How to Leverage a Challenge Grant to Accelerate Your Campaign

The success of a capital campaign depends on several factors. One of the most important is to get your effort off to a strong start, which is most effectively accomplished by securing large, pace-setting gifts. Securing early, significant support provides the initiative credibility. Early success, in turn, inspires confidence in solicitors, creating momentum that results in more major gifts.

In the quest to attract large gifts, especially early in a campaign, challenge grants are a unique approach that, when executed properly, result in several large gifts in a brief period of time.

A challenge grant is a (semi) conditional significant gift made by a donor or group of donors that is fulfilled when others step forward to support the campaign at a specific level and/or by a specific deadline. There are a myriad of ways in which a challenge can be used to support a campaign. A few examples include:

• A challenge tied to participation levels. For example, the College of the Holy Cross has successfully conducted a 50% participation challenge over the past three years.
• An existing gift used to attract a new or larger gift. For example, the chairman of the board of a large social service organization offered to match all seven-figure gifts from new donors to kick off a $50 million campaign.
• Dollar-for-dollar: For example, a large East Coast academic medical center concluded its annual fund drive with a $100,000 match from a member of their board to ensure that the effort reached its goal before the end of the year.
• Two-for-one: For example, this strategy is highlighted in the following profile of the Fifth Avenue Presbyterian Church’s Kirkland Challenge.

Challenge Grant in Action: The Kirkland Challenge

In 2014 one of CCS’s client partners, Fifth Avenue Presbyterian Church, effectively leveraged a challenge grant to launch the Major Gift phase of its $12.5 million Generation to Generation restoration campaign. The first pledge received a $2.5 million commitment from a family of noted philanthropists who encouraged the church to leverage their support in any way that could help the campaign. When presented with the option of issuing a challenge, the family was enthusiastic about the idea.

The challenge was branded The Kirkland Challenge in honor of the former Senior Pastor, Bryant Kirkland, who would have been 100 years old at the time of the launch. Several scenarios on the implementation and timing of the challenge were considered, but ultimately a two-for-one match for all gifts of $25,000+, not to exceed $1.25 million (1/2 of the $2.5 million pledge), was chosen. The challenge took place during the major gift phase from January 1 until the public launch of the campaign on March 3.

An overview of the challenge was developed and presented to the Campaign Co-chairs and the Senior Pastor for approval. The donors were then briefed and also approved of the church moving forward with the challenge.

A two-page challenge flyer was developed as a supplement to the solicitation material being used by the Major Gift Committee, the team of church members recruited to solicit gifts of $25,000 and above. The Kirkland Challenge was announced at the major gift committee training in early January and volunteers were briefed on how to present this opportunity to the church members they were assigned to visit. Talking points included: 

• A unique opportunity to triple the impact of their gift ($25,000 pledge + $50,000 match = $75,000 worth of impact).
• A limited window in which to participate – before March 8, prior to the public announcement.
• An important mechanism to raise the sights of members.

Progress was continually tracked, with each committee meeting and action memo offering an update on the challenge, including reminders on how to use the challenge to motivate donors.

Impact

The challenge was a tremendous success. During the seven weeks of the challenge, the church received 36 commitments totaling $1,260,000, and an average gift of $36,000.  

Further, it had positive impacts on all involved. The volunteer committee embraced the challenge because it offered them an additional talking point when speaking with prospective donors. The challenge not only allowed the campaign to raise additional funds, but it also motivated donors and volunteers to adhere to the prescribed timeline; motivating the campaign to remain on track. Donors were provided with a strong incentive to elevate their level of support to meet the challenge.

Lastly, the challenge was a unique way to steward a donor critically important to the church by further involving the donor in the campaign in a way that elevated the value of a historic gift to the campaign.

Key Takeaways

Challenge grants are the ultimate endorsement of your initiative, as they validate your vision, confirm the case, heighten philanthropy, motivate leaders, and drive energy. 

Some guidelines to follow when formulating your next challenge grant are:

1. Identify a qualified prospect for whom a challenge would resonate.
2. Determine the parameters based on your needs.
3. Solicit the donor positioning the challenge as a central aspect of the gift.
4. Secure the donor’s buy-in. Demonstrate the impact both on the campaign and the organization. Share the vision for the campaign with the donor so that they understand how the challenge fits in.
5. Develop a plan to implement the challenge. The plan should include a timetable, promotional material, and talking points.
6. Promote and track the challenge’s progress.

A successful campaign requires momentum. It is the result of dynamic leadership, and inspiring, pace-setting generosity. Challenge grants are an excellent way to leverage the former to inspire the latter and set your next campaign on the right path.