Many shuls have a Simchas Torah auction. In this auction the honors of the day, the aliyos, hakafos, Mussaf and so on are sold to the highest bidder. Many synagogues take this a step further and sell the honors for the whole year such as the ‘honor’ of being allowed to pay the electric bill. I believe this honor is still available at my Shul, drop me a line if you’re interested.
What is the permissibility of such an auction? After all, we know that one is not allowed to talk about money or engage in buying or selling on Yom Tov and Shabbos!
The Halacha is that one may say they are giving a specific amount of money to Tzedaka on Shabbos. The Rema (306:6) uses this to explain how we may give a specific amount to the Shul upon receiving a Mi Sheberech, the prayer for one who has been called up to the Torah. Perhaps a natural extension of this law would be to allow an auction for mitzvos as well.
The Maharshal however, quoted by the Magen Avrohom, is hesitant to embrace this extension. In an effort to resolve the minhag he says that perhaps there is no ‘Mekach Umemkar’ or business dealings which are prohibited on Shabbos with Mitzvos. In any case, selling seats or other tangibles would definitely be prohibited according to the Mahrshal. He recommends that in all auctions the bidders should resolve to pay their bid whether or not they win the auction. That way it’ll be less business-like and more Mi Shebeirech like. I hear there was a Shul in California that actually did this. I’m sure most Rabbis and Shul presidents could easily adapt to this minhag.
The Aruch Hashulchan, in an effort to justify the practice explains: The bidders aren’t bidding as in a conventional auction. Rather they are saying that if I am privileged to receive the Aliyah, (or other honor) then I will give such and such to Tzedaka. He concludes that one should not question this practice and it is unequivocally permitted. He mentions the concept of all the bidders, even the losers, giving their bid to Tzedakah and he calls this a pious act but not obligatory. [The Aruch Hashulchan does stress that this is only in reference to intangibles, seats and such would definitely be prohibited].
The Mishna Berura in a more tempered approach writes that there are those who allow the bidding practice and those who disallow it, and in a place where it is done one should not protest it.
I have seen of late several shuls who offer an online auction before yomtov. This approach would prevent any potential problems, (and enable one to pay with Paypal).