Donor gifts, like tote bags and water bottles, might do more harm than good.
If it’s better to give than to receive, then why do charities and nonprofit groups insist on shoving stuff in our faces?
As anyone who’s jammed yet another stack of return address labels into a drawer or flung a branded tote bag on a heap of other branded tote bags, both direct solicitations and the giveaways they precede or follow have spun out of control. According to a 2016 Texas A&M University study, roughly 60 percent of American nonprofit solicitations include these tokens of appreciation — “donor premiums,” in fundraising parlance — upfront or as a reward for donating.
In a way, the strategy is understandable: The world is a terrible place right now, and the rise of social media and crowdfunding platforms like GoFundMe means would-be donors are stretched thin by a growing chorus of appeals both private and public. (There’s even a term for it: “empathy fatigue.”) Tempting the public with T-shirts, insulated cooler totes, or even clean beauty starter sets is one tactic nonprofits employ to win hearts and pocketbooks.
But experts say the practice is counterintuitive, antiquated, and expensive. It may even provoke frustration, producing the opposite of the intended effect.
No one could tell me when donor premiums began or who started them. The point is they worked — at least for a while. Before we knew it, dangling gifts became the most popular way of coaxing people to crack open their wallets a little more. Public radio, in particular, is a whiz at using donation tiers to spur giving. Want an Oregon Public Broadcasting-logoed reusable straw? Donate $90. Have your eye on an inflatable solar lantern instead? It’s yours for $180.
It can be effective, too. Simran Sethi, a journalist who hops between North Carolina, Mexico, and Italy, told me she nudged up her donation from $50 to $75 once just to get the WNYC tote bag. “I just wanted to show my NPR pride!” she says. Lindsay Diamond, who works for the University of Colorado Boulder, admitted to ponying up more so she could snag a Tiny Desk Concerts hoodie.
“The gifts make recognition tangible and more rewarding,” explains Kit Yarrow, a consumer psychologist and author of Decoding the New Consumer Mind: How and Why We Shop and Buy. Like Sethi, people may want them to show off their contribution or affiliation, or perhaps connect with other like-minded folks. Donation levels that feature increasingly valuable gifts do indeed promote “bump-up spending,” Yarrow says. “Even when we’re donating, we consider value pricing.”
Even so, what may seem like good value for a donor may not be the same for the organization. A man from Chicago — name redacted to protect the guilty — for instance, confessed to donating a dollar to NPR just for the socks. “It was a gift-of-any-size campaign, and I knew I was probably costing them money,” he says. (He redeemed himself by shelling out later on.)
Indeed, nonprofits often spend more on donors than they receive. Kelsey Nelson, a consultant at Campbell & Company, a Washington, D.C. firm that advises nonprofits, estimates it can take between $1.50 and $2 to raise a dollar from any new donor. This is built into the organization’s budget, she says, and most nonprofits expect to acquire new donors “at an upfront loss.” What nonprofits have in mind is a much longer-term play. “As you bring new people in the door, they get less expensive to the organization the more years in a row they give,” she adds.
Premiums are way of “giving to get,” Nelson says. They generally fall into two categories. There’s the cheaper front-end (or unconditional) type, which are distributed unsolicited, like return address labels, greeting cards, calendars, decals, and notepads. Then there’s the more expensive back-end (or conditional) kind — deal sweeteners that take the form of anything from pens to Bluetooth speakers.
Unconditional gifts, which are yours to keep whether you donate or not, play on guilt, says Joseph Ferrari, a professor of psychology at DePaul University’s College of Science and Health. Since the items are purchased by the organization in bulk, they don’t cost a lot. But the nonprofit is hoping you’ll “feel obligated enough to send them some money,” he says. Still, they’re designed to cast a wider net across a broad swath of potential donors. Nonprofits send them out into the world and cross their fingers something comes back. The outlook is pretty grim. Conventional philanthropic wisdom has it that less than 1 percent of direct-mail appeals results in a first-time donation.
Backend premiums can be more targeted because charities have a rough idea of the type of person who would give to them, and the kind of swag that might trigger a donation. It’s why tote bags, which can telegraph the type of person you are — or the tribe to which you wish to belong — are popular giveaways from public radio and magazines. (All hail the ubiquitous New Yorker carryall, which has become a status symbol in its own right.) “We increasingly search for ways to be seen and connect with others,” Yarrow says.
There are other considerations. How many tote bags does one person need? Or water bottles for that matter? Because I’m a grinch who doesn’t send Christmas cards, I use return address labels exactly twice every quarter to dispatch estimated taxes to Uncle Sam and whoever the New Jersey equivalent of Uncle Sam is. Yet I have reams and reams of the things that I can’t bring myself to throw away.
Not to mention there’s a reason why Marie Kondo does such brisk trade in the United States: Nearly half of Americans, according to one 2016 poll, say they consider their homes to be at least somewhat cluttered with items they no longer use. One in seven have a room they cannot use because it’s filled with things they rarely use. Too much clutter, Ferrari’s research shows, can spark anxiety, stress, and general life dissatisfaction.
Finding charities and nonprofits who would be willing to speak to me proved a more onerous task than I anticipated. Most ignored me. Plenty declined to comment. And the few that did respond were defensive — even, dare I say, testy? Only Natural Resources Defense Council, the environmental rights group, was open with me with the economics of how their gifting works. It offers only a reusable cotton tote, which costs $3, is made in the United States, and is available to new or lapsed members who contribute $15 or more. Members have the option to opt out, which Kate Kiely, deputy director of national media, says happens 50 percent of the time.
To be fair, not all premium schemes are created equal. Some gifts can take the form of intangibles, such as a donation to food bank or an online subscription to a newspaper. And not all nonprofits have premium schemes. Greenpeace doesn’t because premiums don’t align with its values. Neither does Story of Stuff, whose raison d’être is to, well, cut back on stuff. “It’s almost counterintuitive for us to be giving out swag on some level,” says Marlena Reimer, development manager at The Story of Stuff.
At the same time, people like Jacqueline WayneGuite, exhibitions manager at the National Hellenic Museum in Chicago, worry donor premiums are becoming table stakes — and an additional cost burden for patronage-reliant not-for-profits like museums, science centers, and zoos that may feel pressured to keep up with the trend. To give a gift, an organization might have to jack up membership costs or accept the blow to its bottom line.
“For me, the experience is more important than getting physical stuff, but [expectations have] changed over time,” she says.
Donor premiums may not even work, according to Cygnus Applied Research’s Penelope Burk, who has polled a quarter of a million Americans about their philanthropy practices over the past 20 years. In every survey, she says, two issues always come up: the oversolicitation of donations and the overprovision of tokens — which respondents refer to as junk, “and other very critical substitute words”— both before and after they give.
“They’re entirely perplexed that a not-for-profit would spend some of the money that’s coming from donors on stuff they never asked for, don’t want, and have boxes of in their basements already,” Burk says. Those feelings, she notes, have grown more pronounced with every study she conducts. If donors do end up contributing, they may chip in less than they can afford because the premium casts a pall over the organization’s financial efficacy. Or they might knock the charity off their lists entirely. Younger donors, especially, are becoming more strategic with their largesse.
Research bears this out. A 2012 study by Yale psychologists found that the offer of a gift reduced feelings of altruism regardless of whether the gift was “desirable or undesirable, the charity was familiar or unfamiliar, or the gift was more or less valuable.” The authors attributed this to a “crowding-out effect,” one that may create ambiguity about the donor’s perhaps-less-than-unselfish motivations for giving.
As older, less discriminating donors die off, so has unblinkered loyalty to once-favored causes. Donor attrition — the loss of donors who have made at least one gift to a nonprofit — now tops 90 percent, Burk says.
Even more bad news for nonprofits: Public trust in these groups is on a downward slide. While the majority of Americans say trust is essential before giving, according to a recent survey by the Better Business Bureau’s Wise Giving Alliance, only 19 percent said they “highly trust” charities.
Premiums can feel incongruous if they don’t jibe with the nonprofit’s mission. Or worse, run counter to it. One of Burk’s survey respondents said he received a tote bag wrapped in multiple layers of plastic packaging. Not a big deal for most people, perhaps, except the organization supposedly championed ocean conservation. Among its most pressing goals? The reduction of single-use plastic in the environment.
Squandering donor goodwill can be a fatal mistake. “When you acquire a donor today, it’s nothing short of a statistical miracle,” Burk says. “Because there are 1.2 million 501(c)(3)s out there raising money. And the fact that a donor decided to give to you, in a time when donors are supporting fewer causes, is an astounding achievement.”
Nonprofits want to hang on to donors because once they’re in the door, statistically their contributions will increase over time. Blow it, however, and the organization loses not only the next gift in line but potentially a “lifetime of gifts, and possibly a residual bequest.”
That’s not to say premiums are completely pointless. While a pair of socks bears little relation to, say, NPR — other than keeping your toes warm while listening to Terry Gross — early access to a special podcast dovetails perfectly with public radio’s mission of accessible information. Donors might be told they’re funding a new initiative, such as educational programming for refugee children. “They can tell people they helped make that happen,” Burk said.
Even so, she insists, donors aren’t picky. Since 1997, she’s picked up three common “wants”: to be acknowledged promptly for their gift; to see their gift assigned to a specific, actionable area of focus; and to be apprised of the progress their last gift helped make.
“Never, when we ask this question, do donors say, ‘I want that coffee mug,” she says.
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Author: Jasmin Malik Chua
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