Creating a matching challenge is one of the simplest and most effective ways to encourage a potential donor to give. The challenge gives a donor an additional incentive to give (by increasing the impact of their gift via the match), and a reason to not delay (since all matching challenges should be time limited). This type of campaign also makes the donor who provides the match feel like they have increased the impact of their donation.
Challenge grants can be used for any type of campaign. Here is a great example of a challenge grant I recently made to help a non-profit start a recurring giving program. The organization is a women’s shelter that was struggling to build a monthly giving program. When they launched their monthly giving effort, they sent a solicitation to their supporters, but had limited response. I suggested we try a matching challenge and offered to give $100 for each donor who signed up for $10/mo and $200 for each donor who committed to $40/mo. The organization did a great job tying the solicitation into their efforts to raise money for a new shelter they wanted to build. They sent a mailing and several email follow-ups.
The results: 20 new monthly donors (1/3 for over $40/mo), compared to only 3 for their initial effort that did not include the matching challenge. The average monthly commitment was also 100% larger than the original effort. Although 20 monthly donors may not seem like a huge number, this is a relatively small organization. The solicitation was sent to about 1500 people. Also remember that the donor retention, and thus life time value, of monthly donors is much much higher than those who make individual gifts. By the way, many people assume that only your most loyal and consistent donors will sign up for monthly gifts, but 33% of the monthly pledges came from new donors and another 28% came for sporadic donors.