Nonprofit Branding: Part 3 – Pros & Cons of Fundraising Premiums

We’ve been discussing whether contributor incentives (fundraising premiums) are worth the hassle. At the request of a reader, we listed a ton of negatives and only two positives in a prior post. Then I suggested most negatives are rather softly-based on personal opinion, while the positives rest on a stronger foundation – market research plus the experience of a broad range of successful nonprofits.

Premiums do work! They shape market opinion, build constituencies and enhance brands. They also attract revenue from constituents who want to own an affinity-product bearing the brand of their favorite cause. Now let’s look a little deeper….

Large brand-intensive organizations, profit and nonprofit alike, don’t rely on guesswork, opinion and myth. Research guides every marketing practice.

Consider the organizations that use branding products as motivators – and why. Premiums increase subscriptions to the Wall Street Journal, TIME Magazine and National Geographic. They build membership in university alumni associations and membership organizations. They induce people to go see the new Ford or test the new Makita workbench tool. They increase attendance at sports events. Premiums attract contributions to high-end nonprofits like the World Wildlife Fund and attract runners to the Komen Race for the Cure.

Skeptical? Here is an indicator of effectiveness: the promotional products industry generates $19 Billion in annual revenue. The nonprofit sector, which uses logo products for marketing, branding and fundraising purposes, is the industry’s largest consumer – investing something like $5 Billion a year on imprinted branding products. All these products are used for brand enhancement and marketing. A good portion is used as contributor incentives – fundraising premiums.

If you select and present it correctly, and only if you do, a premium with your logo becomes extra incentive to push supporters off the fence and into the gift renewal column – or up to the next contributor level.  Some people are acquisitive. They want stuff! Some think your premium would be a great present for Uncle Harry and Aunt Millie. Others are lazy or passive. They need extra inducement to get off their butts and make the gift. All folks are different, but I think most who respond to a premium are motivated by affinity. Your logo is important to them. So your premium becomes a declaration of personal affiliation and a source of pride. Because it symbolizes their association with your mission, the premium is a form of self-identification – an assertion of their personal values.

Motives vary. Who cares? You have expenses to cover. Results count. Don’t let excess purity keep you from doing smart business. As said earlier – in a perfect world your organization would be fully supported because of its public service mission. This is an imperfect world. A world where effectively pitched premiums can generate extra revenue.

Now we are getting to where the rubber meets the road: the premium that enhances revenue is merely a trinket. It becomes a desirable contribution incentive if you effectively communicate its relationship with your organization and your mission.

To restate that important point: premiums DO produce revenue. But you are the key to their success or failure. YOU!

We’ll help you figure out how to succeed. The next post in this series will begin a discussion about the how and why of effective premium use.

FACTOID: Have a taste for irony? Try this: I once banned a nonprofit from using fundraising premiums!

In 1980, as a university VP, I dropped by the public radio station that reported to me and stumbled into 20 cases stacked four feet high. The station manager had ordered All Things Considered coffee mugs. He did this without giving any thought to how the station would use these mugs to attract contributions from the audience. Nor any thought about how to get the mugs in the hands of contributors after the fundraiser. NADA!

For weeks a half-ton glacier of mugs sat in the center of the studio’s tiny reception area, melting slowly while the station manager fretted under my continuing reminder that the sequence is this: Plan first…..THEN execute.  (Of course, I didn’t know much about premiums either. Back then, none of us in the young public radio industry knew how to use  premiums effectively. So, directing the station to avoid them until we learned the basic lessons was a virtuous decision. Later, after I started a premium distributorship, I saw the irony in that decision.)

My education in fundraising premiums began with this misfire. Five years later, having learned the basics of effective premium use, Janice and I launched VisABILITY to supply premiums to the nation’s public radio system. This blog is our outreach project designed to share the lessons we have observed and learned in the last 26 years – often the hard way.

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