Dec. 27 (Bloomberg) -- After the dot-com bubble burst and took down his online grocery store, Webvan Group Inc., Coppy Holzman got back in the game by auctioning unique experiences for charities, like a backstage meeting with Paul McCartney. Then he took it global on the Web.
With his Charitybuzz.com, Holzman serves as a broker who finds the celebrity and runs the online auction. Instead of an upfront fee, he gets 20 percent of the sale proceeds.
“Charitybuzz collects the money and makes sure it gets to the charity,” said Merri Lee Kingsly, vice president of Saveur magazine’s publisher, Bonnier’s Luxury & Lifestyle Group. According to Kingsly, she hired Charitybuzz to help raise $42,000 because without its help, her company “couldn’t handle the transactional part of the event.”
“My model is very simple,” said Holzman. “The auctions raise money to help nonprofits, and we operate as though we’re an extension of their development office.”
Holzman, a native of Altoona, Pennsylvania, and a former Federated Department Stores executive, doubled Charitybuzz’s business to $25 million this year over 2009 and has increased its bidders to 45,000 from 30,000. His 600 clients include nonprofits such as the Robert F. Kennedy Center for Justice & Human Rights, hip-hop mogul Russell Simmons’s Rush Philanthropic Arts Foundation and fashion designer Donna Karan’s Urban Zen Foundation, which aids health and education causes and empowers children.
Most bids come from the U.S, followed by the U.K., Canada, Germany and Japan, he said. This year, several participants from Australia and South Korea are among the 110 nations represented. They bid on everything from LeBron James’s old Cleveland Cavaliers Jersey to the chance to meet reality-television stars Kim and Kourtney Kardashian.
“Using pop culture, we can change how people use the Internet and technology to raise money,” Holzman, 55, said. “Just like Starbucks changed how you drink a cup of coffee, this changes how you think about raising money for charity.”
Online donations during the holidays this year are expected to reach more than $6 billion, up 30 percent from last December, according to a study released last month by Convio Inc., an Austin, Texas-based online software maker.
While Holzman saw auction items plateau at $50,000 during last year’s recession, this year’s bids have rebounded strongly. In May, a bidder won a golf date with former U.S. President Bill Clinton for $80,000. The proceeds went to Christie’s Green Auction. Then an Audemars Piguet watch signed by Jay-Z went for $220,000. This month, a woman paid $130,000 to meet Paul McCartney backstage at New York’s Apollo Theater to benefit the Green Schools Community Initiative.
Tables Top $25,000
“We knew the recession was over when gala tables began selling for more than $25,000,” Holzman said.
With the New Year approaching, Charitybuzz is lining up more celebrity experiences for charities. Future auctions include a three-night New Year’s Eve package with a concert featuring Jay-Z and Coldplay, and Super Bowl packages sponsored by Cadillac.
“Our bidders are philanthropic,” Holzman said. “The money goes to a great cause and you get something back in return, so it’s a win-win.”
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