To Premium or Not to Premium?

Though the use of premiums is a hot topic of debate in the world of nonprofit fundraising, there are times when mailing these little gifts is definitely the way to go. Here, direct-response marketing copywriter Roscoe Barnes III talks about some of those times.

* When you’ve exhausted your list of non-premium-acquired donors. Creating a secondary list that targets donors that have not responded but might be premium-responsive is more economical than offering your entire list a premium.

* As a pleasant surprise to current donors. “This can engender loyalty and reaffirm your appreciation of their support. At the same time, it can encourage them to increase the size of their gifts,” says Barnes, author of the book “The Better Letter: Essential Tips for Effective Fundraising Copy.”

* For special occasions, especially around Christmas and Hanukkah, when gifts are expected. Offering premiums at special occasions decreases your chances of creating premium addicts.

* For major projects. If your organization is facing a crisis or needs funding for a major project, a premium might help secure major gifts from current donors.

Choosing which type of premium to use is an important decision. The right one can boost response and increase the size of donors’ gifts, but the wrong premium can be more costly than it’s worth. Barnes says organizations should choose premiums that:

1. Will appeal to donors. “It should be an item that they like, something they will cherish, something they will be proud of, something they can use or something that will help them in some way,” he says.

2. Have perceived value.

3. Advertise the organization and serve to remind donors of its mission. Examples of this would be a calendar or a lapel pin. These items can spark conversations and generate awareness for the organization. Other effective premiums are those that remind donors of their importance to the organization’s cause — certificates of recognition that can be framed or official-looking plaques that can be hung on an office wall, for example.

4. The organization can afford. Consider the cost of the product as well as shipping costs. Also in terms of cost, consider that if a large, expensive premium is used for acquisition, donors might expect similar premiums in the future in return for donations.

If an organization finds itself stuck in a situation where its premium-acquired donors are now premium addicts, it’s especially important, Barnes says, to pay attention to the type of premium it uses and should lean toward premiums that instill passion and reinforce its message, such as books, CDs or DVDs. Other strategies for decreasing premium addiction are to:

* Aim to create partnerships when offering premiums. In exchange for a premium, ask donors to become official partners of your organization by pledging to give monthly. This will eliminate the expectation of premiums.

* Test giving options such as offering premiums for larger gifts only, and including a “No Gift” option on your reply device.

Roscoe Barnes III can be reached via www.roscoebarnes.com. To purchase a copy of “The Better Letter: Essential Tips for Effective Fundraising Copy” visit http://bookstore.napco.com/TM/index.cfm?fua=dspGroup&id=FndR