Incentives Are Bad, But Promotional Products Are Not
Incentives are, indeed, bad for your nonprofit. And by that, I mean bad in every way–for fundraisers, for employees, for donors, for your outsourced janitorial staff, for your children’s reading efforts, for your board and more. You name it. Incentives are, indeed, bad for your nonprofit, but promotional products are not.
Per Otis, “People look at the behavior of others and infer beliefs and attitudes from their actions. There’s nothing surprising about that. What is surprising is that when a person’s own attitudes are weak or ambiguous, they similarly discern their own attitudes from the things they themselves say and do. And what this means is that managing attitudes is an important—and tricky—endeavor."
So how does this work for—and against—nonprofits? If I am given an incentive for something I do, I may conclude that my behavior was done in order to obtain the incentive, rather than because the nonprofit’s mission was something I believed in. In his book, “Why We Work,” Swarthmore University psychologist Barry Schwartz, documents the way attitudes change for the worse when incentives are introduced in all kinds of scenarios, including employment. He gives examples of the way employees are demotivated once they are given a financial incentive for performing desired behaviors at work. When an employer added a financial incentive to the equation, an employee's motivation for doing a good job for the satisfaction it provided changed to doing a good job only when an incentive was provided. If a financial incentive can make an employee less inclined to perform well because the employee thinks he or she is doing a good job only for the incentive, imagine what incentives can do to the attitude of a nonprofit constituent.
To nutshell it, if your constituent is working for the goodie, for the sake of the goodie, you have a problem.
But here is what is not bad for nonprofits—recognition. Recognition, instead of incentives, works to solidify and reinforce people's ideas of why they are doing whatever we are asking them to do.
Historically, nonprofit executives have used promotional products in what they call “incentive programs,” typically in the peer-to-peer space. The idea held by most of us, including myself during my first 10,000 hours of work, was that the person would work hard for the incentive. That’s what made it an incentive program. Now, we have a better understanding of what motivates people. If we want to reinforce a behavior and instill the attitude, “I want and like to do this,” then we can’t use a carrot like an incentive. In fact, we can’t use anything that might have enough value to suggest they are doing it for something external. They have to be in it for the satisfaction that they get from participating.
And that is exactly what makes promotional products perfect for recognition.
A promotional product, when carefully selected, does not jeopardize a person's view of why he or she is involved with a nonprofit, because it cannot be construed as payment in any form. The product provides what psychologists call “insufficient justification” for the volunteer's behavior. The product is instead a reinforcement of the person’s self-label—e.g., “I am a cancer evangelist. I do this work because it’s who I am.” Here are the best practices to make sure that a promotional product works as recognition instead of as an incentive:
- The value of the item is too low to be sufficient justification, in and of itself, for the behavior.
- The product reinforces the person’s self-label by being visible to the user and others over time.
- The recipient cannot assign a price to the product. The product can’t be available through other means, nor is the price published.
All forms of recognition work in this way. For example, giving a fundraiser a ski trip for raising $10,000 would raise the question—either consciously, or unconsciously—why had he or she raised $10,000? Was it for the trip, or the cause? That questioning undermines his or her self-label as being a supporter of the organization. On the other hand, being recognized with a shoutout from someone on stage at an event is immensely rewarding, but it is darned near impossible to deliver that experience with any consistency, nor measure its effectiveness.
And that, too, is exactly what makes promotional products perfect for recognition.
You can store promotional products easily and deliver them efficiently. You can measure who wants them and who doesn’t, and calculate an ROI for their use. You can create business intelligence through their uses that help you make decisions and create accurate revenue forecasts, which we do at Turnkey every day.
Promotional products are certainly only part of the recognition picture, but they are the most easily applied and measured part. That’s why most organizations usually start and stop using recognition with the use of promotional products. The delivery of the other recognition opportunities, like public acknowledgment, is really difficult to achieve with consistency and is difficult to measure. It’s tough to create a budget for phone calls and personal relationship management. That’s why we as an industry don’t invest more in that type of recognition. Instead, nonprofit self-labels across America are fed primarily by promotional products—the unexpected hero.
Katrina VanHuss is the CEO of Turnkey, a U.S.-based strategy and execution firm for nonprofit fundraising campaigns. Katrina has been instilling passion in volunteer fundraisers since 1989 when she founded the company. Turnkey’s clients include most of the top thirty U.S. peer-to-peer campaigns — Susan G. Komen, the Cystic Fibrosis Foundation, the ALS Association, the Leukemia & Lymphoma Society, as well as some international organizations, like UNICEF.
Otis Fulton is a psychologist who joined Turnkey in 2013 as its consumer behavior expert. He works with clients to apply psychological principles to fundraising. He is a much-sought-after copywriter for nonprofit messaging. He has written campaigns for St. Jude’s Children’s Research Hospital, The March of Dimes, the USO and dozens of other organizations.
Now as a married couple, Katrina and Otis almost never stop talking about fundraising, volunteerism, and human decision-making – much to the chagrin of most dinner companions.
Katrina and Otis present regularly at clients’ national conferences, as well as at BBCon, NonProfit Pro P2P, Peer to Peer Forum, and others. They write a weekly column for NonProfit PRO and are the co-authors of the 2017 book, "Dollar Dash: The Behavioral Economics of Peer-to-Peer Fundraising." They live in Richmond, Virginia, USA.