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CharityBuzz's Big Idea: Altruistic Online Auctions

This story appears in the January 2012 issue of Entrepreneur. Subscribe »

Want to sit in on a taping of The Howard Stern Show? Fork over about $30,000. Dinner with Mary Matalin and James Carville? You'll pay around $5,000 for that bipartisan dining experience. A walk-on role on your favorite TV show? Sure--but it's going to cost you.

Scroll the pages of, an online site loaded with posh products and live-large opportunities, and you're sure to find something to covet among the hundreds of sports, fashion, and celebrity experiences, as well as plenty of must-have memorabilia. And bidders can spend big, guilt-free: Every opp is auctioned off for charity.

Founder Coppy Holzman was used to rubbing elbows with a well-heeled crowd--a life that came compliments of his entrepreneurial ways. He was a founding member of, a grocery delivery service with a spectacular 1999 IPO, which quickly shot the company to $7 billion in market capitalization. However, in 2001, Webvan filed for bankruptcy protection.

Holzman took some time off and, in 2004, attended a fundraiser in Westport, Conn., for the Clinton Library. There, he met former President and actor Chevy Chase. Holzman says a friend suggested using his internet background to raise money for a charity Chase was supporting.

"I had thought to put together an auction that would parallel the experience I was having, hanging out with President Clinton and Chevy Chase at the same time," he recalls.

Holzman suggested a Caddyshack golf outing with Chase and , co-stars of the 1980 comedy. He organized the auction--the first for charitybuzz--then contacted other celebrities and organizations. He says the company grew through word-of-mouth. Offerings now run the gamut, from tickets to exclusive events like the Grammys, to like the chance to visit Facebook's headquarters or to serve as an intern to Broadway producer Neil Berg.

Holzman says the economic downturn, which battered so many nonprofits, was actually a boon to charitybuzz. In the wake of shrinking philanthropic budgets and the "post-Madoff" era, charities needed new ways to raise money, and charitybuzz offered a fresh approach. The company currently has more than 1,000 nonprofit partners and continually forms relationships with organizations seeking to arrange auctions. An auction specialist strategizes with the nonprofit rep to come up with special access or opportunities that might result in a buzz- and bid-worthy auction. The company retains 20 percent of the proceeds from each auction; the nonprofit gets 80 percent. Charitybuzz claims a 95 percent retention rate among its nonprofit clients.

Since its launch in Holzman's home, charitybuzz has moved to its Manhattan headquarters, which house nearly 40 employees. At last tally, Holzman says, the company had raised more than $50 million for various charities.

"The fact is that we can take a small group of supporters that charities have and explode it on a global basis to reach tens of thousands of new supporters using social media," Holzman says. "Our business has really skyrocketed."

Good Numbers

  • In Cone Communications' 2011 Cone/Echo Global CR Opportunity Study, 94 percent of respondents said companies must analyze how their business practices affect the world and evolve those practices to make the impact as positive as possible.
  • According to a 2011 U.S. Bank small-business survey, a majority (58 percent) think giving back to the community is important.
  • North American corporate spending on cause sponsorships grew 6.7 percent in 2010, according to research firm IEG, which credits marketers "seeking goodwill from consumers and other stakeholders still recovering from the recessionary " for the growth.
  • Two-thirds of brands now engage in , up from 58 percent in 2009, according to the PRWeek/Barkley Cause Survey 2010.

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