At The Curtis Group, we believe that 1+1 can equal much more than 2 when we leverage gifts to encourage and motivate others. We like to call it the ripple effect, when one gift has the power to spread far beyond a single donation.
In our work, we have witnessed firsthand how an effective challenge gift can create momentum and raise more dollars. Recently, we saw an anonymous donor’s year-end matching gift raise $500,000 for one of our campaign clients and propel them to within sight of their campaign goal.
The fundraising world defines a challenge gift as a donation in which a large contribution is announced in conjunction with a solicitation for support. These types of gifts can be used in a number of different ways. They can be announced as leadership gifts to kickstart a program or campaign. They can be announced as donations to cover overhead costs for a new initiative or campaign. And they can also be used as matching gifts, when a donor offers to match some or all gifts up to a set dollar amount. In recent years, these challenge gifts have been a popular fundraising strategy and have been very effective. More than likely you have heard of, if not given as a result of a challenge gift.
With the increased use of challenge gifts in the nonprofit sector, there has been a simultaneous increase in research to understand the impact of these gifts. Research has been published in the Journal of Public Economics, the Science of Philanthropy Initiative, Science Mag, and the American Economic Review.
Rather than inundate you with experimental design, stats, mathematic formulas and standard deviations, we want to offer four key takeaways from the research that should encourage you in your philanthropy.
In conclusion, there will be no ripples if we don’t spread the word about the power of giving. Nonprofits should be thanking donors often and as visibly as possible when they receive a transformational gift to cover seed funding for a new program or a matching challenge gift. It will help the nonprofit you are supporting if you are willing to share your experience, the nonprofit’s mission, and boldly challenge your neighbors and colleagues to support it.
Let’s make ripples.