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Study Says Donors Will Pay More to Become Charity Members

May 15, 2009, 12:24 am

If your organization uses memberships as a way to raise money and connect with donors, you may be interested in a recent study at the University of Maryland showing a curious connection between the cost of membership and the rate that people sign up.

To wit: people are willing to pay more to become members and, indeed, a higher priced membership level may even reflect better on the charity while also bringing in more money.

As reported on Real Time Economics, a Wall Street Journal blog, the researchers sent charity membership solicitations via e-mail to more than 700,000 people in one of three different ways. One group was told memberships started at a minimum donation of $25, another group was told the minimum donation was $35, and a third group was told memberships were being offered at a “special discount” rate of $25.

The results? The response rate was identical (0.23-percent) for the first and second group of solicitations, with those offered memberships at $25 or above giving $36.32 on average, and the those offered more expensive memberships averaging $45.21 per acceptance.

And the special discount group? Their response rate was better (0.27-percent) and the average donation was $37.94

“The basic explanation is that price is linked to perceived quality,” writes Sara Murray on the Wall Street Journal blog. “Charities that require a larger minimum donation seem to be higher quality than those requiring a small donation, and ‘thus membership has a higher value to the individual,’ according to the paper.”

What have been you experiences with membership pricing and solicitations?

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