This one might have crossed your mind: "What if we lower the minimum cost of membership?" M+R and two economists from the University of Maryland partnered with a major nonprofit to run a test. In an email appeal to first-time and deeply lapsed donors, we reduced the minimum membership amount from $35 to $25.
What did we find out? Framing is everything.
Simply reducing the membership amount to $25 produced no increase in response rates.
But reducing the membership to $25 and telling donors it was a special discount raised just a hair more overall, and from many more donors. This tactic reduced average gifts, but increased response rates, securing first-time gifts from more people.
Discounts are a fundraising tool employed by many nonprofits (including M+R clients). More and more, they are being used in combination with membership offers.
Want to try this at home? If you're going to lower your membership, be sure to tell your supporters they're getting a bargain!
We found something else interesting when we broke the results down by past behavior. The discount language increased returns among supporters who had EITHER donated in the past OR taken action, but not among those who had done both (i.e., donor-activists).
Therefore, to maximize revenue, consider suppressing donor-activists from the discount offer and giving them the regular membership ask instead.
And if you're still not fundraising from your activist file, chew on this - past activists were 3.6 times more likely to become members than those who had never taken action. (That doesn't show causation, but it confirms that activist lists are fertile ground for appeals.)
Here are a few top-line takeaways:
- If you're offering a discount, say it's a discount.
- When it comes to past donor-activists, run a test before you decide to offer them a discount membership.
- Fundraise from your activist-only list.
- Experiment! Just because you've asked for $20 from new donors for the past decade doesn't mean it's still the best amount to ask for today.
To download the full study, Charitable Memberships, Volunteering, and Discounts: Evidence from a Large-Scale Online Field Experiment, by Andreas Lange and Andrew Stocking, visit http://www.nber.org/papers/w14941.
ABOUT M+R STRATEGIC SERVICES
M+R is dedicated to helping our clients advance their missions in order to bring about positive change. We do this by helping organizations and campaigns we believe in develop smart and effective strategies, hone their messages, mobilize their members, build grassroots support, raise money, and communicate effectively with the media, the public and decision-makers, both online and offline.