Q. What is a premium?
A. In direct mail fundraising letters, a premium is an item offered to a donor, usually at no charge, to encourage the donor to make a donation.

Q. What's the difference between front-end and back-end premiums?
A. Premiums that are included in the mail package are called front-end premiums. Premiums that the donor must request are called back-end premiums.

Q. What are some examples of front-end premiums?
A. Labels, note pads, greeting cards, calendars and decals.

Q. What are some examples of back-end premiums?
A. Books, DVDs, tote bags.

Q. Which kind of premium is the most popular among mailers?
A. Front-end premium.

Q. Why do non-profit organizations mail premiums?
A. To boost response rates.

Q. What are some advantages of premiums?
A. Premiums tend to attract more gifts when mailed to current donors, and attract more first-time donors when mailed to prospective donors. Also, because of their bulk, they tend to encourage more people to open, rather than pitch, fundraising letter envelopes.

Q. What are some disadvantages of premiums?
A. Premiums tend to attract gifts that are smaller than those generated by packages that contain no premium, and they attract donors who are less likely to give again. Some donors who are acquired with premiums can only be renewed with premiums. Premiums also attract gifts from donors who are motivated by guilt or obligation rather than by philanthropy.

Q. How do I know if premiums are right for my organization?
A. Test and find out.

Q. What kind of premium should I offer?
A. The most important factor in choosing a premium is that it complements your mission. Greenpeace offers a cotton tote bag that is an environmentally friendly alternative to plastic shopping bags. The Billy Graham Evangelistic Association offers books written by Billy Graham. Avoid premiums that appear to be nothing more than subtle bribes.

© 2006 Sharpe Copy Inc. You may reprint this article online and in print provided the links remain live and the content remains unaltered (including the "About the Author" message).


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ABOUT THE AUTHOR
Alan Sharpe is a professional fundraising letter writer, instructor, coach, author and newsletter publisher who helps non-profit organizations to raise funds, build relationships and retain loyal donors using cost-effective, compelling, creative fundraising letters. Sign up for free weekly tips like this at http://www.RaiserSharpe.com