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A week ago I posted on the question, should you give your donors gifts? I got a big response via email. Many people wrote to say they agreed, and that the advice offered reflected their own experiences as fundraisers. A few even told me that their most consistent donors typically decline the gifts they offer. And a bunch wrote me with more questions. I got the most questions about events. I was asked, do the rules I offered on donor premiums apply at events? I decided that I should go to an events expert who was far smarter than me for the answers. So I contacted Jeff Shuck, CEO of Event 360. I have enormous respect for Jeff and his thought leadership, and so I asked him to answer that question for me. Here is his thoughtful response. Thank you Jeff for weighing in. This is good advice and recommended reading for all fundraisers!
Katya graciously asked me to weigh in on the use (and usefulness) of fundraising incentives after her wonderful blog post from last week raised several comments on the subject. In particular, she received a thoughtful inquiry about whether the findings of neuromarketer Roger Dooley – that fundraising gifts are actually a disincentive to donations – apply in the peer-to-peer space, where our constituents are sometimes not donors directly but the networkers who connect us to those donors. If donor gifts actually depress donations, does that mean that fundraising incentives like t-shirts, tote bags, and custom jerseys are not effective in getting participants to solicit gifts from their friends?
I should be upfront about my areas of expertise, as well as my gaps: I lead the country’s largest event fundraising firm. What I am not is a neuromarketer, psychologist, or behavioral economist. That said, I often feel like I have taken on a minor career in fundraising swag, and so if Katya is offering me a soapbox, I’m standing on it.
Allow me to first say that from what I’ve observed, fundraising incentives in some cases can be useful in driving fundraising behavior. Many large-scale peer-to-peer programs are powered by t-shirts, and there’s no denying that for some constituents the thrill of a new branded windbreaker or golf towel is a powerful call to action.
But – there’s a but. As my clients and team members will attest, I hardly ever recommend incentives, and I think that on the whole they are a real problem in my industry. Here are a few reasons why.
• Confusion between the reward and the ask. A main piece of evidence that incentives appear to work is the fact that in incentive-based programs there are fundraising peaks at incentive levels. In other words, if your event program gives out a shirt at $100 and a jacket at $500, you will probably see fundraising performance peak at those levels. So the incentive must work, right? However, it is not at all clear if the incentives are the cause or the effect. An organization with incentive levels at $100 and $500 will communicate much more actively about why participants should raise $100 and $500, and about the need for fundraising in general. Is it the reward or the increased communication that has inspired the fundraising activity? Our firm has run programs in which we’ve used specific, mission-based asks in place of incentives and have achieved the same results, with lower costs and higher mission awareness. In my experience, you are just as likely to drive action by asking for action (and creating a powerful case to support it) than by giving away toasters and oven mitts.
• Reciprocity is a poor way to change the world. As Dooley details, fundraising gifts work based on a psychological principle of “reciprocity” – the innate human obligation to return a favor bestowed with a favor given. However, Dooley (and Cialdini, and the Heath brothers, and many others) have also emphasized that reciprocity is, in a real sense, a way to take advantage of people’s altruism. They’ll help you, but they’ll resent you for it. While that is an effective way to hit year-end goals, it is a horrible way to create long-term constituents.
• Incentives beget more incentives. An incentive culture creates, in almost every case, an incentive death spiral. Once you start recruiting people with discounts and motivating them with gifts, you will increasingly find that you turn to discounts and gifts to grow your program. And, it will become increasingly hard to hit “reset” and re-focus your program on mission. This is the same reason, incidentally, that I love Groupon for marketing your nail salon but not for marketing your fundraising program. If I can buy your $100 gala ticket for $50, why would I ever pay $100?
I could go on and on, but at the end of the day Katya was right: “The greatest gift you can give a donor is to make them feel they made a difference that mattered.” The number one reason people give to charity is because they are asked; and the most effective asks are rooted in a powerful vision for a better world. Events – and campaigns, and appeals, and donor visits, and mailings, and websites – are supposed to be occasions to ASK. Often we turn them into mechanisms to help us avoid the ask: “We have a budget shortfall – let’s hold a dinner!”
Incentives trick us into missing the real conversation. Should we thank people? Absolutely. And in the right context, colored shirts or jackets or jerseys can be a nice way to recognize people who committed to the world we’re working to create. But every time we talk about t-shirts instead of fundraising, we’re not only missing the chance to talk about our mission – we’re cheapening it, too.
I’ll admit, it is a lot easier to say “raise $100 and get a t-shirt” than it is to ask, “There is too much pain and suffering in the world for either of us, and I think you agree, and so will you raise $100 to help me change it?” But at the end of the day, incentives are transactional; changing the world is relational. A better world, sadly, cannot be bought for a large cotton cloth; nor will someone who participates for the cotton cloth be truly invested in your vision of that world.
You’re worth more than that. Focus on the conversation that matters, and for backing up why it matters with authentic stories of how you’re making a tangible difference. Leave the swag for the sales conference.
@JeffShuck is co-founder and CEO of The Event 360, a Chicago-based company focused on helping organizations use events to create a better world. And what a family, right?
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