I had a great discussion the other day with a local non-profit regarding the true pros and cons of incentivizing a campaign. The idea to incentivizing is clear: give a little to hopefully receive more in return.

There are two common approaches to incentivizing – give your donors and prospects a gift prior to their donation, or give them a gift after their donation. Whether you give a gift up front, or promise something extra for their donation, there are some clear benefits to this tactic:

  • The upfront gift (like those personalized address labels the are sent with a donation request) are designed to play off guilt, and increase the feeling in the reader of ‘returning the favour’.
  • The incentive on reply is adding further value to the money and the recipient is enticed by the promise of ‘something more’ for their give.

These are great strategies that have proven time and time again to be very effective at boosting response… but at what cost? Without due consideration there can be some risks and long term negative effects involved in these tactics that ultimately can result in negating, or even reducing, the actual return per dollar. Consider the following:

  1. Have you raised donor expectations? By drawing donors (in particular new donors) in with the promise of something more, be careful you’re not conditioning these individuals to continue to expect gifts from you on future requests. If you make a habit of giving away some type of gift or incentive you may find yourself constantly having to throw more at these donors to keep them giving, eventually eating away at the return per dollar. If it’s a one-time gift, make it clear.
  2. Will it turn away better donors? Individuals that give to non-profits can be very sensitive to how their dollar is spent, and rightfully so. If they see, or even remotely feel, that their donation goes more to marketing dollars (or marketing agencies) than the real cause then they will have no hesitation NOT giving to you… and also sharing with their friends why. The best is if you can have your gift sponsored and to make sure the recipients know this.
  3. Are these the donors you’re looking? Donors that give on the basis of getting something can be fickle, and if you don’t continually keep incentivizing them it is likely they’ll shift to the next non-profit in line with a better or hipper gift. You want donors that believe in your cause, so sell them on good copy and the benefits you receive to their donation, not good gifts.
  4. Have you considered all the costs? A great article on this was written by Heidi Cohen and can be found here (The Real Cost of Free Stuff) which outlines some of the additional costs that come with fulfilling gifts that aren’t always immediately apparent, and can result in costing you much more than anticipated.

I should clarify that it’s obvious that incentivizing does work, as there are numerous non-profits that employ this strategy very effectively. It’s not a decision to be taken lightly however, and without a clear understanding of the risks involved you may ultimately do more harm than good to your campaign.