Items donated for auctions and items intended to be passed along might best be received as in-kind donations of goods. You can select In-Kind as a payment type when entering the donation. In-kind gifts can be added to the thank you letters mailing list as they are recorded and acknowledged using any appropriate donation letter template.
Essentially, these are all pass-though gifts. The real issue is between you and your accountant regarding to which fund you record these donations. Your accountant might want to create a special Fund account into which all these pass-though items accrue because they themselves, in the case of auction items, do not result in benefit until they are auctioned. In the case of items for public distribution, there is no tangible benefit to the nonprofit except in allowing them to further fulfill their mission. This way, both the public distribution item donor and the auction item donor can be thanked when they offer you their item.
Standard in-kind valuation rules should apply (it has nothing to do with what the gift eventually auctions for). Then, when an auction buyer purchases the item they can be thanked for their gift of $ (auction price) but their receipt can only show the dollars above the value of the item originally receipted to the auction item donor. This permits a clear and integrated approach to gift receipting.