If you don’t read this right now, you’ll miss out!
After reading that headline, did you feel a sense of urgency?
Sorry to trick you but I wanted you to see what it felt like when scarcity is employed in marketing.
Perceived scarcity generates demand because we are hardwired to be loss averse. In other words, we always want what we can’t have and we are motivated by the possibility that we might lose out. That’s why advertisers put expiration dates on coupons and use words and phrases like “limited time,” “exclusive,” “last chance” and “now or never.”
Engagement fundraisers remember to include the Pareto Principle in the formulation of their strategies and tactics. In other words, they aim their scarcity approaches at premium prospects and supporters (major and legacy gift prospects) while providing them with value, exclusivity, and urgency.
Here’s an example of how it can work for you:
If you survey your supporters and include a demographic question to learn their ages and whether or not they might consider giving from their IRAs (Individual Retirement Accounts), then you could offer those over 70 1/2 information about how they can use a portion of their IRA Required Minimum Distribution to make a gift. But you’ll want to emphasize that they’ll need to take action before the deadline imposed by the IRS or they’ll miss out. If they heed your warning they won’t pay income taxes on the amount they give.
Note that a single gift from a married couple, as a result, could be as high as $200,000 ($100,000 from an unmarried single). Plus those supporters could donate again from their Required Minimum Distribution each year. Some of your supporters don’t need the income from their IRAs. Yet, once they turn 70 ½ years old, they must take the required minimum distribution. Then they’ll have to claim it as income, which means they’ll pay tax on it.
Urgency is the key here.
Providing information that helps them avoid paying taxes and makes them feel good by donating the required minimum distribution will provide them with tremendous value.
Amazingly, after they give $200,000, they’ll thank you for helping them get it done before the deadline!
The Pareto Principle strikes again.
How many events or galas would you have to run to equal that amount? How many junk mailers would you need to send aimed at low-dollar donors to equal that amount (and how much paper would need to be used in the process)?
Engagement fundraisers think about their efforts this way. Do you?