There they go again, another pledge drive for local public broadcasting television and radio stations where programs are interrupted for on-air fund raising. Some viewers find this annoying, yet these stations rely on these drives to be able to continue to bring their quality programming to the public. And businesses can get great a PR boost with their on air presence where employees are manning the phone lines and with reminders to the public of their generous matching donations.
Matching donations and challenge grants are a great strategy for any business to use in their philanthropy, as they leverage the benefits of their giving to non-profits which can be used to engage customers in consumer philanthropy. Whole Foods sets an example of how they do this with their some of their in-store fund raising. See other examples of Whole Foods and their creative consumer philanthropy in former posts.
This brings me to two studies, one on the effects on charitable giving with different levels of matching donations and the other on the differences between challenge grants and matching donations. Essentially, the first study out of Yale University, found that 1:1 matching grants greatly increased revenue per solicitation overall levels of giving. The second study designed for the fund raising campaign for the British Columbia Chapter of the Sierra Club of Canada showed that challenge grants had more impact on overall giving than even matching grants.
I recently had a personal experience where I experienced the power of the extra challenge in making a difference in my giving. My college Alma Mater called asking me to renew my pledge this year. At first I was planning to not increase my annual donation. I was pleased to hear that the trustees had established a scholarship challenge to match every gift to the Fund meaning that my renewed gift would be doubled. But here was an additional challenge- that all increased gifts would be tripled. That meant by increasing my donation by $1.00 (well it ended up to be $10.00) the entire amount of my giving was tripled.
How could anyone say no to that?
These studies and my experience as a donor, suggest that there are a host of creative options that a business should consider when offering matching grants and challenges to a non-profit. Whatever a business chooses to do has important implications on the amount a charity receives.