Anyone who’s ever listened to a public radio station in the U.S. will be familiar with the concept of a challenge gift drive. Deep into the annual pledge drive, the radio host announces something like, “Sponsor X is committing $5,000 toward our goal of $10,000, but only if we can raise the rest of our goal by the end of the month,” or “Sponsor Y will match, on a 1:1 basis, each of the first $5,000 in gifts we receive until the end of the month.” No matter what your taste in radio programming, these time-sensitive pledge drives are inevitably irritating to listen to. Even professional fundraisers would rather hear music. Yet they endure. Why?
The notion of the ticking clock is a recurrent theme in our journey through higher-level fundraising. During those “urgent” thirty minutes of the challenge, anyone who’s ever thought about giving, or who has pledged money in the past, is almost forced to think, “If I give now, it’ll be like giving double or triple the amount. If I wait past the deadline, my gift will only be worth half or a third of what it could be.”
The approach works because it is tied to a sense of urgency. The ticking clock trumps all, if you will. In fact, oftentimes a donor will still give a challenge gift even if other donors failed to live up to the challenge. Because they can jump-start a campaign, or act as a midcourse correction to energize a flagging campaign, challenge drives are almost always an integral part of capital and endowment campaigns. They are equally effective in annual fundraising, sponsorship, and any other effort to secure underwriting, all for a negligible increase in your overall fundraising costs.
A similar matched-giving alternative for nonprofits exists within the realm of corporate matching gifts. Corporations need tax write-offs as well as opportunities to burnish their public image through good “corporate citizenship.” One of the ways they accomplish these two objectives is by matching their employees’ charitable contributions. As with challenge giving, the matching ratio some company programs offer for each dollar donated can reach as high as 4:1. Yet, surprisingly, this rich potential resource goes largely underused.
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 (upfront or when the challenge is met), and how the challenge will be advertised or marketed.
In some cases, donors will propose a challenge gift on their own. However, if your strategy is to wait until that happens, be forewarned: you are more likely to grow old than grow rich. The urgency behind challenge giving needs to begin with you, the fundraiser. Develop a proposal and take it to a major donor. Spell out what the challenge gift will do to help raise more money from other donors. A challenge gift is focused on a specific issue to solve a precise problem. It’s not a general appeal; rather, it’s a targeted effort to solve a problem that’s easy to understand and articulate. You can and ought to show the major donor how much a challenge boosts responses compared to a typical appeal. Use the same pitch on the board. It’s all about leveraging the money.
If you don’t know what it will cost to complete the project at the heart of your challenge, take the time to figure it out. Just because you or the challenge donor thinks “x amount” of dollars will be sufficient, doesn’t mean it will be. Another question to consider is timing. Given that a challenge drive can increase giving by 30 percent, do you use it to pump up donations in a slower part of the year, or do you capitalize on your best giving season, say, end of year? Most signs point to the latter option as your best one, although it’s up to you to do what best suits your agency’s fundraising needs.
Implementation of your drive involves finding the right individuals to take the lead, coming to an agreement about the procedure, and getting the word out. Those three steps should unfold as follows:
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 efforts. 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, it’s important for you to be proactive and let your donors know upfront 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 large challenge gifts, 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:
As I mentioned previously, there is another important type of matching gift that happens outside of a challenge drive. Corporate matching, as it is known, was begun back in 1954 by General Electric Company. Through its Corporate Alumni Program, the GE Foundation began making matching gifts to colleges and universities, eventually expanding to other areas of charitable giving. Today, countless companies such as Johnson & Johnson, Microsoft, and Union Pacific Railroad match employee contributions, sometimes at a ratio as high as 4:1. Naturally, some companies have overall and/or per-employee limits to their matching programs, but the leveraging power of these programs is nonetheless formidable. A 2012 survey by the Committee Encouraging Corporate Philanthropy found that 83 percent of surveyed companies offered at least one matching gift program.
Though some agencies, such as political organizations, sports teams, and religious organizations, are restricted from applying for corporate matching programs, your own agency is quite likely eligible. If your church, synagogue, mosque, or meetinghouse focuses on community outreach, you probably qualify as well.
Increasing your fundraising through corporate matching doesn’t cost more, though it takes some extra dedication from your fundraising team. To begin with, most individuals outside of the nonprofit sector have never heard of, and have never used, employee matching gift programs, so you’ll have a lot of promotion and explaining to do. You may also worry about how to manage this work owing to staff or volunteer time constraints. Worse, if yours is like most development efforts, you probably have very little information on where your donors or their spouses work, and even when you have that information, you must still keep track of employee-giving programs at all of the companies where your donors or members work.
Finally, assuming you can manage those areas of focus, there’s still the challenge of letting your donors know the appropriate process, guidelines, and steps so that they can complete the matching gift requests on their own. Is it any wonder that much of the available money goes untapped?
Thankfully, there are tactics in your fundraiser’s toolbox that will help you ford this procedural and bureaucratic stream. If you lack sufficient staff, you can ask a volunteer to study and learn about this unique area of giving. Another option is to use a free searchable web page on corporate matching, such as those offered on the websites of most major universities (Stanford, Penn, American University, for instance). These services allow donors to instantly determine their eligibility and access company-specific program requirements and forms. You can provide donors with a list of corporations that offer these programs (also available for free online at Double the Donation and many other sites) and ask them to check with their own employer.
As you begin unearthing corporate matches, try to walk in the shoes of your donors and think through all the ways they might get stuck in getting their employer’s match. Address their issues in advance. Make it easy for them and guide their charitable actions. Instead of simply asking them to check with HR on corporate matching programs, provide them with the necessary guidelines and forms.
Whether you help your donors find a corporate match or take the time to organize and implement a challenge drive, your potential benefits will easily outweigh the costs of your extra fundraising efforts.
Challenge gift drives can unlock exponential giving, often doubling, tripling, or quadrupling the size of donations. The same is true of corporate matching gifts. Because challenge gift drives thrive on a sense of urgency, doing all you can to learn about and assist your donors will go a long way toward crafting the right kind of drive, or the right corporate match, for your agency. The easier you make it for your givers, the more likely they are to contribute.