Fundraising Q&A: I’ve been reading negative press about challenge gifts. What do you think?

You may (or may not!) be referring to the hype around Nike co-founder Phil Knight’s $500 million challenge gift to Oregon Health & Science University.

Some people seem to see it as a positive thing; it will boost philanthropy as a whole and attract new donors to a variety of causes, they say. But, others are worried. “One nonprofit said in a survey that major donors were suspending their support to contribute to the Knight challenge.”

Personally, I think that fear of major donor poaching to be a little suspect, even whiny. How committed are they, if they’ll jump ship at the drop of a hat (or a few bucks)? How engaged are they in your work in general, and the work that their dollars are funding in particular? Are you communicating (remember – show and tell) the impact that your organization and their funds are having? Do they have concerns about management, or feel less than satisfied with their experience? The onus is on you to build and sustain the relationship.

I have had some experience with challenge gifts both as a fundraiser and a donor, and believe that they can play a useful role, if done for the right reasons and in the right way.

As a board member – especially if you find yourself chairing a campaign – you know (or should know!) that you will be expected to contribute. A challenge gift can be a great way to underscore your commitment, and encourage others to step up as well. It can be a big boost to hardworking development staff too, to know they have leadership’s support.

Here’s a word to the wise: You are likely to get a lot of questions.” For example, let’s say that the challenge says that someone has committed a total of $500,000 to match dollar-for-dollar all new pledges over the campaign period. Here are some questions that may arise; a lot of them are around “what counts.”

  • Exactly what is the time frame, for making the pledge and paying up?
  • What if someone doesn’t want to make a pledge, but in fact makes a gift over that period?
  • Do gifts by someone’s spouse, child or foundation count?
  • What about a gift brought in by someone from another person?

You get the idea. All fair questions, I might add. The lesson is that you might as well clarify the rules of the game for the challenge up front, to avoid problems in execution. Good luck!

This entry was posted in Fundraising Q&A. Bookmark the permalink.

Comments are closed.