Is a premium a bribe for a donation?  Now that I have your attention, let’s take a look at this controversial subject.  I am not going to dictate your philosophy in this area, but I will show you how to use premiums effectively, AND without taking away from your overall support.

By way of definition, a premium is an item you give to a donor in exchange for a donation or as a way of saying thank you for that donation.

The question of whether or not you should use premiums does not deserve a blanket "yes" or "no" answer.  I believe in premiums... in some cases.  I do not think that a ministry should use premiums all the time, but I do not think a ministry should rule out premiums altogether.  This whole topic is deep and will take some thought on your part, case by case.

Some positive facts about premiums:

1. Premiums can enhance your overall development program and increase overall giving.
   
   
2. Premiums are effective in raising special gifts.
   
   
3. Premiums usually increase the response rate.
   
   
4. Premiums help secure the first-time gift.
   
   
5. When giving is slumping, premiums can bring it back to life because prospects will take notice of your appeals.
   
   
6. Premiums will inicrease your rate of name acquisition (even if you are only offering a newsletter.)
   
   
7. Offering premiums is a way of putting ministry tools in the hands of your donors.
   
   
8. Premiums give your appeal a better chance of inspiring a response in the midst of the many other appeals your donors receive.
   
   
9. Some of the best premiums are ones which have an unknown or no specific dollar value.

On the down side...

1. Premiums have the potential of "commercializing" your donor development.
   
   
2. Premiums have the danger of conditioning people to give only if they are offered a premium.
   
   
3. Premiums cost you money, so you have to pay out expenses on every donation that is given, (although the increase in response and average size of gift can make it very worthwhile.)
   
   
4. If you choose the wrong premium, your response rate can be even lower than if you offered no premium at all.
   
   
5. Premiums can put people in the mindset of "buying" rather than "giving," and since your ministry is not in the business of selling products, the actual giving can slow dangerously.

From The Complete System for Ministry Fundraising & Development, by Jon Fugler and Ron Johnston.
The System includes a complete discussion of how to be effective when using premiums.