turned down other work once they committed to hosting us), but I didn’t have to pay for food and beverage “damages” because those supplies hadn’t yet been ordered or prepared.

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Could we somehow do an event but maybe make it smaller and still involve others bidding and contributing from their house?  Maybe use live video streaming?

Technology nowadays is amazing and allows for nearly any configuration you want.  When I’ve attended Christie’s auctions in New York, NY, I see people bidding from the floor (meaning people are present and bidding), on the phone, and via internet.

You could do this, too.

Really.  You could.

But let’s be frank.  Most nonprofits are working with small development staffs.  The gala is a huge undertaking which oftentimes relies on volunteers.

Some of those volunteers are hands-on and savvy; they can make the faintest idea materialize.  Other volunteers … can’t.

So although you could take a kernel of an idea from concept to fruition, I doubt most nonprofits have the staff resources to do this.

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Coronavirus is everywhere, so what about selling international trips and cruises?

As I write this, the Wall Street Journal just published that “Italy Extends Virus Containment Measures to Entire Country. Only essential travel to, from and within all of country is allowed; virtually all public gatherings are banned.”

That sounds alarming.  And I can’t help but recall the 8 trips to Italy my company sold among its four auctions last week.

Seven trips were consigned; one was donated.  The Italy trip was among the highest selling package in each auction.

Would those trips have sold as well if this headline had arrived a week ago?

Hard to tell.  Here’s why:

Many trip consignors recognize the awkwardness of selling an international vacation right now.  If there is any concern from the nonprofit, I’m seeing these consignors graciously work to extend the expiration dates of those packages to two or three years.

These lengthy expiration dates have become my lead-in to the description.  “One of the best features of this next package is that you have so much time to plan for this trip of a lifetime,” I say cheerily from the stage.

Cruises might be more iffy, given their constant presence in the news.  Even so, a New York client is keeping her cruise in the live auction.  “There is no expiration date on this cruise,” she pointed out.

If you still feel uneasy, sell domestic trips.  The Points Guy website suggests “Nine domestic destinations with an international feel.”

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What else should we be thinking about?

What’s your local government saying?  They could make the decision easy for you.

Santa Clara County in the San Francisco area might be ground zero for COVID-19 in the USA.  The Grand Princess cruise ship is still floating off the coast nearby, hoping to disembark its passengers.

The County has been issuing frequent updates.  Yesterday they issued this:  All mass gatherings (over 1000 people) must be cancelled, beginning March 11.  The ban is in place for three weeks.

If you’re a San Francisco Auction Chair with an event in two weeks and you were planning an event with more than 1000 guests, it looks like your decision to cancel has just been made for you.

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There are a lots of considerations here, aren’t there?

• When is your event?
• Where are you located?
• Who do you serve?
• Can you afford to cancel?
• What do local government regulations say?

Hopefully you’ve got some food for thought out of this post.

Be well.  Literally.