Report: Donor Incentive Use Rises Among Fundraisers

Use of donor incentives among nonprofit fundraisers was up across most categories of mailers during the first quarter, according to ParadyszMatera's MarketTrends fundraising reports.

The list brokerage and research firm generates the reports quarterly through its proprietary MarketRelevance direct mail promotion-tracking tool. The reports track offers and promotions in the disease/health, nature/wildlife and humanitarian fundraising categories. The firm also maintains a database of 12-month list universe counts on more than 300 nonprofit list properties through its research division.

Across all categories, 61 percent of fundraising solicitations tracked used some type of incentive in the quarter, up from 58 percent for all of 2003. ParadyszMatera tracked 574 new donor solicitations in the first quarter and 2,144 in all of 2003.

As for specific incentives, 37 percent of mailers used premiums, or back-end incentives, in the quarter, up from 32 percent in 2003. “Freemiums,” or front-end incentives, were used by 41 percent of first-quarter fundraisers compared with 36 percent in 2003. Sweepstakes dropped in the quarter to 2 percent versus 4 percent in 2003.

While freemiums were the most popular overall incentive in the first quarter, address labels were the winner within the freemium category. Of all fundraisers tracked, 26 percent used address-label freemiums in the quarter, up from 23 percent last year. Other freemiums in the quarter included stickers, used by 13 percent, greeting cards by 4 percent, calendars by 2 percent and other types of freemiums, such as notepads, by 10 percent.

Though calendar freemiums were down 1 percentage point in the quarter versus 2003 and greeting card freemiums were flat at 4 percent, both typically are used more in the fourth quarter, said Glenn Lalich, director, research at ParadyszMatera, New York.

“First-quarter promotion information does not always hold true throughout the year,” he said. “Calendars appear to be down in the first quarter, but certain premiums are seasonal.”

Lalich expects the use of personalized address labels to continue to rise as it has for the past few years.

“We expect this trend to at least hold in 2004, as very few address-label mailers have successfully tested out of the device,” he said. “It is more common of late, in fact, to see mailers add additional items to their address-label efforts, like decorative stickers, gift labels and even a few food recipes.”

The hottest new test freemium is notepads, he added.

In specific fundraiser categories, notable incentive increases were evident.

The disease/health category saw a 9 percentage-point rise in freemium use in the first quarter compared with all of 2003. This resulted partly from three mailers boosting freemium use in the quarter. The American Diabetes Association sent four freemium promotions versus one in the first quarter of 2003; Easter Seals sent six first-quarter freemium promotions in 2004 as opposed to two in first-quarter 2003; and St. Jude Children's Research Hospital mailed five in the quarter versus two in 2003's first quarter.

Overall incentive use in this category was 52 percent, roughly equal with what the category saw in 2003. ParadyszMatera tracked mailings from 199 organizations in disease/health.

In the nature/wildlife category, 99 percent of all first-quarter mailings included at least one incentive. Premiums were used in 98 percent of the mailings, up 8 percentage points from 2003, and freemiums were used in 57 percent, up 5 points over 2003. There were 112 organizations in nature/wildlife.

Only 39 percent of promotions from humanitarian fundraisers included an incentive in the first quarter, edging up from 38 percent in 2003. In the first quarter, 197 humanitarian organizations were tracked.

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