A blog-style forum for announcements, ideas, and discussion, focusing mainly on looking at the way the entertainment and media industries engage with progressive issues -- and of course on the activities of Auctions for Change.
Fri Jan 19, 2007
On eBay Spam & Charity Auctions
eBay has a distressing number of high-ticket charity auctions lately that are, if not absolutely fraudulent, expensively seedy and spectacularly lame.
Do people really fall for these things? eBay seriously needs to do something about this. Because it's getting worse by the week.
And they need to do it not just because people fall for the scams. (I'm tempted to say you deserve what you get if you bid $45,000 on a "really terrific mystery box" from which 15% goes to charity, but the fact is people do sometimes trust what seem to be bona fide charity efforts - and eBay endorses the charitable proceeds aspect of these auctions with their MissionFish arm.)
They need to do it because all these phony auctions PREVENT REAL DONORS FROM FINDING AND BIDDING ON REAL CHARITY AUCTIONS. Even when you do find them, it's harder to trust them now.
That is very sad for the many good organizations that depend on charity auctions for lifeblood-level funding. And it's very sad for eBay, who are the original web2.0 commerce company, and who have done a lot to facilitate socially good transactions and donations.
But seriously, how hard can it be to set some guidelines on these things, especially when it's obviously the same few sellers and formulae over and over again.
Not an auction, but an LA area musical fundraiser I thought folks might want to know about. Singer/songwriteres Quincy Coleman, Courtney Jaye, and Brandi Shearer will take the stage to raise funds for the LA Breast Cancer Alliance, $5 at the door, Wednesday 10/11, 8 p.m.
The NY Times has a feature on celebrity auctions, citing examples previously featured on this blog. Slow news day I guess - check out this creampuff of a quote:
Charities have long sold items owned by celebrities, but eBay and the Internet have pumped new life into this fund-raising technique, increasing returns exponentially.
That is quite the news flash. Interesting read, anyway.
The Skinny on Tax Deductions for Charity Auctions and Car & Boat Donations
Many people have asked me what the deal is with respect to tax deductions on items donated or bidded on for charity auctions. Here's what I have to say on the subject.
First off, I am not an accountant, and these opinions represent only that. Get an accountant if you're doing anything serious.
Second, the IRS has written about charity auctions here. They know more than me about this sort of thing.
If you are donating an item to a charity for the purposes of a charity auction - which is by default considered an "unrelated use" from the item's original intent - you can deduct it TO THE EXTENT OF YOUR TAX BASIS in that item. In other words, you can deduct what it cost you (or what it was worth when you obtained it in a taxable transaction), NOT its fair-market value or its appreciated value. Note that other rules likely apply for depreciated assets as well as goods being donated for direct use (e.g., a copy machine). This is about auctions, remember?
If you are bidding on an item in a charity auction, you are making a deductible donation only to the extent that you are paying over the fair market value of the good. And you must be knowingly paying more than the value of the good. There is specific, funny IRS wording, so I'll quote it directly: "'The donor must be able to show, however, that he or she knew that the value of the item was less than the amount paid." My accountant has informed me that this may not be simply the face value of a ticket, if the market value of that ticket is demonstrably over face. So the $3000 you bid for that $150 face-value front-row Bruce Springsteen ticket with meet-and-greet may qualify for a tax deduction, but certainly not the entire amount over $150, and most auctions that are conducted on eBay ipso facto have a market value of the final sale price. Check with an expert if you aren't sure.
Car and boat donations have special rules. File under "if it sounds too good to be true, it probably is" and "no, the barnacled bathtub that's been on blocks for 17 years is not an $80,000 yacht". See for yourself at the IRS website here and here. Basically, you can count the fair market value of the donation, but if it's bound for the auction block, charities are now required to report the actual gross proceeds of the sale.
This is unrelated, but of interest: you cannot deduct your time, even if your time has value and opportunity cost - e.g., you are a $500-an-hour attorney and you give up billable hours while helping a charitable cause. You can, however, deduct mileage and/or out-of-pocket travel costs incurred directly in service to a charitable cause.
For the purposes of everything above, of course I'm referring to legitimate, registered 501(c)3 tax-exempt charitable organizations. If you're dealing with anything else, get thee to an accountancy. In case you didn't know, there are a whole bunch of different 501(c)X's for purposes ranging from the benign to the political, most of which are NOT tax-exempt.
Virtual Charity Auctions Limited only by the Imagination
I love this - people are auctioning fictitious goods inside virtual communities and massively multiplayer online games ("MMO") to raise money for charity. In this case, a custom ride -- a fashion accessory for someone's virtual avatar (see image) -- went for over $2000 in real, hard cash to benefit a cancer charity an organized virtual walkathon that raised over $40,000 (real, hard cash) for the American Cancer Society.
Another nice proof of the concept that anything people are passionate about has terrific charity potential.
Regular Auctions for Change readers concerned that I occasionally wander off topic or stretch the bounds of this site's themes can put their fears to rest: I've launched a personal blog for observations related to web 2.0, publishing, and personal reflection. Here's the welcome post - come on by for a visit.
Bringing Charity Affinity Marketing to a Store Near You
Interesting item in today's Washington Post covering a new initiative by the Global Fund (which has raised billions for AIDS prevention and relief and distributed it to over 130 countries) -- launching a licensed mark called Product Red. Ranging from Bono-style sunglasses from Armani to Converse shoes to Motorola cell phones, products will be licensed and marketed around the fact that they generate royalities to Global Fund. In the apt words of the Post reporter, its "a program that [the fund] hopes will harness the vanity, altruism and immense purchasing power of young adults."
Good stuff - let's hope it comes to the U.S. soon!
In what sounds like a classic academic exercise in proof of the obvious statistically significant validation, a university study has proved, once and for all, that people are more willing to give more money away to pretty women than anyone else. Link via where most needed.
Internet marketers have known this since the internet started putting adult stores out of business, but it's of interest to note (in all seriousness) that additional incentives, such as "lotteries" (a.k.a. raffle prizes) increase charity yield significantly. This is, of course, one of the key themes of Auctions for Change - that everyday donors can be found through the creative use (or re-use) of free and low-cost efforts by high-leverage brands, celebrities, and media.
I've been interested for some time in how non-profits and cause-oriented organizations are leveraging blogging and the web, but I just came across an interesting blog called, appropriately enough, npmarketing, and a relevant post thereupon.
Just catching up on some RSS feeds today and realized I'd missed the passing of a thinker and writer (I hesitate to call her an intellectual so as not to obscure her accessibility and anti-elitist spirit, but she certainly was a great intellect) who had a profound influence on me. Jane Jacobs, author of The Death and Life of Great American Cities, died last week. Though this is outside the normal scope of this blog, her approach exemplified the power that passionate beliefs, personal commitment, and good writing can have in the real world.
Her work, the people she's inspired, and the great work they've done, will live on.
A4C friend Rock & Rap Confidential, linked many times from these pages, has put out an encouraging "state of the unity" message on music industry participation in social change. Full text below continues after the jump; please consider supporting or becoming a paid subscriber if you can.
Dear RRC E-Mail Subscriber:
In a world of corrupt radio, concert ticket price-gouging, product placement in songs, Wal-Mart censorship-not to mention war, poverty, and the collapse of our health care system-a lot of good things have happened in the past year or two.
Mississippi-based rap star David Banner starts an organization to help the victims of Katrina at the same time that a dozen hard rock bands in L.A. get together to raise money for New Orleans bands who have lost everything. Country stars Tim McGraw and Faith Hill denounce the government for not dealing with the post-hurricane disaster in Louisiana and Mississippi….Several indie bands turn down six figure offers to allow their songs to be used in Hummer commercials…Thou-sands of artists give their music away via the Internet….U.S. soldiers who have served in Iraq put out an anti-war album…
This was forwarded by our friends at Rock & Rap Confidential. If it's really true, it's awesome.
The screen legend was recently interviewed by Kate Thornton on British
TV about working with Colin Farrell in "S.W.A.T." when
the following
conversation took place.
Kate: What's it like working with Colin, 'cos he is just so hot in the
UK right now.
Samuel: He's pretty hot in the US, too
Kate: Yeah, but he's one of our own!
Samuel: Isn't he from Ireland?
Kate: Yeah, but we claim him 'cos Ireland is beside us.
Samuel: You see that's your problem right there. You British keep
claiming people that don't belong to you. We had that problem in
America too -- it was called slavery.
