Why Promotional Products Might Be Your Nonprofit's Secret Weapon

Is your nonprofit using promotional products? If your answer is "no" or "what's a promotional product?" then it might be time for a quick lesson in one of marketing's secret weapons.

Also known as "giveaways," "swag," "premiums," "incentives" and a host of other names, promotional products are essentially any merchandise—T-shirts, mugs, pens, tote bags, phone cases, etc.—given away or sold by an organization. Most often, they prominently feature an organization's branding.

Chances are, you're already familiar with these items. According to Promotional Products Association International (PPAI), the education and nonprofit sectors as two of the top three promotional-products buyers—and for good reason. "Tangible, long-lasting and cost effective, promotional products create community, generate awareness through education and advocacy, activate volunteers and raise millions in funding,” said Paul Bellantone, CAE, PPAI president and CEO. “Cause-marketing experts, in partnership with promotional products professionals, have developed some of the world’s most renowned and high-performing campaigns, including Livestrong, Susan G. Komen and American Heart Association's 'Go Red For Women,' to name a few. These beneficial branding and awareness programs create community, fund critical research and help save lives.”

The stats bear this out, especially for awareness. A recent study by Advertising Specialty Institute (ASI) found that 85 percent of promotional-product recipients remember the name of the advertiser that provided the item, and that consumers prefer promotional products over all other forms of advertising—including Internet, mobile and television ads. It also found that 52 percent of recipients had a more-favorable opinion of the advertiser after receiving an item.

Then there's cost. DRTV is a powerful marketing medium for nonprofits, but it's not always an option for smaller organizations. According to the same ASI study above, the cost per impression of a prime-time television ad is 2.5 cents per dollar. The cost per impression for promotional products is 0.7 cents per dollar—less than a third of the cost for DRTV and less expensive than all other advertising mediums.

"In an increasingly digital world, the impact of analog marketing pieces is even more pronounced," said Kyle A. Richardson, editorial director for Promo Marketing, a publication that covers the promotional products industry. "Users actively avoid electronic ads while keeping bank pens on their desks. It's easy to change a channel during a commercial, but a T-shirt worn in public has a physical presence that cannot be ignored."

They're also versatile. Peer-to-peer programs often recognize race participants with T-shirts—which, if done correctly, has long-lasting and powerful implications. Many charities include promotional items in mailings, adding heft to mail-pieces and boosting response rates. (Wounded Warrior Project's "challenge coin" renewal mailing, a recent Gold Award winner, increased response rates by 46 percent and netted 48 percent more revenue than the control.)

But promotional products aren't limited to recognition, mailings and giveaways. A 2010 study found that 41 percent of U.S. consumers bought a product because it was "associated with a cause or issue," making branded-gear sales a viable revenue stream for nonprofits. Amnesty International, for example, has a robust online store that offers apparel, accessories and a host of other branded items, with proceeds going toward the organization's mission. "Every dollar counts when you shop with us," reads the store's "About Us" page. "Every purchase you make and every item you wear or use supports our work and raises awareness for human rights."

This approach is especially effective in the education and arts sectors, which often rely heavily on merchandise sales to supplement other fundraising methods. Just about every major university or museum has an online store and various brick-and-mortar gift shops full of branded gear. The Smithsonian Institution has invested heavily in this model, with an umbrella of online stores backed by standalone retail spaces and onsite gift shops. The organization also has a licensing division, which generates additional revenue. But the benefits are more than just monetary.

“Merchandising also allows us to communicate with people at a deeper level, sometimes,” Carol LeBlanc, senior vice president of consumer and education products at the Smithsonian Institution, told us for a merchandising story last year. “People may see something at the museum, and our products allow us to add more educational details and highlight things that can’t be on display. Merchandising allows you to extend your reach in a way that is not possible through just a museum."