Tim is mystified. His nonprofit has over 1,000 members, but despite massive efforts, only a handful of them ever make a donation on top of their basic membership fee. When he looks at the membership benefit list, he sees a big dangling carrot. The nonprofit offers so much value that no sane person refuses it, even if they care little about the cause that the nonprofit represents.
Is it OK to offer a membership package that has significant tangible value? Yes, if the goal of your membership program is to maximize your income now, and the number of your supporters. No, if the intention of your membership program is to create a donor nursery.
To serve your nonprofit well, you need a membership plan with two clear objectives. The first is straightforward: to provide the nonprofit with income. The second is more complex. It depends on your organization’s overall income strategy.* The second objective ties into this extremely important question, “How shall this organization be funded?” One way to gain clarity on your membership objective is to answer this question: “What do you want people to do after they join?”
Of course, you have choices both with income strategies and membership. The focus of this article is on membership and money. Memberships can provide two different income sources: mission income or individual donations. This article helps you to gain clarity about your membership objectives. (For even more help, answer the questions below.)
Memberships that provides mission income is about creating a community of people active and engaged in experiencing your mission. This type of membership appeals to nonprofits with hands-on causes, where more support leads to getting more done, and more political clout. Crowds of supporters provide income and muscle. A membership income plan built around mission income offers incentives like members-only field trips, discounts on opening nights, and other just-for-members events. With pricier membership, it offers concierge-like services and similar amenities. With this approach, members are still encouraged to donate. However, the primary focus is on getting a LOT of people to join and be involved. You want to convert strangers into members. On KED’s Membership Motivation Continuum, you use all of the motivations internal and external to gather members and their fees.
When your membership objective is mission income after they join you want people to renew, participate even more, and invite their friends.
In contrast, a membership plan that seeks donors is very different. With this plan, your goal is to find and invite “True Hearts” and “Actualizes Me” on Karen’s Membership Motivation chart, or the left-hand intrinsic motivation side. That is, you appeal to people who join because they want to support your mission and who have their own intrinsic motivations to do so. You seek people who want to support your mission. Their membership is in essence a donation—with benefits.
With this objective, the nonprofit designs membership benefits primarily to entice newcomers to choose you’re nonprofit over similar entities. That is, if your nonprofit offers botanical gardens, you offer opportunities to enjoy your gardens and continue to learn about them. (The member at this point might just as easily choose another garden.) Benefits serve as an enticement to take action and get in the game. Once people are members, you share how their membership fees make a difference, are a sign of their giving back to the community, and the key motivators that researchers tell us to inspire individual donations. When the objective of membership is to support individual giving, you seek members with a passion and connection, so you can continue and grow your relationship with them.
If your membership objective is individual donations after they join you want people to renew at a higher level and, eventually, consider a planned gift.
On the surface, these two approaches have a lot of similarities. The differences are your objective, your audience, and what you want to achieve, besides income.
The fundamental question a person asks when buying a membership is: What do I get for this? The fundamental question a nonprofit needs to ask is: Where does membership fit into our income strategy? It matters because by deciding your objective and creating a consistent plan to achieve it, your nonprofit drives instead of the members—(When members drive they naturally push for more and more benefits). It matters because the decision has implications for developing tactics and plans to further your income development goals. Membership is a tool to be used amongst other tools. Too many nonprofits lose out on an opportunity to obtain membership’s full value by looking at it as a stand-alone event, not a process that leads somewhere to move your nonprofit forward.
* After completing this article, I interviewed an executive director who experienced tremendous success by creating two entirely separate strategies one for donors and one for members. Success came from telling two different stories and meeting the needs of two different groups. The separation created more than a 25 percent increase in individual donations. I include more information about the nonprofit in my book, 7 Nonprofit Income Streams: Open the Floodgate to Sustainability.
Question to Ask
1. What benefits do you offer?
2. Why do most people join now?
2. What is your nonprofit’s income strategy? How does membership fit into it?
3. Is your current messaging consistent with your objective?
4. How much do you drive your membership program? How much do members drive it?
For more answers, check out this Nonprofit CEO Library.
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