Advantages and Disadvantages of Auctions to Nonprofit Organizations

Auctions/ Dynamic Pricing
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Auctions/ Dynamic Pricing
According to Carpenter et al. (2018), a nonprofit organization can be defined as an organization that has been granted special tax exemption status because it is focused on a social cause for the benefit of the public. Netzer, D. (2020) defines an auction as an event where people convene to place competitive bid prices on goods or services. Auction provides an alternative funding source due to nonprofit organizations’ limited income streams. However, nonprofit organizations must weigh the benefits and drawbacks of auctions. As a result, this short article will discuss some of the advantages and disadvantages of auctions as a source of funding for nonprofit organizations.
Advantages of Auction to Nonprofit Organizations
Since auctions are highly advertised and open to everyone, nonprofit organizations can take advantage of the pool of buyers attending these auctions to attract new donors/sponsors. According to Alm and Teles (2018), nonprofit organizations are tax exempted in the United States. This might encourage more buyers to acquire goods and services through auctions organized by nonprofit organizations, and in return, the organizations may raise more revenue. Finally, as we have mentioned in ...