eBay's charity auction falls far short of goal

The company's Auction for America charity auction raises just $10 million in its 100 days, well below the original aim of $100 million.

2 min read
eBay has made a habit of beating Wall Street's expectations, but its effort to raise money for disaster relief fell far short of its goals.

eBay's Auction for America charity auction, launched to help those affected by the Sept. 11 terrorist attacks, raised just $10 million in its 100 days, the company announced Friday. The online auction giant had aimed to raise $100 million in 100 days.

"We had hoped to raise more, but given the massive outpouring of support that occurred following Sept. 11, I'm pleased with what we achieved," eBay Chief Executive Meg Whitman said in a statement.

eBay launched Auction for America less than a week after the September terrorist attacks, after an appeal from New York Governor George Pataki and New York Mayor Rudy Guiliani. The company and its partners waived all of their normal fees for the auction so that all the money raised through the auction would go to charity. Although the auction initially benefited only the United Way's September 11 Fund, eBay later included the American Red Cross, the Twin Towers Fund and four others.

But despite a $1 million contribution from eBay itself and donations by high-profile companies and people such as Taco Bell, Wells Fargo, Jay Leno and "Star Wars" creator George Lucas, the effort got off to a slow start and never gained much momentum. Halfway through the auction, eBay had raised less than $6 million.

Part of the problem was that eBay was never able to gain mass support for the auction from its users. The company said in its statement that 100,000 users donated more than 230,000 items to Auction for America. But eBay has more than 37 million registered users and about four million to six million auction listings on any given day.

The many Sept. 11 charities made it difficult for eBay to reach its $100 million goal, eBay spokesman Kevin Pursglove said.

"By the time we got the ball rolling, there were a number of different options for eBay users to donate to," he said.

Many eBay sellers criticized the charity auction from the beginning, charging that eBay was taking credit for sellers' donations and was using Auction for America as a tool to promote its proprietary Billpoint payment system. eBay required buyers to use a modified version of Billpoint to pay for all Auction for America items.

Despite criticism from sellers, eBay plans to allow future charity efforts to use the payment system it developed for Auction for America, the company said. The system sends payments directly from buyers to charitable organizations.

In contrast to eBay's Auction for America, funds established by the United Way and the American Red Cross have received record donations and the two charities stopped soliciting donations weeks ago. The American Red Cross Liberty Disaster Fund, for instance, has raised more than $660 million. The United Way's September 11th Fund, which has raised some $380 million overall, raised some $30 million in the past month.