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Fundraising community divided over use of incentives1

Fundraising | Becky Slack | 1 Jan 2008

Debate about the use of incentives in direct mail packs continues to rage with the sector divided over the issue.

It all began towards the end of last year when the Institute of Fundraising published a submission from a group of direct marketing agencies to its consultation on the direct mail code of practice. The agencies said charities should stop using incentives to instil guilt in donors and that they should state how much the item cost on the mail pack. This was followed by research from the Fundraising Standards Board which confirmed that the majority (two-thirds) of donors think gifts are used to make them feel guilty. This research has also been submitted to the consultation.

Since then, PF has been inundated with feedback from the sector; some are outraged at the suggestion that charities restrict their use of incentives, while others have welcomed it.

Those who disagree have criticised the research for not being robust and for ignoring the fact that incentives work; response rates of packs containing incentives presented to PF have varied from 1 per cent to up to 20 per cent. Additionally, say supporters of incentives, they widen brand message delivery.

“These items have a life beyond the paper in a pack…we've all picked up a charity pen or seen a calendar in someone’s house or office. And added brand value hits the street too when you see umbrellas and shopping bags,” said Lisa Neville, operations director at data company, edm Media. “The fact is that people are carrying and using these items. It’s a sign of donor loyalty and passion for the cause.”

However, other fundraisers are not quite so indignant.

“Too many of us are mailing irrelevant materials to the wrong audiences. If we concentrated on what our donors want a little more and found out about their needs rather than just relentlessly telling them what we want them to hear we wouldn’t be facing a debate about the horrors of direct mail,” said Mark Phillips, managing director at Bluefrog, who also highlighted how a 1 per cent response might be viewed as good by the sector but as a disaster by the public. “Assuming people are essentially good-hearted and want to help, we really need to think about what is going wrong with 99 per cent of the people we mail,” he said.

Comments have even come from as far afield as Canada via the Professional Fundraising Facebook group. John Lepp of design agency Idea Design said that in his experience donors recruited via a premium package tend to be loyal. “If the premium is relevant and ‘fits’ and isn’t just a premium for the sake of a premium, it tends generally to do very well.”

But ultimately, whatever the sector thinks is irrelevant in comparison to donor’s views. Take for example the case of Ms Goldsmith from London. She wrote to the FRSB in November 2007 to highlight her “concerns” about the number of “gifts” she receives from charities. Since April 2007, she has received 37 different items, ranging from pens and umbrellas to rosary beads and a pair of fleece “slipperettes”. Not to mention countless sheets of printed address labels.

The reasoning behind her concern is three-fold, she says. Firstly, she feels she is expected to make a donation even though the charity states that there is no obligation to do so; secondly the waste is “inappropriate”; and thirdly, she believes many of the items are made in China and India “where workers are exploited and living in dire conditions – a painful irony there I feel”.

So what next for incentives? Megan Pacey, director of policy and campaigns at the Institute, says the first thing is to establish exactly what an incentive is. “Is it a thank you? Is it an incentive to give? Does it even matter?” she says. “But there is an issue of reputation risk and charities need to think about exactly why it is they are including them.”

Also needing to think long and hard about this issue is the working party tasked with drawing up the rules, which if the response so far is anything to go by is not going to be an easy task to complete.

What is an incentive

The FRSB has identified five different types of ‘incentives’ or ‘enclosures’

1. Incentives

   Used by membership charities who offer a gift to people who join up. Not particularly controversial and are not sent with a mailing but as a consequence of a new membership.

2. Catalysts

   Low value, relevant enclosures used to reinforce the work a charity does, for example, a conservation charity sending out a seed with a mailing.

3. Acknowledgements

   Sent to donors or volunteers to say thank you for their support over a long period of time or for a particular project, and that are not linked with a further call for donations.

4. Uplifts

   A low value enclosure used to help facilitate response, typically a pen.

5. Gifts

   Enclosures that are not linked to the work of the charity and that are perceived to be of high value to the charity, often creating feelings of guilt and discomfort among those who have received them.

Do you agree with the different types of enclosures listed here? Do you use others? Is it acceptable for charities to use all these types of enclosures or should some or all of them be banned?

Click here  for an executive summary of the Fundraising Standards Board’s research, Signed, Sealed, Delivered, what the public thinks of charity direct mail.

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