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Insights from Karen Climer about fundraising and nonprofit organizations

Is A Thank You Gift Important? Does It Even Make A Difference?

May 27th, 2014 by Karen Climer

Last week I received two pieces that made me think about thank-you premium gifts.  The first piece was a solicitation letter from Wounded Warriors Project that included free American flag coasters. The second piece was a large package from Southern Poverty Law Center that included a book written by the founder of the Center about many of the early civil rights cases.

Thank you gifts come in two forms: front-end and back-end.  A front-end premium is where the organization sends you a free gift hoping you will donate, like the coasters from Wounded Warriors Project.  A back-end premium is where you only get the premium if you donate, like the Southern Poverty Law Center book.  Often, the organization says, “If you donate $50, we will send you a super cool thank you gift.”  Sometimes the gift is a surprise.  Back-end premiums are usually higher-quality gifts.

The piece from the Wounded Warriors Project included six cardstock coasters that had the Wounded Warriors logo on one side and the America flag on the other side.  Front-end premiums like this are proven to increase response and average gift size.  Profitability depends on the cost of the gift.

The piece from the Wounded Warriors Project included six cardstock coasters that had the Wounded Warriors logo on one side and the America flag on the other side. Front-end premiums like this are proven to increase response and average gift size. Profitability depends on the cost of the gift.

Love them or hate them, premium gifts seem to evoke strong reactions from donors and fundraisers alike.  I remember working at a Philanthropy 400 organization that sent greeting cards as a front-end premium every year.  Several donors got so mad they threatened to never give another gift.  (Then they got off the phone and wrote a check.)  Other donors said they loved them and looked forward to them each year.  At the same institution, many in the development department loathed the annual greeting card appeal while others raved about how profitable it was.  I’ll tell you my opinion in my next post.  First, let’s look at the research…

According to Roger Dooley, neuromarketing expert, front-end premiums such as address labels, greeting cards, and even paper coasters do work.  They not only increase the response, they increase the average gift size.  The psychological principle of reciprocity says if you do something nice for me (send me free address labels), I should do something nice for you (send you a donation).

I received this book as a back-end premium from the Southern Poverty Law Center.  This was not promised in the solicitation.  It just showed up unexpectedly as a thank you gift.  This type of surprise back-end premium is currently untested.

I received this book as a back-end premium from the Southern Poverty Law Center. This was not promised in the solicitation. It just showed up unexpectedly as a thank you gift. This type of surprise back-end premium is currently untested.

Don’t think this is reserved for mass mailings and inexpensive items.  The same principle can be used with more expensive items larger asks.  Research shows that the nicer the gift is the more frequent the donation.  So if you are meeting a mid-range donor, take along a nicer gift.

Back-end premiums are a different story.  According to research done at Yale University, if you offer a conditional premium such as a mug, t-shirt, or tote bag, people donate less than if you had not offered the item.  A person’s intrinsic motivation is decreased once an external incentive is added.  Plus, people are concerned about what other people think Are you the generous angel who donated to NPR because you care about public radio?  Or are you the selfish ogre who only wanted the free CD they were offering that hour?  (How often have you heard nonprofit professionals and board members say, “He is giving for the wrong reasons,”  because, of course, our reasons are the only right reasons.)

What hasn’t been researched is back-end surprise premiums like the book I received from Southern Poverty Law Center.  I did not request this book nor did I know I would receive it.  It just showed up with a letter that said I might enjoy it.  No one has researched how that affects giving.  (Southern Poverty Law Center is very sophisticated and always testing, so they might be researching it right now.)

So in summary, unconditional front-end premiums increase giving.  Conditional back-end premiums decrease giving.  The jury is still out on unexpected conditional back-end premiums.  As with everything, it never hurts to test it with your organization specifically.

Later in the week, I’ll share some more thoughts about thank you gifts and how to use them.

Posted in Acknowledgment, Direct Mail

2 Responses

  1. Ward

    Good blog post, Karen. As a recent staffer of the SPLC, I can attest how popular the back-end book gift is for the donor base. Like you mentioned in your analysis, the SPLC does not inform potential donors that they will receive a copy of Morris’ book if they make a gift of at least $25.00 to the SPLC. It comes as a surprise to the donors when they check their mail. The SPLC has been doing this for years. Donors love the book and while I worked at the Center, I discussed Morris’ book on donor visits countless times. I would also mail copies of the book to my planned giving donors if they had never received a copy of the book; it was a very nice touch-point and cultivation tool to use after a visit.

  2. Karen Climer

    Thank you for your comments. I admire the work of Southern Poverty Law Center. I also admire their direct mail program. The book is an excellent choice for a back-end premium. After I read it, I gave it to a friend who is a history teacher and has a particular interest in civil rights. I told him to read it and pass it on. I suggested he could even give it to one of his high school students. I don’t know if he is familiar with Southern Poverty Law Center, but after he reads the book, he will be. People don’t usually throw books away. They either keep them, or the books get passed around to different people. This is a brilliant back-end premium. I’m not surprised to hear that it has worked well. Thanks again for reading, and especially for sharing your first-hand knowledge of Southern Poverty Law Center.

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