What is Underwriting?
It’s no secret that offering the right auction items at a raffle, live auction, or silent auction is key to your fundraising success.
From luxury villas and five-star resorts to VIP events, consignment items generate more excitement and drive significantly more revenue to your mission. However, at a fixed cost, a portion of the proceeds typically go toward covering their cost.
Underwriting solves that.
This smart fundraising strategy allows you to cover the cost of a consignment item so you keep 100% of the winning bid for your cause.
How Does Underwriting Work?
Underwriting begins with seeking out local businesses, organizations, or individuals interested in supporting your charity event.
Instead of donating an item, your underwriter agrees to cover the full or partial cost of a consignment package—often in exchange for visibility at your event. This can include recognition in your event program, shout-outs from the auctioneer, signage, or other promotional benefits.
Importantly, the underwriter pays the vendor directly—not your nonprofit.
With the cost of the item covered, your organization keeps 100% of the winning bid. In return, the underwriter receives valuable exposure and the opportunity to align their brand with your mission.
Example in Action
Your nonprofit is auctioning off a luxurious Mexican getaway at your upcoming gala. The consignment package includes four nights at a triple-diamond resort, complete with beach access, oceanfront pools, upscale dining, and concierge services.
If the consignment cost is $1,000 and the winning bid comes in at $3,100, your organization would keep $2,100 in proceeds.
But, with an underwriter covering the $1,000 cost, your nonprofit would keep the full $3,100 raised.
Sponsorship vs. Underwriting: What's the Difference?
Contrary to popular belief, sponsorship and underwriting are two different strategies.
Sponsorship allows donors to make a direct payment to your nonprofit in exchange for public recognition, branding opportunities, promos, exclusive access, or other forms of visibility.
Underwriting allows businesses or individuals to cover the cost of a consignment item. Your underwriter pays the vendor directly, allowing you to offer the item at zero cost—bypassing "no consignment policies" or expense ratio restrictions.
How to Underwrite Auction Items
1. Procure Your Consignment Items
Start by selecting a high-value consignment item that will excite your audience and drive strong bids. Travel experiences are consistently top performers—and with LuxGive, you get access to exclusive, turnkey experiences that are proven to raise more for your cause.
2. Draft Your Petition Letter
Your letter should outline your mission, why your event is crucial to raising funds, and how covering the cost of an item will help you direct 100% of the proceeds to your cause. Be sure to highlight the benefits for the underwriter, such as public recognition and a tax-deductible donation.
2. Secure Your Underwriter
Reach out to local businesses, organizations, and individuals who may be interested in supporting your fundraising event. In addition to direct outreach, nonprofits can also leverage networking events, industry connections, and partnerships to identify potential underwriters.
3. Confirm the Agreement
Provide your underwriter with a written agreement or commitment form. This form should include:
- Your organization name and event date
- The underwriter's contact info
- The item and total cost
- The underwriter's signature and date
Once signed, have your vendor send the invoice and receipt of payment directly to the underwriter.
5. Auction Off Your Item
With the cost of consignment covered, you can now auction off your item and keep 100% of the winning bid! Be sure to acknowledge your underwriter generously at your event and send a follow-up thank you letter.
Benefits of Underwriting
1. Keep 100% of Proceeds
When a business or individual underwrites an item, the consignment cost is fully covered—meaning your nonprofit keeps 100% of the winning bid. Without the expense of the item, every dollar raised goes directly to your programs and initiatives.
💡Fundraising Tip:
You can secure multiple underwriters for one experience, ensuring you always cover 100% of the consignment cost.
2. Avoid 'No Consignment' Policies
Underwriting offers a strategic workaround for nonprofits with restrictions on consignment items, ROI thresholds, or expense ratios. By having the underwriter pay the vendor directly, you can include premium packages at your event without compromising your nonprofit rating.
3. Raise More Money
Consignment items like a five-star resort or bucket-list trip to Tuscany are proven to drive excitement and higher bids. When underwritten, these standout prizes deliver even greater returns: 100% of the winning bid goes to your mission, maximizing donor impact and fundraising results.
4. Foster Partnerships
Underwriting creates meaningful opportunities to engage local businesses, corporate sponsors, and major donors. In exchange for their support, underwriters receive valuable recognition at your event and beyond. These partnerships can also open doors to new networks, sponsors, and future supporters.
5. Increase Fundraising Impact
Sourcing donations can be time-consuming and often results in lower-value returns. Underwriting gives your supporters a way to contribute high-appeal auction items they wouldn’t otherwise be able to donate—unlocking bigger prizes, stronger bids, and greater impact for your cause.
6. Improve Donor Engagement
Underwriting does more than raise money—it builds connections. Featuring exciting, underwritten items can boost attendance and engagement, helping you grow your donor base and strengthen ties with existing supporters.
Better yet, inviting donors to underwrite an item themselves can deepen their investment in your mission and create a sense of ownership in your event’s success.
Take Action
Underwriting is one of the simplest ways to maximize your auction results—and now you have the tools to get started.
Looking for high-performing consignment items to pair with your petition? LuxGive offers turnkey luxury travel experiences that drive stronger bids and makes fundraising feel effortless.
Book a free consultation with our team to explore top-selling packages and discover more fundraising strategies to help you hit your event goals.
At LuxGive, we believe in the transformative power of travel. Our mission is to help nonprofits raise more funds at auction through once-in-a-lifetime villa and resort experiences.
Our luxury travel experiences feature Premium Guest Services and access to an exceptional portfolio of exclusive homes, resorts, and VIP events around the world.
Whether it’s a luxury Caribbean villa, an enchanting Tuscan apartment, or an alpine lodge steps from the powder, we have something for all your clients' needs.