I frequently hear from fundraisers who believe premium-based fundraising (address labels and other things sent unasked for) is a force for evil that they must never, ever do.
There's no evidence to support that -- nothing that I or any other informed fundraising professional I know has ever encountered. A look at the numbers shows not only gooses the short-term numbers, but can also improve long-term fundraising metrics.
He should love it, because it raises an astounding amount of money and motivates millions of donors to support great causes.
(Point of clarification: many fundraisers call this freemium fundraising, because premium fundraising means to many offering something the donor will receive after she gives, not something that's in the envelope to begin with.)
Here's the topline story on freemium-based fundraising:
It boosts response rate. Sometimes by quite a lot. But it depresses average gift. And it depresses subsequent donor retention. But -- and this is the important part -- the higher volume of donors that results from the higher response rate often adds up to more high-value donors and greater long-term value than the non-freemium fundraising. As Sean says:
So, in every measure of predicted lifetime value, premiums win over non premiums. Actually, over ten years the ROI on a premium direct mail program if the charity is good at mid value and bequest follow up beats many other types of donor acquisition.
If you're doing well without freemiums, you may not need to look into them.
But if your program is struggling, as many are, freemiums may be the way to turn it around.