Challenge Gift Fundamentals

A Challenge Gift or Challenge Grant is usually a large gift that comes from an individual, corporation, or foundation that will challenge others to give a gift at a certain level and then will make a donation if the "challenge" is met.

Usually, a Challenge Gift is made in a multi-million capital campaign by one of the Lead Gift donors.  This donor will only make a large gift (say $1,000,000) that is contingent on it being equally matched by another donor or number of donors (give a combined total of another $1,000,000) by a certain date.  If the Lead Gift is from a foundation, it is usually called a Challenge Grant.

In smaller campaigns, like annual campaigns or telethons, a "challenge" gift is made (say one skater to give one gift of $50) by someone who asks an unknown number of other individuals of like mind to make the same type of gift (like 10 other skaters to give $50 each for a total of $500).

In both cases the outcome is the same  to encourage others to maximize their gift with a challenge or matching gift from a key individual in your organization.  This will energize all donors to give more than they would normally; thus, bringing in more funds for your campaign.


Campaign Example

What if you were a local environmental group and you were building a nature trail and bird observation tower through an environmentally sensitive area.  This may require certain studies and precautions taken that will take $750,000 to complete.  This is your special campaign.

Your further know of an individual that is deeply concerned about the proper use and public educational opportunities in this environmentally sensitive area.  You approach and ask this individual to be the Lead Donor  in the "Bird Sanctuary and Nature Trail Campaign".  They agree to give $200,000 if a number of high profile contributors give an equal $200,000 within an eight month period.

From then on, each prospective donor you meet has the opportunity to double their gift.   For example, you may say, "Mr. Hawk, thank you for considering a gift to the Bird Sanctuary And Nature Trail Campaign.  You can double your gift, because a major benefactor, Mr. Falcon, has agreed to issue a Challenge Matching Gift of $200,000 if met by August 30.  Your gift of $25,000 will actually be doubled to $50,000 if  you join with us now in meeting his challenge.  May we count on your gift of $25,000 toward our campaign Mr. Hawk?"


Small Annual Campaign

A local Boy Scout Troop will be traveling on a High Adventure Trek next summer that will cost $6,500.   On the Troop Committee is a businesswoman that cares deeply for the way that these young men have benefited her community.  She agrees to make a gift of $250 toward the trip fund.  As an incentive to attract other connected businesses, parents, and her professional contacts, she offers a Challenge Gift of an additional $1,000 if other $250 dollar gifts can be raised for a combined total of $3,000 can be raised within six months.


Keep The Fire Going

It is very important to keep the intensity of your campaign going.  Use a chart or a "thermometer" chart to show how much has been raised when approaching each new donor.  As your donations approach the Challenge Gift goal, you will find that your final few donors will be much more likely to give what you asked.  They will do this because they want to be on a winning team and a part of something successful.

The chart should show the Challenge Gift reserved for the upper portion of your goal.  As each donor gives their share, mark the chart right in front of them to update your progress.  Post your chart in a location for all to see.  You may be surprised that some of your donors will get so fired up that they will refer others to your project.