Should you offer incentives to give?

It would be nice if donors gave support for purely altruistic reasons. Clearly, they must believe in your work. But that alone is not enough to motivate some people to make exceptionally generous contributions.

A fundraiser for a theological seminary put it this way:

Think of the four R's: research, romance, request and recognition. Ernest W Wood, vice-president of the Russ Reid Company, suggests that “major gift solicitation is about 25% research, 60% romance, 5% request and 10% recognition.”⁸¹

This section will focus on that important 10%, recognition. There are a variety of types of recognition you can offer as incentives. Before launching your major donor campaign, select the appropriate incentives for your organization.

Offer Public Recognition

All across Canada — indeed, all over the world — there are hospitals, theatres, schools, art galleries, recreation centres, houses of worship and many other buildings named after major donors. Inside, lesser donors are honoured with plaques and memorial scrolls.

Governor General Lord Stanley is immortalized in the Stanley Cup. Tobacco and alcohol companies have their names prominently displayed as sponsors of sporting events and artistic performances. Universities name research chairs after donors.

Equipment, too, may bear the name of the donor. Virtually everyone has seen a van rolling down the street with the name of a sponsor on the side.

These opportunities are not limited to organizations raising funds for buildings and equipment, though it is admittedly easier for groups with such goals to take advantage of them.

Trophies and printed materials can carry the donor's name. Testimonial dinners can be held to thank major donors.

Few people will come right out and admit that they want such recognition. However, you ignore this rule at your peril, as Jerry Panas points out:

…The donor, hand held high in protest, may deny any inclination for special recognition. But when one of the country's major zoos somehow managed to forget to invite its largest benefactor to an opening of a new section in the zoo — an addition the benefactor made possible — the zoo sealed its future for further gifts.⁸²

Our panel of donors had revealing comments on this, too.

Nancy Jackman: What is my reaction to recognition opportunities? I didn't give a darn about them, until something happened in my life that changed [my opinion]. I found them absolutely irrelevant. In fact as an old Methodist, I found them offensive. Then I ran for political nomination and I needed recognition…
Some people like it; some people hate it. Find out what they like. I don't want six pieces of mail coming in every day, but I wouldn't mind a bouquet of flowers. Find out what people like. That's part of your research. I like balloons, too.

Lyman Henderson: Above all, recognition and thanks. Particularly thanks. It depends on the kind of donor. Some people like to get their name in lights. We have various rooms and halls named after people… Ann and I are hoping to get our immortality some other way, but nevertheless we do like to be thanked. The thanks should be a continuous effort, not just a “wham-bam-thank-you-ma'am” kind of thing.

Linda Bronfman: I don't always choose to do things anonymously. What I'm trying to do is not just say yes to a request; it's to make a change, to help an organization meet its goals — which are the goals that I share, or I wouldn't fund it. If I feel that [having] my name attached to it will assist you, I will do that. While initially I wasn't so keen on it, [now it appears that] to some people, if they know that Linda Bronfman is funding this, it must be a good cause. Fortunately my name still has some good associations to it — maybe not to all of you — and so I use it.⁸³

Some of the largest donations in the country have come from people who did not want their names released. Some have even gone to elaborate lengths to use intermediaries, so that even the recipient organization does not know who gave the money.

Why do they want to be anonymous? Perhaps it's modesty. Perhaps they are fulfilling a deeply held dream or belief. For the most part, they don't want to encourage others to approach them. Then too, in some cases, they are atoning privately for some real or imagined guilt.

These people may well respond to the approaches suggested elsewhere. For the moment, however, let's concentrate on those who do enjoy the spotlight or will at least accept it for the good of the campaign.

There are four main tasks here:

• Create recognition opportunities.
• Decide which types of recognition are appropriate to your organization.
• Determine the worth of each recognition opportunity in the eyes of donors.
• Link them to the prospects who will respond best.

Action: Create recognition opportunities.

List all the options you have — even those you may not consider worthy.

Recognition opportunities can be relatively obvious. It is easy to put plaques on buildings and equipment.

But sometimes creativity is required. Virtually every piece of equipment can become a recognition opportunity. Here are some examples:

• If a donor gives books for a library, put plaques at the door, on the shelves, or inside the front covers of the books.
• Most printed material offers recognition potential on the front or back cover, or on a list inside.
• If a donor gives a photocopier for the office, it is easy to put a plaque nearby. You may even have the donor's name appear on the copies made — but do so selectively.
• Thank the donors by putting their names on coffee cups in the cafeteria. A company that has its own mugs may donate them (think of doughnut shops and coffee brands). Or, a local potter could make individual cups with the donors' names in the clay or glaze.
• Programs can be named in their honour, or events held.
• At least one hospital has strategically placed plaques thanking the donors who contributed each cubicle in the public toilets.

Create a Giving Club

Giving clubs are a common technique. Most symphony orchestras invite donors to become Benefactors, Sustainers, or Patrons by giving a predetermined amount of money. University alumni associations, art galleries and other large groups also have a variety of clubs for this purpose.

Most offer benefits to the `club members'. These may include first choice for tickets, discounts, or even special private members' lounges.

Groups holding events may offer free passes, so the club member can bring one or more guests. This provides the member a way to show their pride in contributing to the work done — or the social status it conveys. It also benefits the organization by introducing new contacts. If you use this method, ask that all guests be signed in, so you can collect names and addresses for later follow-up.

Be creative in naming the giving levels. The names are part of the feeling of specialness.

The Conservation Foundation of Greater Toronto, which raises money for parkland, created the following clubs, each offering these benefits:

Friend of Greenspace ($35-$98)
benefits offered:

• wallet card
• sticker
• four issues of Focus on Greenspace newsletter

Greenspace Supporter ($99-$249)

• all the above, plus:
• poster suitable for framing
• recognition in the annual report

Greenspace Companion ($250-$499)

• all the above, plus:
• Conservation Area pass

Greenspace Pioneer ($500-$999)

• all the above, plus:
• recognition in Focus on Greenspace
• complimentary pass to all facilities
• certificate suitable for framing

Club Greenspace ($1000-$2999)

• all the above, plus:
• distinctive certificate
• invitation for two to annual reception
• invitation to three special events:
• Garden Party
• Maple Syrup Festival
• Arbor Day Foundation
• lapel pin

The Greenspace Guild ($3000-$4999)

• all the above, plus:
• recognition on “Tree of Life” plaques
• tree planted in donor's honour
• framed poster with recognition plate

White Pine Society ($5000-$9999)

• all the above, plus:
• grove of white pines planted in the donor's honour provision of group picnic facility

Order of the Blue Heron ($10,000-$19,999)

• all the above, plus:
• framed photo of unique Greenspace site with plaque
• Blue Heron tie or scarf

Individual/Corporate Sponsor ($20,000 and up)
negotiated benefits:

• major recognition in program
• staff and/or executive passes
• special official opening
• extensive on-site recognition
• identification with program in corporate marketing strategy, if desired

This list may be too long for most groups, but it shows the potential.

At the simplest level, even the smallest organization can list donors' names in the group's annual report or newsletter. Some groups divide the lists into categories, based on the amount given, but this is not essential.

The most common benefit of joining a giving club is the easiest for small groups to offer: admission to a private reception. It may be in someone's home or in a public hall. It may be before a public performance, if you hold these.

One organization invites donors to become Benefactors for a gift of $100. This entitles them to attend a `free' reception. At the reception, they are urged to become members of the President's Circle for $250; they can attend two free receptions. At these receptions, in turn, they are invited to join the Chancellor's Society for $500; that entitles them to attend three free receptions — and so on.

Donors can also be given souvenirs to take away. A certificate, a framed photo, or a piece of artwork, can each serve as a worthwhile memento of a donor's gift. These can, in fact, be better than recognition on the site of the nonprofit's operations, since the donor can see the memento daily. Ideally, it will be placed in a prominent spot as a conversation piece, giving the donor an excuse for a moment of modest glory. This serves your interests as well, since it may spark others to consider supporting your group too.

On any souvenir, be sure to include a small plaque in a conspicuous location, so the donor and others can easily see what group presented it. One donor, showing off her personal `Hall of Honours', had to take one framed photo off the wall to examine the inscription on the back before she could remember who had given it to her.

As soon as you have 10 or 15 members in your current top level, it is time to add another, even more rarefied giving club. Few people, if any, will give more than the amount required for admission to the most exalted club.

Start by considering all the traditional techniques used by other nonprofit groups. A quick tour of the nearest community centre, hospital, university, artistic space, or hockey rink will reveal tried and true techniques. Visit them with a notepad and keep an eye out for all that they have done.

Study the fundraising journals, as well. Review the ads in a few issues. Several companies specialize in producing bricks and tiles embedded with donors' names for use in walkways and walls. Others produce “Tree of Life” sculptures, where donors' names are inscribed on roots, trunk, branches or leaves, depending on the level of donation. Custom sculpture is available in all materials.

Now be creative. What can you do that is different and unique to your group? · Theatre London, in London, Ontario, once made poster-size photos of

donors and used these as wallpaper in the main auditorium.

• Harbord Collegiate Institute, a Toronto high school, raised money for scholarships by giving donors plaques mounted with pieces of the old floor they had trodden for years. (The floor was being ripped up for renovations anyway.)
• Churches for centuries have had donors' faces painted in among the saints and cherubs on the stained glass windows, or carved in granite gargoyles.

Action: Decide which opportunities are appropriate to your organization.

Every group must decide what it can and can't offer. Focus on what fits your own group's standards.

Ethical restrictions must be considered. Would it cause problems to publicly recognize certain donors? This is more often perceived as a problem with corporate donors, but must be considered for individuals as well.

Consider if any sources could raise an ethical dilemma for you. To start the wheels turning, here are some of the most common issues:

• Tobacco
• Alcohol
• Fast Food
• Gambling
• Drugs
• Investment in oppressed countries
• Pollution
• Pornography

Would it hurt the organization to be seen accepting a donation from someone whose income derives from one of these sources? How distant does a donor have to be before the money is acceptable? If a corporate donation is inappropriate, what about a personal one from the president of the company? From a major stockholder? From an elderly person who owns a few shares? From the janitor? From the government department that taxes the profits and then gives grants? Would it be acceptable to take the money quietly, but not if major public recognition was required?

Certain fundraising techniques raise similar problems. Is it appropriate for a food bank or a world hunger group to honour a major donor by throwing a lavish dinner? A nationalist group should obviously not give out mementos made in other countries.

Clearly, there are donations that are unacceptable on moral grounds. But some people can be heard to argue that they would take money from the devil himself if there were no strings attached.

Charges of elitism may also be heard in egalitarian organizations opposed to special privilege based on wealth. While this is a fair criticism of donor recognition, it can limit a group's ability to raise funds.

Remember that recognition is offered on the basis of generosity, not wealth. It may be true that it is easier for the rich to give more. However, it is often the ordinary person who actually does give more. You may show your appreciation to people for giving beyond their ability. Follow the example of some United Way agencies, which recognize corporate donors according to the size of the workforce or the annual income level. For example, they may give awards to the top corporate donors in groups, such as those having fewer than 100 employees; 100Ä250; 251Ä500; 501Ä1000; and more than 1000 employees.

It may also help to provide recognition to extraordinary volunteers who may not have much money to give, but are unusually generous in giving of themselves instead.

Groucho Marx is reported to have said, “I don't want to belong to any club that would accept me as a member.” Some organizations have their own version: “We wouldn't accept money from anybody who has enough to give us any.”⁸⁴

Henri Nouwen raises concerns about attitudes toward rich people:

We sometimes have a prejudice against the rich, which is not a good thing; that they are less good, they have more money than they deserve…
My experience is that rich people are also very poor in many other ways. Many rich people are very lonely; suffering a lot from feelings of rejection; of being used; depression. They all need a lot of attention and a lot of care, just like the poor, because they are as poor as the poor.
I want you to hear that, because so often I have come in touch with people who are totally in the prison of thinking “the only thing people see in me is money. Everywhere I go, I'm `the rich aunt' or `the rich friend' or `the rich woman'.” “I have these properties, etc. I stay in my own little circle because as soon as I get out, people are there and say `He's rich.'”⁸⁵

Ultimately, your organization must judge whether it serves its participants — and its donors — better by taking the attitude that money is tainted. Ask clearly: “Who suffers, if we decide not to take this donation?”

Action: Determine the value of recognition.

Now you should have winnowed your recognition opportunities down to the most exciting and most appropriate. How much must a prospect give to gain a specific level of recognition?

This can be resolved by examining the actual cost of providing the recognition, the relative value of other levels, and the market value in the eyes of the prospects.

Look at actual cost first. Obviously the cost of providing any type of recognition must be much less than the donor contributes. If nothing else, donors are sensitive to the fact that they gave you the money to achieve certain ends. In addition, Revenue Canada specifies that a registered charity must spend at least 80% of receipted donations on programs within one year. That limits spending on fundraising to a maximum of 20 cents for every dollar raised.

Revenue Canada also says that if the donor receives a benefit that has real market value (as opposed to a low-cost token of appreciation), the full amount of the donation is not eligible for a tax-credit receipt.

Keep Recognition Costs Low

Ideally, the cost of recognition should approach zero. Here are some suggestions to get you thinking about low-cost to no-cost recognition opportunities.

• A group that helps children can offer a donor a drawing by a child, perhaps done especially in the donor's honour.
• Performing arts groups offer free seats that would probably remain unsold anyway.
• An environmental group can plant trees that it was planning on planting anyway, but do so in the donor's name.
• The donor's name can be added to the annual report, a brochure or a newsletter, for only minor typesetting charges.
• Goods donated to the nonprofit, such as a framed poster, may be provided as recognition to another supporter (provided you have the consent of the person who donated the goods; otherwise, you risk offending her or him).
• Copies of a photo or poster can be signed by the cast of a performance, staff, participants, or an artist, making a one-of-a-kind souvenir.
• A celebrity can pose for a photo with the donor and autograph it.
• A behind-the-scenes tour may make the donor feel included in the inner circle, while giving the fundraiser a chance to point out the need for more support.
• A special donor lunch or reception can be donated by a restaurant, or by a corporation and held in the company's boardroom, or in the home of a friend.
• Local media may print or broadcast special tributes to donors as a public service.

Compare Relative Value and Market Value

Each recognition opportunity should stand in relation to others that your group offers. Does the recognition for a $250 gift feel like it is worth more than twice the recognition offered for a $100 donation? Would the added benefits induce a $200 prospect to give an extra $50 to reach the next level?

In addition, your recognition offers must stand in comparison to those offered by other organizations. This may seem excessively consumerist, but it accurately reflects the state of the nonprofit marketplace. Collect materials from other groups and compare them to yours.

Action: Link recognition opportunities to prospects who will respond best.

Not all prospects are equally interested in recognition, or in the same types of recognition. Some would prefer to remain anonymous. Some are delighted to receive private tribute, but prefer not to have it done in public. Others love being the centre of attention.

Recognition can be developed specially for a specific donor. If you are holding a recognition reception for a donor who prides herself on her knowledge of wine, then a wine-tasting may be appropriate. Someone else might prefer a beer-tasting party. A third person might be offended at the presence of any alcohol at all.

If you know a donor appreciates a particular artist, you might ask the artist to sign a print that you will present to the donor.

Prospect research will reveal valuable information about a prospect's interests.

Gift-Club Recognition Opportunities

Use the following chart to create your own unique list of recognition opportunities.

Prospect's name:

What kind of incentives or recognition might this donor want that we can offer? Why?

What evidence is there that the prospect would be interested in this?

For a group with few major donors, it may be best to start small — perhaps as low as the $100 level. For groups with many larger donations, gift clubs can go up to the level of hundreds of thousands or even millions of dollars.

Whether to advertise the rewards a donor can receive from gifts at different levels is a controversial question. While these may be listed in a general brochure, showing the whole list is not necessarily an advantage when approaching an individual donor. A full `shopping list' is too confusing. Instead, mention only the rewards offered for a gift at the level you hope this person will contribute. If you think you may have underestimated the gift, mention the rewards at the next level, too. Discuss other levels only if the donor asks.