Incentives

Nonprofits are using premiums and branded products in myriad ways. Here are some techniques that are working and why.

I spoke with consultant Pamela Barden, founder and president of PJBarden Inc. and member of the FundRaising Success Editorial Advisory Board, and copywriter Willis Turner, senior copywriter at Huntsinger & Jeffer, who shared some thoughts on the use of premiums in fundraising. Welcome to the conversation!

When you glance at that list of top premiums in 2013, immediately you notice that these are relevant, useful gifts. The most common premium in 2013 is a book! (So much for not  treating the donor with intelligence.) For example, the Union of Concerned Scientists offers the book “The Consumer’s Guide to Effective Environmental Choices” to prospective donors, which serves to connect them more deeply to the cause as well as offer useful information.

In the December 2007 issue, DM Diagnosis writer Kimberly Seville discussed the onslaught of freemiums and premiums that she had recently received. In "More, More, More!" she wrote, "With the way some mailers are piling on the freemiums and premiums, you’d think donors have gone all greedy on us."

From the research I've seen, premiums can work to boost giving in the short term but also create some problems long term, especially if the premiums are positioned as a quid pro quo for a gift and have limited resonance with the cause. So what approach might be better? Mercy Corps chose to surprise donors with a gift tightly aligned with its cause, AFTER the donors gave. It was rooted in social, not market norms. The gift delighted donors without crowding out their emotional connection to Mercy Corps. It's an example of excellent cultivation.

In the October 2005 issue, then FS Associate Editor Abny Santicola wrote, "Don't Mess With the Message," an Anatomy of a Control that looked at how the Vietnam Veterans Memorial Fund learned that an organization's premiums have to reflect its mission.

The long-running debate about the value of premiums is popping up again, as it tends to do now and then. Do they hurt more than they help? Are they ever a good idea?

Almost every direct-response fundraiser who can count eventually comes to the realization that reliance on premiums to boost short-term acquisition response rates is a long-term prescription for poor retention and lousy lifetime value. Many are unaware of the ample evidence in behavioral science for why premiums not only delude fundraisers but, far more importantly, destroy donor motivation and loyalty.

Choosing to ignore the "premium problem" is far too often the option selected in the drive to keep acquisition rates high and CEOs happy.

Three fundraising professionals shared their "20 Big Ideas for Small Nonprofits" at the 2012 Washington Nonprofit Conference. Here are ideas 1-5.

In the fall of 2010, the Chuck Colson Center for Christian Worldview was looking to build a brand-new donor base through e-mail. Here are the results and lessons learned from working with KMA.