The Nonprofit Marketing Blog

Should you thank your donors with a gift?

As you know, I believe giving is best approached through social rather than market norms. What do I mean by that? Social norms are governed by values of community selflessness and altruism. When we are primed to give based on social norms, we donate because we want to make a difference and help others. Market norms are governed by calculated self-interest. When we are primed to give based on social norms, we donate to get a tote bag. While that premium may result in a gift, it tends to train donors to think of donations in a transactional way and can erode giving over time, as well as diminish the emotional strength of the relationship with the cause.

Researchers Lalin Anik, Lara Aknin, Michael Norton and Elizabeth Dunn have shown that giving makes you happy in the social norms context. Their research shows people who committed random acts of kindness were significantly happier than those who didn’t, and spending money on others makes you happier than spending money on yourself. They also discovered happier people help others more, and they give more. A positive mood makes you nicer! This makes a circle: giving makes you happy, and when you’re happy you give more, which makes you happier, which makes you give more.

Interestingly, if you highlight the payback of giving, it can help or hurt. Incentive-based appeals and gifts to donors seem to crowd out the inherent, altruistic motivation of those donors. Sending out something like a tote bag might actually detract from the warm-fuzzy a donor felt when they gave – and make them less altruistic in the future. In other words, if you train people to react to a market norm, they lose the social norm. For example, a matching gift campaign they studied elevated giving short term – but depressed giving over time. That said, reminding people of the happiness that giving provides them DOES have a good effect on generosity.

Okay, so back to tote bags and coffee mugs. Neuromarketing guru Roger Dooley has a new post at Forbes that underlines the importance of social norms thinking. Here is what he says:

“As most NPR listeners know, their periodic fundraisers tend to employ modest rewards for their donors – contribute $50 and get a Car Talk mug, $100 for an All Things Considered tote bag, etc. I always thought these benefits were a nice touch – certainly not a reason to make a contribution in and of themselves, but perhaps enough to get a contributor to bump up to the next donation level. Surprisingly, new research shows that this type of thank-you gift can actually reduce contributions. A paper in the Journal of Economic Psychology, The counterintuitive effects of thank-you gifts on charitable giving, describes a series of experiments that show that, contrary to expectations, rewarding contributors cuts donations in most circumstances. The Yale researchers who conducted the study, George Newman and Jeremy Shen, found that the most likely reason for the negative effect on contributions was “crowding out.” In essence, the prospect of receiving a gift activated a feeling of selfishness which, in turn, reduced altruism and hence cut the average donation.”

So what’s a nonprofit to do? Can you offer gifts without hurting results? Roger advises the following:

1. Talk about the gifts you offer as a way of advancing your mission rather than rewarding the donor. Says Dooley: In research, if a tote bag was said to have “our charity’s logo printed on the side, and when other people see the logo, it will raise awareness for our cause,” accepting the gift seemed like a means of helping the charity, and the gift’s negative effect on donations was neutralized. He says, “If you feel your gift strategy is working, this might be a way of boosting results. For example, a script might read, “When you put this Car Talk mug on your desk, your co-workers will be so jealous they’ll want to support our station too! So, help us reach the people around you by donating at least $75, and then put your mug where everyone will see it!”

2. Consider offering special, social events as gifts – they have positive effects. For example, an invitation to an exclusive dinner or lecture, or membership in an elite group.

3. Give the gift before the donation or as a surprise after the donation, rather than in exchange for the donation.

Dooley says, “What about those free address labels, greeting cards, and other items that show up in your mailbox, accompanied by a request for a donation? You may find them annoying and wasteful, but the reason you get them is that these gimmicks work. Many of these non-profits are sophisticated direct marketers who have tested and re-tested their offers, and know that those small gifts yield far more in donations than they cost. The psychological principle involved is “reciprocity” – when you get those mailing labels, you feel a subtle urge to reciprocate by making a donation. If you opt for the reciprocity strategy by giving the donor something in advance of a contribution, be sure to test different gifts. Ideally, your gift will maximize donations without being so expensive that it reduces the net revenue from the solicitation. And while mass mailings will generally use inexpensive items like labels and cards, don’t overlook the possibility of more targeted gifts to potential major donors. A package will have a much bigger impact than an envelope, and even a modest gift may be enough of a reciprocity trigger for the donor to agree to an in-person meeting, for example, or make an immediate contribution.”

The bottom line? In my opinion, the greatest gift you can give a donor is to make them feel they made a difference that mattered. Thank them with that and you stand the best chance of success as a fundraiser.

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Linda Lombardi
Content Manager

We’re here to help you win hearts and minds—and donations.

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