What could excite your donors more than doubling their gifts? Challenge gifts are ways for nonprofits to use donor relationships to raise more funds. As you try to meet your nonprofit’s fundraising goals, visit your donor database to find potential donors and sponsors to fund a matching gift campaign for your organization. Read more on how to develop a challenge gift campaign and ways to use that gift to inspire more participation from your donor base.
According to studies, challenge gifts attracted23% more donors and 18% more dollars than identical fundraising campaigns without the matching gift challenge. In this article, we’ll delve into different types ofmatching gifts, how to secure them, and ways you can ensure your campaign’s success.
What is a Challenge Gift?
A challenge gift uses nonprofits’ relationships with a major donor or corporate sponsor to raise significant amounts. The challenge donation – also known as a challenge pledge or challenge grant – typically has a condition or challenge attached or a set timeframe that inspires urgency in the rest of your donor base. The donor or business will only donate a certain amount if that specific challenge is met.
6 Types of Challenge Gifts
Challenge grants can take several forms. Let’s take a look at a few of them.
Employer gift matching
While employer-matched gifts aren’t exactly challenge gifts, they are an excellent starting point and can easily double the impact of your supporters’ gifts without much time needed on your end. Nonprofits that collect details on donors’ employers and promote a simple way for them to get these matching gifts will have a greater chance of success.Donorbox and Double the Donation have integrated to offer a simple way for nonprofits and donors to secure these gifts.
Watch to learn more about employee gift matching and our integration with Double the Donation!
A dollar-for-dollar challenge is the most common matching gift. A major donor or company pledges to match donations up to a certain amount. For example, every dollar raised until $25,000 will be matched by a company for a total of $50,000 in donations, effectively doubling the impact of each donor’s gift.
Nonprofits can develop these challenge gifts with donors and corporations with whom they have solid relationships.
Threshold Challenge
A similar gift challenge idea is when a donor or corporate partner pledges to donate a specific amount if the organization meets a particular fundraising goal. For instance, a donor promises to give $25,000 if a campaign can raise $50,000.
Time-based Challenge
Another type of challenge grant is when donors pledge a certain amount for every donation made during a particular hour or day. Matching gifts like this work best on popular campaign days likeGiving Tuesday. But you can also extend it to last the length of a campaign – just make sure not to push it beyond a couple of weeks, or you’ll lose out on that sense of urgency.
Incremental Challenge
Donors can also strengthen the impact of their matching gifts by committing to an increase in their donation amount if other fundraising meets a specific financial goal. A donor can start with a $10,000 gift and pledge to increase it by another $10,000 every time the organization raises another $20,000.
Leadership Challenge
Finally, nonprofits can encourage a domino effect in influential circles by agreeing to a leadership challenge. In some cases, high-profile individuals or groups may offer significant donations if another leader or organization also contributes. Perhaps one of your board members would offer a challenge gift if the rest of the board contributes a specific amount?
How to Secure a Challenge Grant
Securing a challenge grant is a multi-step process that requires strong relationship building and a detailed plan.
Identify prospective donors or organizations
To secure a challenge grant, you must first list all prospective donors or organizations. Determining donor capacity is a great place to start!
Your list should include major donors and corporate sponsors, including potential donors and sponsors who have connections with your board members or donors. A challenge grant can also be an excellent way to inspire a potential donor or sponsor to act!
Craft a compelling proposal
Moves management is a process of steps to take to develop a major donor. You should have an individual moves management plan for each donor that shares their ability to give and interests in specific programs and projects.
These plans give your organization a firm threshold to create a proposal outlining your organization’s goals for a specific project or campaign that requires funding. Your proposal for the challenge grant should be structured to highlight the impact their gift will have on the program and your mission.
You must also personalize the proposal and include how the donor can benefit from increased visibility and recognition with the press and on social media. Nonprofits can offer additional perks and naming rights to sweeten the pot.
Meet with the donor
Once you have a proposal for your donor, it’s time to meet in person. You’ll want to choose a location that makes the donor comfortable. You can also ask a board member or donor with a personal connection to attend the meeting with you.
At the meeting, you’ll negotiate the terms and discuss specific details of the challenge grant. You must be prepared to share the details and benefits of your proposal, be ready to answer questions, and be willing to adapt the proposal if necessary. You’ll also want to share how you plan to communicate with your donor base and how the challenge will be used to inspire other supporters. And be sure to follow up with a thank-you note and a recap of what was discussed!
Formalize the agreement
After you’ve come to an agreement, you must formalize it in writing with a Memorandum of Understanding (MOU) or detailed contract. This contract should outline the responsibilities of both parties and include reporting requirements and recognition for the donor.
Start the campaign
Now, it’s time to start your campaign. As you promote the challenge grant to the public and your donor base and begin to raise funds, remember to send regular updates and reports on the campaign’s progress.
You’ll also want to show your appreciation for their matching gift privately and publicly. You must send a written acknowledgment and call or meet with the donor to share your gratitude after the campaign.
It’s crucial to remain transparent about the amount of the matching challenge gift and what the donor will receive. In addition to fulfilling any agreed-upon recognition with the donor before, during, and after your campaign, you should include the donor’s or company’s name (unless they request anonymity) on all printed, email, and social media marketing materials.
Putting a Matching Challenge Gift to Work
A successful matching gift challenge requires extensive planning, promotion, and support.
Plan your campaign
Your challenge gift campaign must have a clear goal. The financial goal is easy if you’ve agreed upon a dollar-for-dollar challenge. You can look to past fundraisers for an achievable goal for other campaigns.
Campaigns like Giving Tuesday or annual fundraisers will automatically have more marketing potential and donor interest. If you pair your matching challenge with a significant day or campaign, you may have a better chance of reaching your goals.
Since most challenge grants raise funds for specific programs or projects, you should have an easier time sharing how the matching gift will impact the organization. Remember to share particular amounts and conditions of the gift. From there, you can develop a communication plan with a compelling message.
Promote it extensively
Your campaign’s communications should highlight how donors’ gifts will double (or maybe even triple!) and the impact of their support. You’ll want to add these details to your print and online donation forms and share them on social media posts, fundraising emails, and website banners.
Another way to increase donors’ interest in your campaign is with storytelling and real-life examples. Beneficiary stories and images showing donors’ real-time impacts will make all the difference in meeting your fundraising challenge.
Engage supporters
A campaign like this will have a much larger chance of success with help from your donors. A challenge grant is an excellent opportunity forpeer-to-peer fundraising. A peer-to-peer or crowdfunding campaign will increase your organization’s outreach and help raise more funds.
Donorbox Peer-to-Peer makes it easy to get started with your own peer-to-peer campaign. From there, you can invite your supporters to create their own fundraising pages to share with their family and friends. This expands your reach, bringing in new donors and getting you closer to meeting that challenge gift goal!
Before your campaign begins, you should personally connect with a few supporters with a significant online presence and work with them to set up their own online campaign forms. If your nonprofit has relationships with any online influencers, now is the time to take advantage of their sway.
After finding a few donors to start peer-to-peer campaigns, you should ask donors and volunteers via email and social media to create campaigns too. You can also encourage more participation with a fundraising contest and prizes.
Before and during the campaign, you’ll want to share updates and graphics, videos, and pre-written messages with volunteers. You’ll also need to send regular updates on the project and campaign. One way to do this is with a donation thermometer that acts as a visual reminder of how much you’ve raised and how far you have to go to reach your goal.
As your campaign continues, monitor your campaign’s performance and adjust your strategies to optimize results. You’ll also want to stay in communication with donors and volunteers after your campaign and continue to strengthen these relationships.
Conclusion
Fundraising for nonprofits isn’t a one-size-fits-all solution. Challenge grants are one of the tools that help you raise more funds and strengthen donor relationships. Matching gift challenges encourage further involvement from potential major donors and sponsors. As you research these donors, look at your donor database what may inspire them to act.
Donorbox offers nonprofits access to a qualitydonor management system to store donors’ demographic data, add notes, and segment them into different donor types.Visit our website to learn more about how to take your nonprofit to the next level with donor management tools.
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Kristine Ensor is a freelance writer with over a decade of experience working with local and international nonprofits. As a nonprofit professional she has specialized in fundraising, marketing, event planning, volunteer management, and board development.
Kristine Ensor
