Membership programs can be misused, but by and large, they are extremely valuable tools for fundraisers—and they’re good for donors, too.
I’d forgive you for missing it—amidst the Olympics, the Delta variant, and the Phillies being playoff contenders—but the Veritus Group is on a rather odd crusade against membership programs (which in their definition encompasses giving societies, annual funds, and other membership programs “of any kind”).
Now, I should preface this by saying that the folks at Veritus, a consultancy specializing in mid-level, major, and planned giving, are a valuable resource, and the article discussed herein is not altogether off-base. Your humble scribe is generally pro-Veritus.
DON'T LOSE THE BABY
Nevertheless, their current anti-membership-program fixation is largely misguided. Without putting too fine a point on it, I find it strange that a passionately pro-data outfit like Veritus relies almost entirely on anecdote and armchair psychology to make its case. This dearth of hard data is made more glaring when one considers that the majority of nonprofits have some kind of membership program or giving society. (Not to mention, there is ample data to suggest that membership programs do in fact boost giving.) The burden of proof is on Veritus to explain why all those nonprofits are wrong.
Most nonprofits use membership programs as a tool—one component of a multifaceted development program. What Veritus critiques is a relative straw man: using a membership program in place of a multifaceted development program. Perhaps there are organizations that do this—perfecting the design of every membership program collateral piece while neglecting even basic cultivation of their donors. But the existence of such practices should not call into question the efficacy of membership programs generally; on the contrary, it points to their proper use.
In short, Veritus tosses the baby out with the bathwater.
USING MEMBERSHIP WELL
I want to suggest a few ways that membership programs serve as useful tools for both donation solicitation and donation acknowledgment.
Before proceeding further, it bears noting that membership programs are a tool primarily for mid-level and lower-level major donors. These are donors who give generously to your organization but may not be able to, say, underwrite a new program with a stroke of the pen. For these cohorts, a membership program can provide concrete and achievable upgrade goals, along with a tangible way for them to feel involved with your organization’s mission.
Top-tier donors can often recognize their transformative impact, or feel their connection to the organization, though their giving when they directly enable a particular program or meet a specific but significant need. On the other hand, your more modest—but still very generous—donors need other mechanisms to understand their impact on the organization’s mission and feel their connection to that mission. Enter the membership program.
Veritus champions “compelling donor offer[s] that [match a donor’s] passions and interests.” That’s great—but such offers are not mutually exclusive with a membership program! I can present you with a compelling donor offer that matches your passions and interests while also making you a member of our Founder’s Circle, that, say, “recognizes our most generous and loyal supporters by…” and so on. They’re correct, of course, that we shouldn’t treat our donors as “locked in” at certain levels—but again: misuse of a tool does not mean the tool is useless. (Remember that baby in the bathwater?)
Moreover, I would contend that for mid-level donors in particular, a membership program does a better job conveying how their donation connects them to the organization and its mission. Of course, some organizations can make this connection with some simple calculations: “give $1.92 to provide a meal to a homeless guest.” For many others, though, it’s not quite that direct. I’m not sure how compelling it is to tell a donor that by giving an extra $250 this year, they can fund 2.8% of some existing program rather than the 2.6% they funded last year. The increased impact is minimal and the connection is thin.
Again: some donors can upgrade past their giving club level, and the onus is on the fundraiser to identify those donors—but not everyone can do that! Don’t we want those donors to feel engaged with, valued at, and valuable to an organization?
MOTIVATING WITH GRATITUDE AND COMMUNITY
Membership programs are often a superior motivator for two reasons. First, by offering membership benefits at certain giving levels, an organization conveys just how critical donations at a particular level are. Membership programs don’t motivate donors because they promise certain benefits—a book, a pin, a mug, and so on. No, they motivate donors through what those benefits convey about the importance of gifts at that level to the organization. The benefits that donors receive complement an explanation of the impact of their gift: “Your donation of $5,000 will accomplish XYZ. To demonstrate how critical that is, we thank our $5,000 donors by recognizing them as members of the Such-and-Such Society.”
Second, unlike a donor offer presented in isolation, membership programs underscore that the donor is part of a rich community of like-minded people joining together to support an organization that they love. Why does a donor give $100 or $500 or even $1,000 to an organization? It’s not that they naively believe that their donation on its own will change the entire trajectory of the organization they love or that the subtraction of their giving would be extremely detrimental. Rather, it’s that the act of giving expresses identification with a particular cause and a desire to join together with others in supporting it.
RELATIONAL FUNDRAISING: IMPORTANT, NOT EXCLUSIVE
One final point on building relationships with your donors. I bristle when fundraisers casually note that “fundraising should be relational, not transactional.” The sentiment is undoubtedly true, but the articulation is overwrought. “Not transactional” is unnecessary and potentially misleading.
If you develop genuine relationships with your donors, your fundraising efforts by definitely will not be (merely) transactional. At the same time, many things that get pejoratively categorized as “transactional” in fact incentivize donors to give more. For example, highlighting a more tax-efficient way for a donor to give is transactional (that is, it doesn’t relate to the mission, per se, and it serves the interest of the donor), but not at the expense of the organization or the relationship. This conversation or messaging enables a donor to give more, strengthening the relationship and benefitting the organization.
In the same way, a membership program can incentivize a donor to give more, but they give in the first place because they care about the organization. “Relational versus transactional,” in other words, is a false dichotomy. If a membership benefit is the sole motivator for gifts of a particular level, chances are that your organization isn’t thriving. At that point, it’s not really a membership benefit at all—it’s just a purchase. This is why membership benefits are always “cheap” compared to the value of the actual donation: $50 for a tote bag, $100 for a mug, $250 for a signed book … and so on. The benefit is just that: a benefit, an added bonus for making a gift—not the motivating factor for the gift.
TOSS THE DIRTY WATER
If you’re misusing membership programs, failing to identify and upgrade donors with more capacity and interest, then you should improve your habits and stop treating the giving levels as a sacred cow. That’s some dirty bathwater well worth tossing out.
But membership programs are a great tool. They offer achievable giving goals to small and mid-level donors while formalizing a robust donation acknowledgment process and underscoring the community of supporters to which the donor belongs. Executed well, they complement rather than replace the other facets of a development program, including the cultivation of genuine donor relationships and the consistent demonstration of donor impact.
The building blocks of a successful development program aren’t complicated, and they’ve stood the test of time. Are they in perpetual need of refinement? Sure. Do they need to be tailored to your particular organization? Of course. But be wary of any argument that one of these building blocks is useless or, worse, detrimental.