Best Practices In Challenge Gift Drives, Part II

June 13, 2018 | Laurence A. Pagnoni

This is the second part of a three part series on Challenge Gift Drives. To read part one, click here.

Best Practices In Challenge Gift Drives

There have been cases where those who gave under a challenge drive later reduced their subsequent contributions, resulting in a net reduction of total contributions to the agency’s overall giving. Some call this effect “donor fatigue”, though I’m not a fan of that term because people are too complex for such easy categorization. Thus, in addressing this issue—by any name—it’s important for you to be proactive and let your donors know up front that maintaining their regular support is essential. Let them know, “We don’t want to fix one problem (meeting the challenge) by creating another (losing your funding for our regular, ongoing work).”

A fundraiser I spoke with about this problem told me that one of her donors concluded that, with the advent of a large challenge gift, his small gift would no longer be needed. She became worried that others might get the same impression, so she quickly issued a donor survey to gauge how her other donors were thinking. Thankfully she learned that only one other donor had a similar attitude about small gifts. The lesson here is that it pays to verify attitudes within your donor base rather than assume them.

Here are some other best practices to apply to your challenge drives:

  1. Big goals get big gifts. Increasing the target fundraising goal in a challenge drive has a significant effect on the size of the average gift.
  2. Customize your appeal letter and the amounts you request. Although customization of donor appeals is time-consuming and possibly costly in the short run, there are clear rewards to understanding the mindset of each donor in order to send the most personal and effective appeal. Customization can usually be done through a mail-merge process. While it’s not necessary to create a different letter for each individual, you may want to do so for your top givers.
  3. Offer money-back guarantees. In your drive, state that if the minimum challenge is not met by a certain date, your donor’s contributions will be returned to them. Your appeal could read: “By May 1, we must raise an additional $10,000 to match the donor’s $10,000 challenge; if we fail to raise that full amount from you, our supporters, we will not be able to open the new environmental justice program for our teens, but we will refund your donation promptly. Please help us achieve our goal.”
  4. Create an air of exclusivity. Let the donor know how many people you are approaching. “You’re one of thirty-five people we’re personally approaching for support.” Donors often think that you have thousands and thousands of others to turn to. It’s important that you define the context of their engagement in real numbers. It conveys the importance of their unique participation.
  5. Create mailers your donors will open. If you are using the mail, the battle is often getting the recipient to open the envelope. Consider posing a question on the bottom left of the envelope exterior, such as: “Do you know what our kids want the most?” Or use a sentence-handle such as: “The most important thing we can do right now to preserve our environment is…” I often suggest using large colorful envelopes that draw attention to themselves in the mail stack, or eliminating the envelope altogether and using a large postcard, or folding the mailing in half and wafer-sealing it. Be sure to check with the post office first so that your design meets postal regulations. I also recommend using fonts like Courier New 12 point, which is easy to read, clean, and looks very personal. Mail your challenge gift requests two or three times—at the start of the drive, midway through, and near the end—and be sure each time not to mail to those who’ve already responded. Too many non-profits only mail once—a common and avoidable mistake.
  6. Learn about your area. Fundraisers have found that the location of a drive often affects its efficacy. Some areas are simply better than others. If you are going to try the challenge strategy for the first time, do some due diligence and seek out the experience of others in the area, or your local chapter of the Association of Fundraising Professionals.

As always I welcome hearing from you on our blog about your experience with Challenge Gifts. Please post your comment or question. Thanks.

P.S. Did you see that Giving USA released their Annual Report on Philanthropy for the Year 2017 ? This report documents that $410 Billion was donated in 2017. The report contains a wealth of knowledge that should influence your fundraising strategy. Click here to see the summary.

Laurence A. Pagnoni

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