In the nonprofit world, when it comes to “memberships,” we seem to be of two minds. On the one hand are memberships that convey benefits in exchange for a fee, and on the other, those that recognize donors for gifts made.

Fee-Based Memberships

In fee-based memberships, a patron of The Metropolis Museum can “join” that institution and become a member by paying a fee of $25 or $50 and receive a monthly magazine, free admission, a discount at the museum shop, special event invitations, etc. To my way of thinking, this type of membership is actually an earned income opportunity and is better left to the museum’s marketing department. Those fee-paying members have more in common with a performing arts organization’s season ticket holders than its donors, and their real value to a development effort lies in their potential to contribute to fund-raising campaigns, rather than the fee they pay for their membership.

Philanthropy-Driven Memberships

Recognition-based membership programs are tools used to convert prospects into donors and to increase the size of gift. They are one of the most useful tools fund-raisers have. Donors giving at a certain level to the annual fund become Friends of the organization. If they give at increasingly higher levels they have the opportunity to be recognized as Contributing Friend, Supporting Friend, or Sustaining Friend. Then there are those who give more that one could ever expect from a friend and enter the rarefied air of Benefactor or even Founder. Perhaps they become members of the President’s Circle.

What matters is the concept, not the name. The idea is to tastefully and properly recognize donors for their generosity. Their names should always be printed in the annual report under their respective membership categories. For the highest levels of donors, a wall in the lobby of an organization’s facility can be reserved for all to see who is a Benefactor or Founder.

The personal value received by these members is recognition and association, but there is no reason to be shy about providing “perks” appropriate to their level of contribution. For arts and cultural organizations those awards obviously can be benefits similar to what are “sold” through the marketing-effort type of membership program cited above. However, social service, education, healthcare, or community development organizations are not without the opportunity to offer tangible manifestations of appreciation of their own. Invitations to dinners and receptions at trustees’ homes or clubs can be enticing benefits for donations of say, $500 or more. Another possible show of appreciation might be to have a corporation sponsor a membership program and host a luncheon honoring selected major donors and key volunteers.

In my experience, the best “gift” you can give to annual fund donors is to let them know that their gift to the organization has made it possible to do specific and meaningful things for the community, such as: six months of a scoutmaster’s service to inner-city children, a week of computer training for a welfare mother to help prepare her for employment, an education outreach program enriching the lives of 100 students, etc.

Recognition membership programs are of great value to a development effort because they ease the process of asking for money by giving both the donor and solicitor a hook on which to hang their hats. If a member of the Benefactors Circle gives $1,000 each year and prospects can see that their close colleagues or neighbors are, for the most part Benefactors, then that is a persuasive argument for giving $1,000 rather than $500. Such a membership program allows us to individually tailor giving suggestions while at the same time providing subtle peer group association pressure and offering a little something extra for that larger gift. Do not underestimate how useful that is to a volunteer solicitor who is in position to say:

“I am asking that you please consider making an increased gift this year to our annual fund in the amount of $1,000 and join the other generous members of our Benefactors Circle. You may know some of our Benefactors—here, let me show you a list of them… and we would be delighted to add your name to this impressive roster. Along with our sincere appreciation for your thoughtful gift and the knowledge that it will help meet the needs of the community, we would be delighted to be able to extend to you the benefits of membership in the Benefactors Circle—allow me to tell you what they are…”

One of the most important things this does is to allow the conversation to continue after the suggested gift has been stated without focusing exclusively on the dollar amount being sought. The privileges of membership become a secondary enticement for making a very specific contribution. Which is of course the position they should occupy—secondary. We must never think of a gift solicitation as a quid pro quo transaction. We must never lose sight of what philanthropy really is.

Philanthropy occurs when the donor and the fund-raiser share a keen sense of what is right—a sense that something good has taken place—not simply a tax deduction obtained, an invitation to dinner acquired, or a step taken up the social ladder. Philanthropy occurs when donors feel that the decision to give is justified by the merits of the project and in return they expect nothing more—and certainly nothing less—than that the organization will use their gift as promised and will use it well. Donors are well aware that the money you spend to provide material recognition, is the money they gave you in the first place. And remember, no response to a gift is more meaningful and more appreciated than a simple, sincere, thank-you.

Named Gift Opportunities:

Endowment and Capital Campaigns

Recognition membership programs, such as the ones we have been describing in relationship to annual funds, have their counterpart in capital and endowment campaigns. Named gift opportunities are offered as symbolic or commemorative gestures of appreciation for gifts of a predetermined size. It requires a certain amount to acquire a certain naming right, but the contribution need not literally offset the expense associated with what is to be named. In a capital campaign, naming rights to a classroom would not necessarily be the exact construction’s cost. Naming rights for endowing a chair in a university do not need to be exchanged for an endowment that would actually produce the exact income to cover the expense each year.

Do not pass up opportunities out of fear of “selling” naming rights for too little. Remember, they are symbolic and commemorative. You set the “price” based on the needs of the campaign and the rated giving potential of your major prospects, or “what the traffic will bear.” In a bricks-and-mortar campaign, when a potential donor is considering making a gift that is far and away the largest donation to the campaign, and when that gift is truly a substantial portion—probably more than half—of the total construction expense, then offering that donor naming rights for the entire building may be appropriate and persuasive.

General endowment campaigns often seek donations to provide income in perpetuity for unspecified operating support. However, commemorative naming opportunities can still be offered. There is no reason why the Joseph and Jane Smith endowment gift can’t be hailed in the annual report or celebrated on the wall of a building. Other, more specific, endowment campaigns abound in naming opportunities. Faculty chairs, artistic positions, medical departments, etc., are all opportunities for ongoing recognition of donors. The gift is made for the good of the organization, but a donor, nonetheless, appreciates the perpetual recognition provided by a naming opportunity.

Donors of smaller amounts to capital and endowment campaigns also can be provided with appropriate visible appreciation. There is no reason that givers to a capital campaign cannot be recognized in post-campaign publications, in the lobby of a new building, or at the grand opening celebration.

Named Gift Opportunities:

Sponsorships and Underwriting

As with capital and endowment campaigns, sponsorships offer naming opportunities—the ABC Corporation Lecture Series or the XYZ, Inc. Neighborhood Improvement Program, for example. Sponsorship opportunities often grow out of an organization’s budgeting process. Programs and services which are able to be identified as having their own cost can be lifted from the expense budget, “packaged” for sponsorship, and presented to potential donors.

The Name IS The Game

Memberships, naming opportunities and sponsorships are all points on the continuum of recognition and appreciation. They are tools all fund-raisers should be using to maximize support. A good recognition membership program can energize an annual fund appeal grown tired over the years. No capital or endowment campaign should ever be undertaken without a detailed naming opportunities plan. Sponsorships can turn a small annual corporate contribution into substantial underwriting of a well packaged program. When it comes to fund-raising, often the name IS the game.

Note: Additional Resources relative to annual fund memberships are available:

Those are my views on the subject. What are yours? I welcome your comments and suggestions.