A challenge gift drive begins when a donor makes a substantial donation. Usually it’s a trustee or someone who knows and trusts your organization and has been giving for a while. Someone in your fundraising department realizes that now is a terrific opportunity to encourage giving by others. The fundraiser chats with the donor, and then if they are in agreement, you launch a challenge or gift drive, following the guidelines that you and the donor work out and sign off on. Guidelines can include whom to target for the challenge, when the donor pays (up front or when the challenge is met), and how the challenge will be advertised or marketed.
Implementation of your drive involves finding the right individuals to take the lead, coming to agreement about procedure and getting the word out. Those three steps should unfold as follows:
Make a short list of those donors you can ask to make a challenge gift. In the absence of a challenge donor, I recommend you identify several possible donors and assemble them in order of priority. The prospects on your list should include the most thoughtful and current donors—the ones who truly “get you” and what you do. Focus on top prospects and solicit lead donors in person. Many fundraisers start with the board chairperson, then move to the development committee chair, then to all the trustees, then to donors who have given significant gifts before (aka lead givers), and then to the community at large. As with any major gift fundraising, if a prospect replies, “I’ll think about it”, be sure to ask, “When is a good time to get back to you?”
Write an agreement or pledge, once the challenge gift is secured, that explains the terms binding the donor’s promise, even though it’s unlikely that it would be truly legally binding. Donors can, and at times do, withdraw and cancel their pledge for various reasons, although in my experience it rarely occurs. Nonprofits hardly ever take legal action against them. But memorializing a pledge in writing will inevitably reduce the chances of misunderstandings and hurt feelings. Keep your agreement simple and avoid a lot of “legalese”. Here are some basic points to cover:
Promote the challenge and its progress in your newsletter, on your website, by e-mail, and in your local community newspapers. Leverage the free coverage you can get from a journalist doing a story about why you have the challenge drive. When you pitch the story to local editors, focus on what the drive seeks to accomplish, not the drive itself.
A challenge gift may help you secure new donors or renew lapsed donors. Most evidence points to the success of the challenges in stimulating response among active, current donors. A challenge gift not only increases giving levels of current donors, it elevates their thinking about what level they could be giving in the future. It also reinforces and tangibly demonstrates the concept that “the sum of our giving is greater than each individual’s part”.
What is your experience with challenge gift drives? Let us know in the comments below.