To Premium or Not to Premium

In a recent study, M+R Strategic Services researched results of year-end fundraising e-appeals from Easter Seals, Human Rights Campaign, Save Darfur Coalition and The Wilderness Society that were launched in December 2008. Each organization sent an e-appeal with a premium ask and one without the premium. Premiums varied across organizations and included scarves, calendars, T-shirts and blankets.

The study found that, on average, response rates increased 95 percent and average gift went up 37 percent with the inclusion of a premium. After factoring in the cost of the premium and fulfillment costs, three of the four organizations netted more with the premium, raising, on average, 51 percent more money per donor.

What's more, all four organizations offered donors the opportunity to opt-out of receiving the premiums, which 24 percent of donors elected to do.

Based on the study results, M+R offered the following recommendations:

1. Choose an appropriate minimum gift to cover the costs of the premium so you don't lose money on the offer.
2. Set a deadline for fulfillment of the premium to urge recipients to give now.
3. Offer an opt-out of receiving the premium to save money. According to M+R, anywhere from 11 percent to 60 percent of its clients' donors opt out of receiving premiums.
4. Include a photo of the premium to make it more tangible to prospective donors.
5. Test to choose an appealing premium that people will want that relates to your organization's mission and brand.
6. Use donated items (that are new, of course) if you have them.
7. Don't target existing donors. Premiums are best used on lapsed or non-donors.

Though the study's results don't speak to the long-term impact of acquiring online donors using premiums, M+R Strategic Services plans on releasing a study that looks at this issue in the fall of 2009.