Perfect Match

There’s something about a fundraising challenge grant that gets the juices flowing.

The nonprofit announces, “If we manage to raise X dollars by such and such a date, then the Y Foundation will match your gift.” We’ve all heard it before, but the match formula never seems to get old. And it works. It works very well.

So here’s the fine print: it barely matters how generous the match is. As a New York Times Magazine article by David Leonhardt notes, studies show, yes, that having a match is a great enticement for donors. But the donors’ reaction is fairly similar whether the match is very rich (for example, one dollar for every dollar donated) or much more modest (say, one dollar for every ten dollars donated).

Donors’ indifference to the terms of the match seems counterintuitive. It’s as if shoppers were attracted to a sign, “Sale Today!” at a men’s clothing store, and it didn’t matter whether the suits are reduced from $500 to $480 or all the way to $100.

But that’s because donors don’t act like consumers. They simply love the idea of leveraging their gift for a greater return – and the size of that extra return is not critical. They like the excitement of trying to hit the goal. They like being part of a group effort. They like that they’re helping the organization squeeze extra funds from someone else. And it’s not as though they’re about to go shopping at another charity to find themselves a better match.

Are matches manipulative? Undoubtedly – but I love them. They give a focus and excitement to a campaign. They set a deadline and incentive for nonprofits prone to dragging their heels. If you can arrange a match for your next campaign, it’s a great way to go.

But here’s the key: be strategic. Don’t get panicked and rush to meet the match any way you can. Instead, use the match to attract new donors and to get increased commitments from established donors.

Say someone offers you $100,000 if you can raise another $100,000. The best outcome would be to have 100 or more different donors make commitments, with a good number of them being new donors. In that case, you’re using the excitement of the match to create a community of new friends and stronger supporters.

If, instead, a generous board member simply writes you a $100,000 check to complete the match on the first day – well, that gets you the money, but you’ve lost the opportunity to build that community of donors. You’ve both met the match and frittered it away.

My suggestion: if you get into a conversation with someone about providing a match for your campaign, consider negotiating with them to make it harder for you to meet the match. That is, instead of having them match you dollar for dollar ($100,000 if you raise $100,000), suggest that they give you $100,000 if you raise $200,000 or $300,000.

Negotiating to make the match harder for yourself is like steering into a skid. Your driver’s ed teacher told you it works, and you know that it works, but when you’re driving along an icy road, actually steering into the skid goes against all your instincts and is very, very hard to do. But making the decision to increase the amount you have to raise to get the match is the way to go. Not only will you have more money for meeting your mission, but you’ll have a bigger pool of committed donors for the future.

Don’t forget: once you achieve your goal, the excitement fades. Keep the excitement going as long as you can, keep bringing more people into the fold, and come out of the process with both the funding and the friends your organization needs for the years to come.

Copyright Alan Cantor 2012. All rights reserved.

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