Soapbox Engage Blog

As you know, the year-end fundraising season is critical for many nonprofits to bring in a large portion of their annual budget and fund projects and programs throughout the following year. Many fundraising experts agree that one of the most effective strategies for year-end fundraising is the matching gift.

We aren't talking about matching gifts that generous companies often provide their employees for their financial donations. We're talking about the kinds of matching gifts that come from foundations or major donors to match the contributions made to a particular fundraising campaign. These types of major gifts are often called "challenge grants," and they're designed to kickstart or fuel a fundraising campaign.

We rounded up some practical tips and insights to help you use "challenge grants" to fuel your year-end fundraising campaigns.

Table of Contents

1. Challenge grant matching gift essentials
2. Insights about matching gifts
3. Make matching gift campaigns more effective

Challenge Grant Matching Gift Essentials

Whether you're running a major capital campaign or a sizable year-end fundraising campaign, it's critical to get your campaign off to a great start. Large matching gifts can help you build donation momentum quickly and even lend your campaign credibility.

One study showed that simply announcing a matching gift led to an average 19% increase in giving. And, matching gift opportunities increase the likelihood that someone will make a donation by about 22%.

Challenge grant vs. matching gift

While these terms are often used interchangeably, there can be a subtle difference between the two.

A challenge grant is paid when the nonprofit raises a certain amount of money from other sources. Donors are motivated to contribute to the cause to "unlock" these challenge grant funds and double the total funds raised.

A matching gift, on the other hand, matches each donor gift. That means if Billy gives $100, the matching gift "releases" another $100 toward the campaign. Some matching gifts will double each donation up to a total amount. Others may match all gifts pledged during a certain period of time.

With both matching gifts and challenge grants, everyone wins. They energize your campaign and give you and your supporters something exciting to work toward--receiving as much of the "extra" money as possible!

Insights About Matching Gifts from "Freakonomics"

You may have read the book or listened to the podcast "Freakonomics with Steven Levitt and Stephen Dubner. Levitt partnered with the economist John List to take a deep dive into fundraising--including matching gifts. While we highly recommend listening to the podcast, here are a few key takeaways as you prepare your year-end matching gift campaigns.

Quality matters--especially to your major donors

Levitt and List found that donors want to be sure their gifts will make a real impact in the world. Because most people don't have much time to research nonprofits in-depth, they rely on "signals" to judge the quality of the organization or cause.

Matching funds can be a crucial indicator of a trustworthy nonprofit. After all, a major donor or organization considers the cause SO worthwhile that they're willing to put large sums of money behind it!

One study revealed that just naming the Bill and Melinda Gates Foundation as a source of a matching grant (rather than not revealing the source) increased the number of donations by 26%! People familiar with the Gates Foundation consider receiving a grant from them a "seal of approval."

Similar studies revealed that high-impact donors (those who can give large sums of money) value quality signals even more than donors who give smaller gifts. Greater giving potential leads to more caution and a deeper desire to invest wisely. So, consider adding details to your matching gift information that helps "signal" that your nonprofit or campaign is a trustworthy and worthy investment!

Even a penny makes a difference

Another interesting finding from Levitt and List is that telling potential donors "even a penny will help" can increase participation in a fundraising campaign by about 20%. Add a phrase like "The average gift is $5," and it boosts donations even more! However, it's best to keep the suggested donation amount low as higher suggested donations cancel out the "every penny helps" statement.

4 Easy Ways To Make Matching Gift Campaigns More Effective

Now that you've got some tips and insights about matching gifts, we asked some fundraising experts to offer practical tips for using matching gifts effectively, especially during year-end fundraising. They did not disappoint!

1. Set goals with time-limits

Having a time limit to the matching gift creates a sense of urgency and can help move people toward action. Rather than saying, "Give now, and your donation will be matched," add a few more details and parameters. "Donate by December 25 to help us match your gift!"

If there's not a sense of urgency or a deadline for action, people often put it aside and forget that they fully intended to make a donation.

Another psychological factor is that donors generally don't like feeling "trapped" in a never-ending campaign. Setting a deadline for the matching gift opportunity also creates a sense of finality or closure to the campaign, and you can report precise results from your efforts.

2. Provide "social proof" that others are giving

Social proof is one way we humans discern the correct action in a particular situation by referencing what others are doing or what others think is correct. Even when it comes to charitable donations, people want to know what others are doing. Leverage this bit of human nature for your fundraising advantage!

There are loads of creative ways to show progress. Include a progress graph on your website or social media channels. Send regular email updates with a more detailed financial breakdown. No matter how your team decides to provide "social proof," it's worth the extra effort! Tell supporters how many people have donated, how much you've raised so far, or how much of the matching funds your nonprofit has "claimed" through donations.

3. Communicate frequently during the matching gift campaign

While we're on the subject of sending regular updates, frequent communication is critical during a time-limited campaign. You might feel like a broken record, but keep reminding your supporters and followers of your fundraising goal and the deadline for matching gifts.

People have great intentions, but life gets busy, and distractions are plentiful. Don't be afraid to send frequent reminders and updates across various channels to remind them that the matching gift depends on taking action before the deadline.

4. Expand your potential donor list

Invite your supporters to ask on your behalf--sort of like an informal crowdfunding campaign! This strategy is particularly effective when it comes right after someone makes a donation. Consider adding a message to your post-donation page or confirmation email that says something like,

"Thank you for your gift! Would you be willing to take just one more step and forward the following information to a friend, family member, or colleague?"

Then, include a message that's easy to email or share on social media. Some nonprofits even include a "share" button that allows donors to share about their donation on social media platforms (sort of like a referral program that many businesses use).

The most important thing is to experiment and find what connects with your audience and then do more of it! Even though working with major donors to provide matching gift campaigns requires a bit more time and energy, the investment can really pay off in the long run and help you accomplish your year-end fundraising goals.

Now that you're ready to launch your year-end matching gift campaign, here are three more resources to keep your fundraising going strong.

• How to Drive Matching Gifts this Giving Tuesday 2021: If you're looking for ways to maximize your Giving Tuesday success this year, matching gifts might be the solution you need. This blog offers a handy guide to help your nonprofit team prepare for Giving Tuesday and drive matching gift revenue to new heights!
• 5 Tools to Make Nonprofit Event Planning Easier: With the big year-end fundraising season coming up, many nonprofits are looking forward to hosting their biggest fundraising events of the year. Planning and executing major events is quite an undertaking. This blog offers some tools, tips, and resources to help save you time and make event planning just a little easier.
• 9 Ways to Improve Your Nonprofit Email Subject Lines: Subject lines set the tone for your email and can impact whether your readers open and donate or not. Most of us receive dozens or hundreds of emails each day, and it's critical to write appeal email subject lines that stand out and draw readers in. Here are insights from industry experts to help you write great subject lines for your next email appeal campaign.