Experts Suggest Ways to Match Premiums Effectively With Recipients

Some charities find one small gift — like a greeting card or bookmark — to include with their direct mail and hang on to it year after year. Others try to top the success they had with one “premium” by trying different tokens in their mailings. In either case, according to experts, the key to finding a premium that works is partly in the execution and partly in predicting potential donors’ tastes and ability to give.

Following are some suggestions for using premiums, offered by veteran fund raisers:

Tie the premium to the organization’s mission. The World Wildlife Fund offers in different mailings to send gifts such as calendars, T-shirts, umbrellas, or tote bags to people who make a donation. Each item has pictures of animals and the group’slogo.

“We think it increases awareness, although it’s not measurable,” says Sarah Parkinson, manager of member acquisition and retention programs.

Ms. Parkinson says she sees evidence that the premiums help spread the word about her charity when she walks down the street carrying a tote bag or umbrella adorned with the logo and people stop to ask where she got it — and what the World Wildlife Fund is.

Choose premiums that people will use up. For several years in a row, the American Society for the Prevention of Cruelty to Animals sent out greeting cards in the spring and holiday cards at year’s end.

Because so many people used the cards to mark the seasons, they were eager to get another batch — which meant the charity could send the same kind of premium to the same people time after time, says Melanie West, executive vice-president at Lautman & Company, a fund-raising consulting firm that designs the organization’s direct-mail packages. “You want a product that people will use up so they will want it again next year,” she says.

Use paper products. Disabled American Veterans in Cold Spring, Ky., has used address labels as premiums since the 1950s. Part of the reason for their continued success has been that the cost of paper products is so low.

“Our average contribution is $8 or $9, and the labels we’re using now cost about $90 a thousand,” says Max Hart, the director of direct mail at the veterans’ group. “So it’s about four or five times the return on our investment.”

Decide when to send the premium. Some fund raisers prefer “back-end premiums,” which are offered in exchange for a donation of a certain amount. They oppose so-called front-end premiums, which charities send out as part of their mass mailings. “With back-end premiums, the charity gets a commitment, and the donors get something nice that is a constant reminder of the charity,” says Charlotte Divoky, a fund-raising consultant who is president of Divoky and Associates in Boston.

Not everyone agrees. Disabled American Veterans tested back-end premiums such as wall charts and historic and patriotic books, but nothing beat the group’s popular front-end address-label premiums. “The cost was higher, but the net was the same,” says Mr. Hart.

Many organizations test both front-end and back-end premiums to see what works best for them — and some end up using both.

Make sure the premium is appropriate. Return-address stickers might be fine for some groups, says Kay Partney Lautman, president of Lautman & Company, a Washington fund-raising consulting company, but they might not work well for an organization with a dignified image such as the United States Holocaust Memorial Museum.

“Even if they would work, I wouldn’t suggest them,” she says.

More appropriate, she says, is a calendar the group offers with children’s drawings from the Holocaust.

Similarly, sending a trinket to a major donor could be insulting, say experts. But grassroots organizations should think twice before sending anything fancier than address stickers or paper bookmarks, says Mal Warwick, president of a Berkeley, Cal., fund-raising consulting firm that bears his name.

“For a grassroots organization that projects a poor-as-dirt image and is trying to get across just how far money goes in its hands, premiums might not be appropriate at all, unless they could say that the premiums were paid for by somebody else,” says Mr. Warwick.

Test the premium. No matter how much effort goes into finding just the right premium, there are no guarantees it will succeed. To save money, Paralyzed Veterans of America always tests new products — sending them to a limited number of people on its list and seeing how they do compared with tried-and-true mailings sent to all the other people on its mailing roster.

Several years ago, the charity asked Yankee Publishing to produce a special edition of its booklet Gardener’s Companion for the association’s donors. “We know our donors are avid gardeners,” says associate executive director Phyllis Freedman, “but that mailing didn’t work. Maybe our donors are really committed stationery people or maybe the book was mailed too late in the season.”

Whatever the reason, the organization did not end up wasting a lot of money because the test proved that the idea didn’t work.

Don’t send premiums too often. Disabled American Veterans sends four premium mailings a year and is testing a fifth, but is doing so with caution. “Some organizations send them out every month,” says Mr. Hart.

“But as you increase the frequency of mailings, you sometimes decrease the response rate,” he says. “Each organization has to determine its own economics.”

Whenever Mr. Hart’s organization increases the frequency of its mailings, it sends the extra one to just a small number of people and compares it against a control group for a full year to see if adding the mailing was worth it.