Using Donor Incentives to Attract or Retain Supporters On the Cheap

Donor Incentives for Nonprofit Fundraising

Other than the feel-good act of donating to a cause they care about, what does it take to get someone to give? Whether you’re trying to get a supporter to donate for the first time or encourage a current donor to make another gift, some nonprofits are turning to donor incentives to seal the deal.

But not all donor recognition gifts are created equal (nor are they all cost-effective), and you definitely don’t want the idea of rewards for donations to make people wonder if you’re going to spend their donation wisely. Instead, get 21 ideas for free or low-cost fundraising incentives you can use to motivate your nonprofit’s supporters in ways that connect to your mission and your donor’s goals.

Do Incentives Work?

Well, it depends. One study shows that some donors don’t prefer to receive gifts in exchange for a donation. Other research seems to indicate that, although past donors might not be motivated by rewards, offering incentives to new prospects could be an effective tactic as long as it doesn’t diminish the sense of “good” they are doing.

The key to effective donor incentives is knowing your audience. Some supporters won’t want a reward dangled in front of them because it makes their philanthropy seem less genuine. Some people, like those participating in a crowdfunding campaign, will expect rewards. And at the same time, reports like the Donor Experience Study say that supporters want to feel like they are making an impact and are part of your nonprofit’s circle of friends in highly personalized ways.

With so much variety in donor preferences, it’s no wonder that incentives are a tricky business!

When you understand why different people give to your organization, you’ll be more likely to choose incentives that make them feel closer to your cause. (Try making some donor personas.) Doesn’t it seem unlikely that a coffee mug or tote bag really serve this purpose? Who wants a t-shirt that commemorates a donation that was made in response to a natural disaster, humanitarian crisis or heart-wrenching social issue?

Incentives can work when you keep them donor-centric and grounded in your mission. We’ll show you what we mean in the examples below.

Keeping it Free or Low-Cost

In addition to figuring out what your supporters value, you have another sort of value to worry about: the price of the incentives you offer.

First, it can be a pain (and budget killer) to manage a physical inventory of rewards and incentives that need to be purchased, branded and shipped.

Second, the IRS restricts the amount of benefit that someone can receive from a donation if they want the full amount to be tax-deductible. We’re not lawyers or accountants, so you’ll want to consult with professionals about what’s allowable according to what the IRS says about charitable contributions. For example, in some cases, the value of the donor incentive can’t be more than 2% of the donation itself (or more than $50, whichever amount is less).

For both of these reasons, we’re fans of offering digital products or more experience-based donor perks that are free or low-cost to produce. You’ll still need to have systems in place to follow-up with donors—and you’ll still be spending staff time putting them together—but there should be fewer headaches overall.

Types of Donor Incentives

The best donor perks keep someone tied to your mission rather than just giving them something for the sake of it. Depending on the personal goals and values of your typical supporter, consider the following types of donor incentives.

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Recognition

For donors who want to feel publicly acknowledged for their contribution, recognition-type incentives include things like a donor list on your website or in a special publication as well as a personalized thank you note.

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Community

Some donors might be motivated to give because they see their contribution as giving them access to a community that they’d like to be a part of and share with others. Community-type donor incentives could include a certificate or membership card, exclusive newsletters, and the ability to say that they are part of a donor group with its own identity or name.

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Special Access

Offering experiences like in-person tours or behind-the-scenes videos can deepen a donor’s understanding of and engagement with your cause. Incentives focused on special access would be a good fit for donor retention efforts when you want supporters to feel like insiders.

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Nothing At All

Then there are the donors out there who only want the good feelings from knowing they make a difference. How amazing! But don’t fall into the trap of thinking that they’ll give again and again without some effort and well-crafted messaging on your part. Donors still want to hear how their gift is making an impact, like receiving periodic emails or letters, even if you don’t advertise that they’ll be getting them after they give.

If you decide to go the “nothing at all” route simply because you don’t have the capacity to offer anything more right now, that’s OK, too. Don’t feel the need to sell non-benefit perks as something more—like telling potential monthly donors that they’ll get less paperwork or appeal letters. Reframe your message and focus on your communications beyond the receipt.

For a great example, here’s how City Meals talks about the benefit of signing up for recurring donations:

“Your monthly gift guarantees nourishing meals and human companionship for a frail aged New Yorker who can no longer shop or cook for themselves. A monthly donation of any amount is an easy way to make Sundays special for your homebound elderly neighbors.”

21 Donor Incentives for Different Scenarios

Ready to ditch the promotional pens and magnets? We’ve put together examples of free or low-cost donor incentives using three hypothetical nonprofit scenarios.

Donor Incentives Examples

Membership Drive

For their annual membership drive, a leadership organization for professional women wants to encourage existing members to renew while increasing their overall number of members by attracting recent college graduates. The nonprofit uses member dues to offer educational scholarships. In order to appeal to both groups’ interest in belonging to a supportive network, they could offer incentives such as:

  • A digital member badge that can be shared on social media and LinkedIn along with sample language for a resume
  • A printable certificate recognizing each member by name and acknowledging their support of the scholarship fund
  • Early bird invitations to networking and social events
  • The ability to submit professional and personal updates to the member newsletter and directory
  • Access to a professional development webinar exclusively for members
  • Mini career coaching sessions for the first new members that sign up
  • A matching gift from a sponsor, who donates $100 the scholarship fund for every 10 members that renew

 

Donor Incentives Examples

Giving Day Campaign

A community garden is raising money to expand its acreage and grow crops for the nearby food bank. To help get more local people to contribute, the nonprofit decides to participate in their area’s annual giving day. In order to attract and celebrate new supporters within this short time period, they could offer incentives such as:

  • Listing donor names on the website as well as on a bulletin board at the new location
  • An ebook of recipes from local chefs featuring the foods grown in the garden
  • A personalized thank you video from staff, a board member or a volunteer
  • The file for a beautiful, high-resolution photo of garden plants that’s suitable for framing
  • The ability to take a personal tour of the garden along with a friend or family member
  • Designation as being a part of the Seed Starter supporter group, getting exclusive email updates on the project’s progress
  • An invitation to a “garden party” volunteer day with a special guest speaker

 

Donor Incentives Examples

Monthly Giving Program

Nature Knowledge (the fictional outdoor education nonprofit used in our demo sites) is launching a monthly giving program to deepen their relationship with current donors, many of whom are family members and program alumni. To help supporters feel connected to students and national parks throughout the year, the organization could offer donor incentives like:

  • Access to an invitation-only Facebook group where staff post live videos from their travels as well as nature stories and trip reports from students
  • An annual impact report along with the receipt for their yearly donation amount
  • A set of screensavers or background images for computers and phones that feature the parks where programs take place
  • A handwritten postcard from a student participating in the organization’s programs
  • Access to password-protected content like checklists for camping with kids or sample lesson plans for outdoor educators
  • The ability to enroll someone in an upcoming course at a special rate or in advance of public registration
  • An online shopping discount code for outdoor gear provided by one of the group’s sponsors

As you can see, there are lots of opportunities to develop free or low-cost donor incentives, especially when you focus on your digital channels and existing marketing efforts. If you decide to use these kinds of fundraising perks at your organization, be sure to consider the preferences and motivations of different types of donors in order to come up with offerings that keep your mission and their values front and center.

Is your nonprofit using donor incentives to motivate your supporters or members? Have you struggled to come up with rewards for donations that feel right for your cause? Let’s talk in the comments. I’d also love to hear about any donor perks that helped motivate you to give!