Discounting Charitable Gifts
"A survey last fall by American Express Publishing and Harrison Group found that 99% of wealthy consumers shop online, expecting goods to be discounted at least 30% from store prices." — Wall Street Journal, May 1, 2008
Twice in the last year my employer (and alma mater) has run a marketing campaign in which an anonymous donor promises $100,000 for each 1,000 gifts made during the challenge period. The goal is to drive participation by making each new gift, regardless of its value, worth an extra $100. The additional challenge money goes to financial aid, partly because it's an area of need, but also because it's broadly appealing to our constituency; an easy sell.
Challenges are a well-worn tactic of nonprofit fundraising: think public radio. They work because they lift gift value, but also because they create urgency. For us, the strategy works reasonably well. We usually see a few thousand donors fulfilling their pledges during these periods, many giving as little as $1, knowing their gift will amount to much more—up to 100 times more—when the challenge money comes in. But it's also not unusual for major annual fund donors, those who usually give in excess of $2,500, to fulfill their pledges during these campaigns, too. This is probably because we hit all non-donors hard with direct postal and email over a few weeks, and if you market, they will give. But we've always assumed the "extra $100" selling point probably doesn't carry much weight with these major donors.
But the above stat in the Wall Street Journal made me realize even the major donor might view such challenges as essentially a "discount" or "sale" on their charitable gift, because even a $2,500 gift yields a 4% premium if given during the challenge period. The donor doesn't realize a tax advantage of that additional money, but knowing it exists may make the donor feel like the "system" is giving them a better deal for the money.
This makes me wonder whether we could even more consciously leverage other mass-market phenomena like discounting, promotions, time-limited offers, and outlet sales without cheapening the enterprise. We're selling the undergraduate experience, essentially, but that's a pretty broad, generic product, even for an institution that has a strong reputation for excellence. What more specific products would connect with donors? And how can our product/marketing mix get more specific and targeted?