Premiums as Strategic Donor Benefits

The book “Fundraising for Social Change, Fifth Edition” by Kim Klein — author, lecturer, and the founder and former publisher of the “Grassroots Fundraising Journal” — is a hands-on, practical strategies guide that touches on fundraising topics ranging from basics such as asking for money and using the Internet, to carrying out major-gifts campaigns, and the relationship between the development director and executive director. The book also discusses using direct mail effectively and suggests using premiums strategically, as donor benefits.

Klein recommends that direct-mail premiums be used:

1. As thank-you gifts for prompt donations.

2. To encourage donors to upgrade their gifts.

The best premiums are those that your organization already has, she says. If your organization is putting on a concert and ticket sales are slow, for example, Klein suggests offering donors free tickets if they renew by a certain date. You can also turn items that you have excess of, for whatever reason, into premiums.

When using premiums to acquire new donors, Klein stresses that organizations add in the cost of the premium when calculating the cost of the appeal. “The cost of the premium will lower your net income,” she writes, “but if you gain even one or two percentage points in response, the cost will be offset.”

Premiums also can be good one-time donor benefits for organizations that don’t want to commit to offering donors recurring benefits. But Klein says premiums should not replace the personal attention that should go into donor-relationship management. Personal thank-you notes, reports on organizational programs and successes, and personal touches through special events or phone calls are more valuable to donors than tote bags, calendars or the host of other commonly used premiums.

“Fundraising for Social Change, Fifth Edition” by Kim Klein. Jossey-Bass, 2006. $38. www.josseybass.com/WileyCDA/WileyTitle/productCd-0787984558.html