How does your non-profit leverage donations to secure more funding?

Sorry for not posting anything on Tuesday morning. The internet connection from my hotel room was non-existent, which is why you’re receiving this late breaking edition. Enjoy!  ~Erik

IMG_20150802_102350339_HDR[1]A few days ago, I was in an airport trying to catch a connecting flight when I saw a poster advertisement for an international non-governmental organization (NGO) that provides medical services to children and families in third world countries. I took a picture of the portion of the advertisement that immediately caught my attention.

Every $1 you give will send $105 worth of lifesaving medicine and supplies.

One of the eight best practices I teach clients as it relates to fundraising is that challenge gifts are very effective and will help you reach your goal. The following are just a few reasons challenge gifts are effective:

  • it reassures donors that there are other big donors behind the campaign and lends credibility to what you’re trying to accomplish
  • it is inspirational and creates a bandwagon effect for donors
  • it gives donors the feeling their gift is bigger and more impactful
  • most importantly . . . it creates a “sense of urgency” for your fundraising staff and volunteers

There are many different ways to leverage one gift (or a pool of gifts) and secure other contributions. The following are just a few effective examples I’ve seen throughout the years:

  • Traditional challenge gifts to annual or capital campaigns where a donors says “I’ll match every dollar up to a certain level of contributions” 
  • Using a grant to leverage private sector philanthropy by telling donors that your organization secured a grant for a certain amount, but the program/project costs more which is why additional donors are needed before the grant can be ethically accessed
  • Securing in-kind contributions of supplies/materials and asking donors to underwrite the staffing and overhead costs needed to use the in-kind donation (as shown in the picture above)
  • Asking leadership giving donors to join a donor recognition society whereby their pool of donations will be used as matching dollars for other donors (e.g. national public radio does this very well)
  • Using one donor’s contribution (of any size) and asking another donor to match it (e.g. the Obama campaign did this very well with their online fundraising strategy)

In my experience, non-profit organizations reserve this strategy for BIG projects (e.g. capital campaigns, endowment campaigns, etc); however, there is no good reason why you couldn’t use this strategy to leverage additional dollars for your annual campaign, major gifts initiative (as long as it is project focused), special event, etc.

Please use the space below to share an experience where you successfully used a challenge gift or leverage strategy to raise more money for your organization. How did you identify the opportunity? How did you present it as an opportunity to the donor? What was the result?

Here’s to your health!

Erik Anderson
Founder & President, The Healthy Non-Profit LLC!/eanderson847

About DonorDreams

Erik got his start working in the non-profit field immediately upon graduation with his masters degree in 1994. His non-profit management and fundraising experience numbers nearly 20 years. His teachable point of view around resource development is influenced by the work of Penelope Burk and those professionals subscribing to a "donor centered" paradigm. Donors have dreams and it is our responsibility to be dream-makers because donors are not ATMs.

Posted on August 4, 2015, in Fundraising, nonprofit, resource development and tagged , , , , , . Bookmark the permalink. 1 Comment.

  1. Thank you so much for sharing wonderful posts that can make really good leaders for our world. God bless the work of your hands. Kindly like my blog and add me on LinkedIn.

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