You’re probably familiar with the challenge or matching gift. A generous donor provides a gift or grant on the condition that you raise an equal amount from other sources.
These gifts typically require a 1-to-1 match. Each donation you receive is matched dollar for dollar, though other ratios are possible.
Challenge gifts are effective because the pitch includes two irresistible components. Good value for the donor – “Double your money! Your gift of $50 becomes $100!” – plus a deadline that creates a sense of urgency.
You can also use challenge gifts to change behavior, not just raise money. Here are two great examples.
Use challenge gifts to encourage board training
A colleague learned I was traveling to her community to lead a fundraising workshop. She really wanted her board to attend, but they expressed little interest.
So she got creative. She identified two donors who pledged $500 each on the condition that nine out of ten board members attend the training. (Notice the specific benchmark: nine out of ten.)
She brought this challenge to the board with a bit of humor. “If nine of you will show up, we’ll receive $1000 just because you’re in the room. You don’t have to participate. You can sit in the back and scowl for three hours, but you have to be there or we can’t collect the money.”
Well, they came, they participated, and I didn’t notice any scowls.
My favorite part: when the training was over, they wouldn’t leave the room. They huddled in the back, strategizing about how to apply what they had just learned.
If you’re cynical, you might view this as bribery. I prefer the word “motivation.” Because the donations went to the organization, rather than individual board members, no laws or ethical standards were broken. They were given an incentive to participate, and they rose to the challenge.
Each time a trustee meets with a donor, an extra $500
A colleague of mine, a development director, was struggling to convince her board to join her for donor meetings. They had the usual excuses, so she conducted these meetings on her own.
In frustration, she shared her struggle with a foundation officer – and the two of them devised a brilliant solution. She returned to the board with a proposition.
“I just received a $10,000 challenge grant on the condition that board members join me on twenty donor visits. Every time you come with me, we receive an additional $500 from the foundation just because you’re in the room.
“You don’t have to ask for the gift. I’ll do that. Your job is to talk about our work and why it’s meaningful to you.
“Get out your calendars and tell me when you’re available.”
Aversion Therapy for Your Board Members
This is an example of what psychologists call aversion therapy. People are scared of something – snakes, spiders, donors, whatever – until they’re exposed to it, and then they discover that their fears are irrational. Yes, some snakes and spiders are dangerous. Donors are not. Encourage board members to sit down with a supporter or two, and they’ll look forward to doing it again.
As with the previous example, this challenge provided an incentive for board members to change their behavior. They met the goal and collected the grant. Everyone felt proud. After that, it was much easier to recruit the board to meet with donors.
Get creative – challenge your board!
Challenge gifts can be applied to almost any aspect of board behavior. If you’re focusing on fundraising, here are a few additional metrics you could link to challenge gifts.
- 100% board giving. The donor provides a gift on the condition that all board members also give.
- Prospecting: The challenge is complete when all trustees provide at least five names of potential donors.
- Thank-you calls. When the board phones 100 donors to thank them – for example, ten trustees each calling ten donors – the challenge gift is received.
Here’s the best part
When you use a donor’s gift to change and strengthen your organization, you engage that donor in a much deeper, more intentional way. When you meet the challenge requirements, you’re delivering on your promises, reinforcing the board’s efforts, and deepening your connection to the donor. Everybody wins.