That Fingerpainting Wasn’t Worth a Penny Over $49,000!

stjohnFrom the tabloids to the blogosphere to MSN to NPR, there’s hardly a news source that doesn’t  find this story irresistable. The elements alone are the stuff of sitcom, even before we get to the action.

Exhibit A is a wealthy Manhattan couple, Michelle and Jon Heinemann, whe are all too easy to poke fun at if only for the fact that they named their children Hudson Cornelius and Hyacinth Cornelia.

Exhibit B is the “posh” (that adjective came from the British press) kindergarten that little Hudson Cornelius attends, the Cathedral School of St. John the Divine, with tuition rates of $39,000 a year.

Exhibit C is a fingerpainting that Michelle, an artist, helped the divine little schoolchildren create for the school’s fundraising auction. She intended to place the winning bid on it herself, for $3,000, and apparently arranged this with the school before she went on vacation.

Now, for the action: The school apparently decided that its power over the absent Michelle’s bidding didn’t stop at $3,000. So when a first-grade teacher named “Ms. Bryant” threw herself into the bidding with great enthusiasm — or, according to the Heinemanns, with a wink and a nod from the school — it countered with proxy bids for the Heinemanns until the bidding topped out at $50,000. (Collective gasp.)

The Heinemanns may not want to spend $50,000 on a fingerpainting, but they may be about to spend that amount on lawyers. They’re suing the school for $415,000, a figure they derived from the costs of placing young master H.C. in another school. You can  read the details about that in the various tabloids. Let’s talk now about why the school’s actions were — if we’re to believe the basic gist of what happened — just plain dumb, and a reminder to every nonprofit not to get into the same type of trouble.

First off, if the school was really told that its bidding-proxy power stopped at $3,000, then failure to honor that is a major breach of trust. And even if that memo got lost somewhere, bidding a fingerpainting up to $50,000 just doesn’t pass the smell test, no matter how wealthy the bidders.

But let’s say it all seemed okay to the school in the heat of the moment, and no one rethought it until what must have been a rather awkward phone conversation with the Heinemanns. (“Uh, good news! You outbid the competition for the fingerpainting!”)

The school had a couple of perfectly viable options here. First, it could have offered the fingerpainting to the second highest bidder (“What, Ms. Bryant? You don’t want the fingerpainting for $49,000 after all?”). Okay, maybe the third-highest bidder. Oh, that was probably the Heinemanns. Come to think of it, the better option would probably have been to ask the Heinemann’s to pay the $3,000 that they thought they’d agreed to. And by the way, making them happy would have increased the chances of higher donations down the line.

The priceless lesson that the school hopefully learned here is that a nonprofit that gets into activities like auctions is acting somewhat like a business — and business customers expect to be treated with great deference, not as the walking checkbooks that nonprofit donors sometimes complain of being treated like. For more useful tips on how to run a fundraising auction, see The Volunteers’ Guide to Fundraising (Nolo).