The issue is whether contributor incentives will attract more gift income than you would otherwise receive – and whether that result is worth the effort. The first post in this series listed a bunch of negative attributes. Only two positives. That started the conversation.
Future posts will explore dynamics that influence premium success and failure. We’ll also examine the risks faced by nonprofits that fail to develop understanding and expertise before using these fundraising tools.
But first we need to dig a little deeper into that list of Pros & Cons Steve asked us to address. We take them seriously. You should. too.
Both Pros and Cons are real factors. Over the next two or three posts my job will be to explain how to subdue the negatives, or – at least – how to live with them. I will also explain how effective use of branding products can enhance your market position, service your constituency and add to your revenue stream.
In case you missed the first post on this subject, or forgot the lists of Pros & Cons, I will insert them at the bottom of this post. But, before we get there, I want to take a couple small pokes at the list of negatives.
FIRST POKE: You might have noticed some negatives are valid impediments and inconveniences. Nevertheless, thousands of nonprofits include premiums in their fundraising strategy – proving that even valid negatives can be overcome. Other items on the list tend to be personal conclusions of individuals and their organizations. I would be cautious about asserting they reflect the full experience of the nonprofit sector and the professionals who manage it.
SECOND POKE: Each year the promotional products industry sells nearly $20 billion of imprinted branding products. (Biggest consumer? The nonprofit sector!) A large body of data exists – based on the marketing and fundraising experience of thousands of organizations and three decades of research by direct mail consultants, industry alliances, marketing and public relations firms, fundraising experts and more. The data can tell you how long a pen with your logo will be retained and how often it will be used. It can tell you how many visual impressions are created by the brand on a coffee mug – and the cost per impression compared to a magazine ad, a billboard or a TV commercial.
Now we give you a real-world illustration of the research that can guide your decisions. The question is: how effectively does the BBC cap in the photo reinforce that brand to the public? If it has average impact, it will be retained by the owner for 7 months & generate 443 impressions each month at a cost of .002¢ (two tenths of a cent) per impression. That is 2/3 the cost per impression of an average newspaper ad and equal to the cost per impression of an average Prime Time TV commercial.
My pokes at the topic spotlight the contrast between the Pros and the Cons of fundraising premiums. It seems to me that the validity of negative viewpoints is rooted in limited and unsuccessful experience. The positive viewpoints are based on a broad accumulation of successful experience and, as the data about the BBC cap example indicates, also based on years of serious market research.
In my opinion, the legitimate issue is not the Pros and Cons of fundraising premiums. Sure, they can be a pain in the neck to use. But you have a mission to sustain. And a market to nurture. And a revenue stream to protect. And an expense structure to support.
So, in my mind the challenge for a nonprofit executive who is wondering whether premiums are effective fundraising tools or not should become the following:
- understanding logo-power in an affinity-market;
- knowing why contributor incentives generate cash;
- and learning how to present them persuasively, so they will generate additional cash for your nonprofit.
If my reasoning makes sense to you, keep reading the Nonprofit Branding Blog. Those are exactly the issues I will be discussing in the next few weeks.
RECAP OF NEGATIVE ASPECTS: Cost of premiums; lower response rate of new contributors; failure rate when used ineffectively; lack of knowledge about effective use; difficulties of selecting premiums, of warehousing them, packing them and shipping them; concern about ordering too many or too few; erosion of the solicitation message when promotion of the premium intrudes on it.
After reading this list, posted in response to his suggestion, Steve suggested another negative aspect: premiums can become addictive to nonprofit and to contributor, resulting in a pattern of transactions designed to claim the premium rather than support the mission. (I paraphrased here. PBS is the example Steve offered to illustrate the point. As you’ll see in the Comments Section, while I agree with Steve about PBS, I think it stretches things a bit to worry that this is a risk many other nonprofits will face. Fundraising is not retailing and most organizations and most contributors understand that.)
RECAP OF POSITIVE ASPECTS: Products with the logo of an affinity-organization build its visibility, reinforce its market niche and enhance brand loyalty of supporters. When used correctly those products become effective contributor incentives because they are badges of membership in a nonprofit’s community of support – badges that are gratefully received and proudly used by your affinity market.