It's a good idea to have a willing sp participate. I think there should be a door fee, that will go into the winning bidders total. Everyone pay 20 bucks will help cover cost of sp host, and the room. If the OP is indeed not looking to profit from this, there is no need why they should also be out of pocket with the expenses. Participants know that if they are the winning bid, and it ends up being 300, they need only come up with the addition 280.
it shows a serious intent as well. If you were gambling, you'd have to show your money, so why not in this instance as well, to prove that you can go the distance.
I don't see any reason why the starting bid then is 20, and increments not lower than 5.00. At the beginning people will add on 20 or 50s, and after that if you want to see a real bidding war, don't make the minimum 20 bucks, or you might lose the participants quickly.
How much time is she willing to spend with the winner, she needn't discuss what services, but an amount of time will determine how high the bids would go. I can't see it going to 500, i don't see enough willing participants willing to go that high, but would expect to see something around 200-300. hopefully she will be satisfied with that. the 5.00 increments allow more participants, so a real bidding war might happen, between all participants. it isn't a matter of appearing to be cheap, but a way to fulfill a fantasy.