The rewards of challenge grants

In early December, an article in the Boulder Daily Camera reported that in a competition among 50 animal shelters across the United States to get the greatest number of homeless pets adopted within a three-month period, the Humane Society of Boulder Valley led the pack, and subsequently won a $100,000 challenge grant from the American Society for the Prevention of Cruelty to Animals. Strategies used by the shelter for boosting adoption rates included special promotions such as free adoption days and encouragement of multiple adoptions by a given individual or family. This was a win-win situation for both the recipient and the funder: the recipient received a sizable cash grant and positive publicity, while the funder achieved measurable impact by more effectively reducing the number of homeless pets.

Challenge grants take a variety of forms, ranging from achieving a specific programmatic objective defined by the funder (as was the case in this instance) to the more typical requirement of raising a sum of money equal to the challenge grant amount by a given deadline as a condition of receiving the grant, otherwise known as a matching grant. (March 2, 2011 update: Helpful examples of matching grants and strategies for pursuing them effectively can be found in the Animal Shelter Tips “Ideas for Setting Up Matching Grants” blog post.)

There are some in the fundraising field who may wonder why one would bother pursuing a grant that wouldn’t be awarded unless certain conditions were met when there are many opportunities to receive grants outright (assuming that the nature and work of the applicant organization are in direct alignment with the funder’s stated interests).

The short answer to this question is that challenge grants position an organization to raise more money over the long term than it might otherwise.

The time limitation and specific goal of a challenge grant lends a sense of urgency to an organization’s fundraising efforts that might otherwise be lacking in an open-ended appeal. If targeted recipients of a fundraising request are leaning favorably toward the applicant organization but are uncommitted to taking immediate action, the knowledge that their contribution will be matched by a third party if it is received by a certain deadline may provide them with the necessary incentive to give sooner rather than later, and to give more generously knowing that their contribution will help to leverage additional support. The donor then has the double satisfaction of having made its own contribution and having helped the benefitting organization to meet the conditions of receiving additional support from a meaningful source.

In the bigger picture, challenge grants provide an avenue for forging new and/or deeper relationships within the funding community by having the recipient organization’s efforts recognized and endorsed by another donor. This recognition and endorsement places grantseeking organizations in a position of greater strength when approaching prospective supporters, and can help lay the groundwork for fruitful conversations and engagement opportunities. If the challenge grant helps to attract new resources (whether in the form of monetary support, helpful guidance, or meaningful collaborations) to a given organization’s cause, those resource providers and partnes may continue to show a high level of interest in the organization’s ongoing efforts long after the grant has been awarded, provided that the relationships are nurtured accordingly.

To get the most mileage out of a challenge grant, it is important to develop a communications plan to spread the word as early and as widely as possible—use every publicity vehicle available to your organization to promote it, including your Web site, blog, Twitter feed, Facebook profile, etc. After verifying that the data in your mailing lists (whether print or e-mail) is up-to-date, issue a special press release. Mention the challenge grant in every request you send out, both well in advance of and during the challenge period. Create a promotional video and post it to YouTube. And make sure that any staff members within your organization who are regularly interacting with its constituents are armed with the necessary details of the challenge grant (the challenge goal, who issued it, and by when the conditions must be met) so that they can get the word out as well.

Ideally, a challenge grant is a gift that keeps on giving by helping the recipient organization to expand its community of ongoing supporters and partners.

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