Donor incentives are simultaneously popular and controversial in the nonprofit world. Many reputable nonprofits and charities use them as a fundraising strategy. Yet, experts seem to have mixed opinions about their effectiveness and strategic benefits overall.
Have no fear. Whether you’re considering adding donor incentives to your fundraising strategy for the first time or you’d like to upgrade existing donor incentive strategies, we’ve gathered opinions, insights, and tips from industry experts to help you choose the best approach for your organization.
3 Effective Ways to Offer Donor Incentives
Do fundraising incentives work?
This seems to be the million-dollar question among fundraising experts: does offering donor incentives improve your overall fundraising? Frustratingly, the answer isn’t entirely clear.
One study indicated that some donors actually seem deterred by the idea of receiving a small gift in exchange for their generosity. Perhaps the perception is that the organization is using some of the donations to purchase incentive gifts rather than for other mission-oriented needs. Another theory is that some donors feel that receiving an incentive makes their generosity or philanthropy appear or feel less genuine.
On the other hand, studies show that returning donors aren’t very motivated by incentives. Still, they can be an effective tactic for bringing in new donors--as long as the incentive doesn’t diminish the sense of altruism and detract from the feeling of “doing good.”
Overall, donors are more likely to give--or increase giving--when the donor incentive is part of an exchange in which a portion of the “sale” benefits the nonprofit. Or, more simply, people would rather buy a product to help your nonprofit than receive a gift in exchange for their donation.
It might seem like an inconsequential distinction, but people would rather feel like they’re buying something to support a cause than to feel like their donation is diminished by a token gift.
Should you use donor incentives?
The key to answering that question for your nonprofit is knowing your audience and determining the best course of action for your organization.
If your goal is to increase the visibility of your organization or cause, then donor incentives can be an effective strategy. But, if your goal is to increase the overall size of each donation, then donor incentives are a less effective strategy.
Overall, if you understand your audience well, you can find that “sweet spot” of offering effective donor incentives without deterring your supporters or diminishing their generosity.
3 Effective Ways to Offer Donor Incentives
Creativity and knowing your audience is the name of the game in fundraising--and especially when it comes to attracting and incentivizing donors to give. Here are three practical and effective ways to incorporate donor incentives into your fundraising strategies.
1) Partner with a for-profit business
One clever way to offer donor incentives is to partner with a for-profit business and arrange for some portion of sales to support your nonprofit. Remember, people are more willing to buy something to support a good cause.
If your nonprofit supplies meals to food-insecure students, you might partner with a local restaurant and have a day where a portion of the sales help purchase meals for the students. Your donors get to enjoy a meal and the satisfaction of helping fight hunger… and you get to support a local business thrive, too! Everyone wins!
2) Branded merchandise can be an effective donor incentive
Branded merchandise or swag might be the most obvious or well-known donor incentive strategy. If you’ve ever run a charity 5K or given to a radio station’s “donor drive,” you’ve probably received an event t-shirt or branded coffee mug.
Like we mentioned before, many donors are wary when they fear some of their donations will pay for the swag they’ll receive. One way around this perception is to connect various swag items to pre-set suggested donation amounts on your custom donation page.
For example, you might word your suggested donation amounts like this:
- Give $25 and show your support for abolishing food insecurity with a coffee mug from Mugs-R-Us
- Give $50 and receive a custom tote with our logo from our partners at Totes-R-Us
- Give $100 and be reminded of your relentless pursuit of justice with this beautiful lithograph from our partnering artists at The Artist’s House
If you’re offering swag for a fundraising event like a charity walk or day of service, consider asking for a small donation to help cover the cost of the swag item during the registration process. Or you can add a section to your donation page for supporters to increase their gift by a set amount to receive exclusive branded swag.
The key here is you’re communicating that the donor incentives are gifts and not impacting the amount of money your organization might otherwise spend on the mission at hand. You’re also sharing that the secondary goal of donor incentives is to raise awareness of your cause.
3) Recognition and public gratitude are effective donor incentives
Don’t overlook the simple and obvious here. Most people are happy to receive appreciation and gratitude for their generosity and partnership. A simple way to both boost your donor care AND incentives at the same time is to publicly recognize some of your most active supporters.
Public displays of gratitude demonstrate how much your organization values each supporter and gives credit where credit is due. By thanking individual donors with social media posts or in a “donor spotlight” section of your newsletter, you’re recognizing the people who keep your organization running. You just might inspire others to start (or increase) giving, especially if they know your nonprofit values their financial contribution.
Here are some easy and effective ways to publicly recognize donors:
- Thank supporters directly on social media
- Add a “donor spotlight” section to your email or newsletter
- Thank donors by name when you share success stories or updates on current projects
Of course, not every “thank you” needs to be a public display of gratitude. Personal or indirect expressions of appreciation are just as effective and essential.
- A handwritten thank-you note will go a long way
- Share beneficiary stories that highlight the impact of your work so your supporters can celebrate with you
- Call donors to say thank you over the phone
For capital campaigns, corporate sponsorships, or other major fundraising endeavors, carving out space to publicly recognize your major donors is a great way to acknowledge their generosity. It also inspires other supporters to contribute to your future campaigns.
Overall, donor incentives can be a great tool to attract or increase donations. There are loads of creative ways to add donor incentives to your fundraising strategies and efforts. The key is to understand your audience and what methods and approaches will fit best. But finding that sweet spot will help you reach your fundraising goal and strengthen your relationship with your donors.
Now that you’ve got your donor incentive program established, here are three more resources to help you reach your fundraising goals.
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