In this episode of The First Day from The Fund Raising School, host Bill Stanczykiewicz, Ed.D., welcomes Dr. George Newman, Associate Professor of Management and Marketing at the University of Toronto, to explore one of the most deceptively simple questions in fundraising: Should we give donors gifts? Backed by years of research and a background in psychology, Dr. Newman offers a compelling and somewhat counterintuitive answer, those tote bags and coffee mugs might actually be hurting more than helping.

Drawing from a series of six studies, Dr. Newman and his colleagues found that offering thank-you gifts in advance of a charitable contribution often results in lower donations. Why? Because it shifts the donor’s mindset. Rather than giving out of altruism, they begin to interpret their action as transactional. This subtle psychological shift, known as motivation crowding, can reduce both the likelihood and amount of giving. “It raises a question that’s not there when people are simply asked to give,” Newman explains.

But all gifts are not created equal. Dr. Newman emphasizes that the timing and framing of a gift matters. When gifts are unexpected, given after the donation, they don’t seem to trigger the same psychological conflict. And when the gift is tied to the organization’s mission, such as a product made by program participants, the donor sees the item not as a perk but as a meaningful expression of the cause. Even simply reframing a thank-you gift as a tool to spread awareness can reverse the negative effect.

The episode closes with practical advice for fundraisers navigating the delicate dance of donor appreciation. Dr. Newman encourages organizations to focus on understanding how donors perceive incentives, and to consider what a gift might unintentionally communicate about the nonprofit's values or efficiency. “It’s not that all gifts are bad,” he says, “but how, when, and why they’re given can make all the difference.” Bottom line: the best gifts support the story, not distract from it.