October 22, 2001 11:05 AM PDT

eBay charity auction faces uphill climb

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October 19, 2001
eBay's goal of raising $100 million in 100 days for disaster relief could turn out to be a pipe dream.

More than a third of the way into its Auction for America fund-raising effort, the San Jose, Calif.-based online auction company has raised just $5 million, or 5 percent of its goal, as of Friday. And that includes $1 million that came from eBay itself.

However, the company is not concerned about its progress, spokesman Kevin Pursglove said.

"Our goal right now is to reach $100 million," said Pursglove. "I think we always knew it would take some time to build up the momentum that's going be necessary."

But it might be difficult for eBay to maintain momentum, especially since representatives at a number of charity groups say donations tend to taper off once a disaster loses its immediacy.

"The pattern is that with a disaster, in the aftermath, you see a really large surge in the funds that you receive," said Devorah Goldburg, a spokeswoman for the American Red Cross. The Red Cross has received $452 million in donations after the terrorist attacks, and while donations have remained fairly steady, they "probably will start tapering off at some point," Goldburg said.

eBay launched its Auction for America campaign Sept. 17, less than a week after the Sept. 11 terrorist attacks on New York and Washington. Sellers who list items as part of the Auction for America agree to donate all of the money raised in the auctions to eBay's charity effort. In turn, eBay and many of its partners have waived their normal listing, transaction and service fees for Auction for America listings.

Many sellers were upset by the charity effort. Some said the company was taking credit for their donations, while others accused eBay of using Auction for America to promote its proprietary payment system, Billpoint. eBay is requiring buyers to use Billpoint to pay for Auction for America items.

One longtime eBay seller said the Billpoint connection with Auction for America discouraged him and others from selling items for the fund-raiser. Many sellers favor PayPal, a more widely used and less costly alternative to Billpoint.

"I think it would have been far higher than $5 million if they hadn't botched this thing when they put it together," said the seller, who spoke on condition of anonymity. "This was and is one of the most divisive things I've seen them do."

eBay has addressed some seller concerns. Earlier this month, the company updated its listing tools, allowing sellers to use them to list Auction for America items. It has also broadened the number of charities that can benefit from Auction for America items. Originally, all proceeds from the auction were to go the United Way's September 11th Fund.

eBay has also begun to allow sellers to charge buyers for shipping Auction for America items. Previously, eBay expected sellers to donate the cost of shipping as well as auction items.

Prior to the shipping change, eBay seller Steven Yoder said he only listed a few items that could be shipped with one postage stamp in the Auction for America. Now he said he plans to list 10 items a week as part of the fund-raiser.

"I think sellers are a little bit happier," Yoder said. "Auction for America is a good effort, but it was poorly thought out."

eBay has about 15,000 items listed in the Auction for America, out of about 6 million overall listings on its U.S. site, Pursglove said. That is down from a high of about 20,000 listings in the first days of the auction, but within the normal range of listings the charity auction has maintained during the last week, he said.

eBay plans to continue promoting Auction for America throughout the 100 days, Pursglove said.

"We have to go about creating attention for it, creating buzz for it," he said. "That takes some time."

 

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