"Ten Tips for Success in Securing Challenge Gifts" by Terry Axelrod

Having a Challenge Gift to announce at your Ask Event^™ can make a major difference in your asking success. This is an ideal enhancement if you have major donors who are ready to give in advance of your Ask Event. Whether given by one donor or pooled by several donors into a Challenge Gift Fund, when used as a matching gift, it gives the donor the perception of getting more for their money—a "bargain" of sorts. And we all love a bargain. Here is how it works.

1. First, go through your donor lists and rank your donors by giving potential. Then rank them again based on their passion for your cause. The handful who shake out at the top of both lists are your candidates for giving funds that can be used as part of the Challenge Gift.


2. Next, set your goal. Say you want to raise $100,000. Ask the top five donors from your lists if they would each consider giving you $10,000. Tell them you would like to use their collective $50,000 as a one-to-one match for gifts from other donors.


3. Then, at the usual time of year for your annual campaign, go to your other potential donors—the ones who are a bit farther down the lists. Tell them this year you have been presented with a wonderful opportunity: a group of your major donors has come together to stimulate the campaign to reach a new level. They have put $50,000 into a Challenge Gift Fund. Every dollar given will be matched one-to-one by this Challenge Fund. And there is a deadline by when you must fulfill the challenge.


4. Remind those donors who work for a company that matches employee contributions that this can mean a four-to-one leverage of their gift. They give $1,000, their company matches it so it becomes $2,000, and your Challenge Gift Fund donors match that amount, so the total gift becomes $4,000. The value of leveraging their gift in this way will not be lost on most of these folks.


5. Be sure to clarify with your Challenge Fund donors—the ones who seed the initial $50,000 in this example—what kind of a challenge they want to offer. Will their money match other donations dollar-for-dollar, two-for-one or three-for-one? Also decide in advance how you want to handle donor pledges. Will they "count" in the match? Will those who pledge still give you the full amount of the Challenge Gift even if you don't fulfill the match? Will the employer's matching portion of each gift count in the base gift to be matched by your Challenge Gift Fund?


6. Another highly effective twist: Use the Challenge Gift Fund to match only the increased portion of a donor's gift. In other words, if they gave $500 last year, the Challenge Fund will match whatever amount the donor gives beyond $500 this year.


7. Think through all the ways you can promote the Challenge Gift Fund. Decide if you want to showcase the founding donor or donors to the fund. How can they help you bring in more donors? Can you write about it in your newsletter, include it in other mailings, send out a special announcement about it, or kick it off at the annual event?


8. Before you announce the Challenge Fund, put together several foolproof strategies for fulfilling on it. You will need ten gifts of $5,000, twenty gifts of $1,000, etc.


9. Be sure that you, personally, are excited about the potential of the Challenge Fund for your organization. What will it provide in the way of programs and services? Can you articulate this to potential donors?


10. Remember: people want to know that you need their support and that you will use their gifts wisely. The more you can leverage their gift, and the more of a "bargain" they feel they are getting for it, the better.