Gifts of appreciation for a donor or member’s generosity can be a nice gesture. And they’re also a strategic way to increase engagement over time, especially for arts and culture organizations and institutions of higher education.
Whether you’re trying to get new members or donors in the door, or retain them after the first year, you may have considered implementing an incentive program, member benefits, or other ways to say, “thank you.”
You might even correlate these types of recognition with phases of the donor journey. Incentives encourage donors to get or stay involved; benefits tangibly reward them for specific actions and levels of support; thank yous provide tokens of gratitude for their participation and demonstrate the impact of their gifts. Think of each as a type of reward for responding to your call to action.
A targeted incentive campaign can include all three, as could any comprehensive donor engagement and stewardship plan. Yet it’s critical to understand how to use each strategically.
Following are strategies for incorporating these donor rewards within your fundraising.
Determine Your Objective
If you want to start an incentive campaign, your first question should always be: Why? What challenge are you attempting to solve by doing this? Possibilities include:
- Attracting new donors
- Retaining an existing group of donors – and maintaining their level of giving
- Motivating donors to increase their level of giving
Donor and member retention is a universal challenge for all types of nonprofit organizations. For institutions of higher education, alumni (who are a key source of gifts) can become disengaged and fail to continue their annual giving. Arts and culture institutions, likewise, often lose members after the first or second year of renewal.
Be mindful about your objectives, because once you begin offering incentives, it can be very challenging to close this door. Like with most new initiatives, we suggest starting small. It’s better to test a few different things on a smaller scale instead of making a large investment (of time and money) that might not work out as planned.
Decide How Donors Will Be Rewarded
Any organization can offer a simple gift, so consider the things that are truly meaningful to your organization. Expressions of gratitude tied to your mission and that reflect the uniqueness of your institution are the most successful.
Membership at arts and culture institutions is often seen as an entry point for engagement with an organization. This is a way for patrons to say, “I like what you’re doing, and I’d like to see more.” Frequently, we see that once a member gets to the five-year mark, he or she is likely to remain a member for a very long time. But the greatest challenge is that first renewal.
To encourage this first renewal, we recommend to clients that they show their appreciation for the donor’s membership. This is where thank you gifts can be the most beneficial – something like a signed program from a performance or souvenir from a popular exhibit will remind members of the wonderful experience they’ve had with you throughout the year.
It may not be flashy, but across all types of arts and culture organizations, access to parking is often one of the most coveted benefits. Placing access to parking at a higher membership tier might be just the thing to entice donors to upgrade.
For other types of organizations, consider smaller items that can be used in daily life, such as mugs, branded notepads, pens, power banks, and luggage tags. All of these can be easily shipped (and unlike clothing, you don’t have to worry about proper sizing). Include in your plan the logistics of fulfillment.
With the right donor base, digital incentives – like behind-the-scenes photos or videos, or specialized computer wallpaper – can be very effective.
In one success story, an organization simply offered supporters a branded mug for a monthly gift of $10 or more – and it worked for several reasons. Not only was it an easy amount for donors to budget, but it was also something that most didn’t mind; many were used to paying similar amounts for things like streaming services. In addition, the mug looked great, was an attractive incentive for the value, and was only available to monthly donors. In the end, the retention rate for this group was higher and there wasn’t as much concern about keeping them from year to year.
Finally, it’s important that incentive programs are structured with a set deadline, limited quantity of items, and a set monetary value. Some may be promoted exclusively via email or social media, while others fall within a full marketing campaign of print and digital assets. And remember to plan for unique situations, like what happens when someone makes a gift double the amount of the suggested minimum gift (do they get two items or just one?). These will be important to address with other FAQs.
Design Your Strategy with Data in Mind
After the initial gift, new donors that responded to an offer should be documented in the organization’s database. Analyzing this group can further identify insights for future messaging and touchpoints.
Emails are a powerful resource for gathering additional data. Does a donor pay special attention to emails about specific topics? This is how you can be strategic about your continued outreach. Challenge yourself to advance the relationship without needing incentives, while reserving these for cases where the donor isn’t quite there yet.
Above all, understand the journey of your donors. As we previously discussed, everyone knows it’s hard to get people in the door, and, in cases of membership, it’s almost as difficult getting individuals to renew for a second year. So, take advantage of opportunities to notify donors of their impact, celebrate members, and make them feel good! Help them to love their membership and think of their contribution as an investment, and when their first renewal comes up, feel free to get creative with perks.
Differentiate Your Donors to Assess Capacity and Increase Connectedness
Prospect analysis allows you to see who among your membership has the capacity to give more. There are two tools that can be used for this:
- A prospect pool analysis, screening for wealth capacity and inclination
- A survey to provide additional insight into donor preferences and affinity
We recommend that clients use a wealth screening system, which matches donor and prospect data to respected public databases, to target the right individuals for advancement up the membership ladder.
Alternatively, a survey will allow people to “raise their hand” about specific areas of interest, enabling organizations to align future requests for annual or major gift support to donors’ giving priorities. Surveys are ideal for helping arts and culture institutions gain insights into what their members value.
Incentive programs can be a great tool for bringing in new donors. Just remember to be mindful of these dynamics before launching any initiative.
If you are interested in learning more and applying these strategies at your institution, please contact us.