Should nonprofits offer thank-you gifts?

Nonprofits need to work to put together the thank-you gift puzzle.
Date Published
12/30/2013

It seems only natural that people want to be rewarded for performing an act of kindness. Of course, there will always be groups of altruistic individuals who spurn offers of repayment for doing good deeds. While this might seem like a question or issue more properly dealt with in a university course in ethics, it’s a concern that many nonprofit organizations need to confront to best serve their donors.

Challenging conventional wisdom
In fact, a recent study by Yale University investigated the influence of offering different kinds of thank-you gifts to donors after they’ve made a contribution to a charitable cause or nonprofit group. George Newman, assistant professor of organizational behavior, and recent Ph.D. graduate in psychology Jeremy Shen undertook the study to look at the way “external incentives influence a person’s willingness to engage in charitable behavior,” The Wall Street Journal reported. 

During this time of year, there are a number of organizations that offer gifts ranging in size and expense, such as coffee mugs, T-shirts and member cards that provide discounts at particular stores or institutions within a given community or metro area. These incentives are meant to show appreciation for donor gifts, but not everyone responds in the same way to this strategy. The prevailing wisdom is that the more appealing a thank-you gift is – because it fulfills a functional need or connects on an emotional level – the better participation will be during the fundraising campaign, or donors will be motivated to support at higher levels of giving.

Underscoring the need to understand donor preferences
In reality, the research demonstrated the opposite tends to be true in most cases. During an interview with The WSJ, Newman indicated the monetary level of donations dropped when a thank-you gift is offered during the first prompt for a contribution instead of simply asking how much an individual is ready to give.

The Chronicle of Philanthropy confirmed the idea that donors grew worried from an ethical perspective, wondering whether accepting a thank-you gift would complicate their internal reasons for giving. Instead of coming from a place of altruism, donors might be concerned their motivations will begin to evolve to a point where they expect a gift in return for donating to a cause. Professor Newman told The WSJ that every nonprofit group must be responsible for understanding how their donors respond to thank-you gifts.

Software for nonprofits can help enterprises keep records of donor preferences, track histories and integrate this information in organizational databases. With this data, nonprofits can cater their gift-giving program to their donors, as opposed to following a blanket strategy that might end up discouraging individuals from contributing.

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