A challenge grant is a commitment made by a grant making organization to donate a set number of funds to a nonprofit or educational institution once that grantee has raised a certain amount of money as specified by the challenge.
They provide an excellent revenue opportunity for nonprofits.
If your organization is interested in applying for one and pursuing the opportunity, you’re in the right place.
Use the advice below as a road map for securing a challenge grant and successfully reaching the fundraising bar set by your grant’s parameters.
Like with any fundraising effort, obtaining a challenge grant takes proper planning and preparation. They should be treated like contingency offers. There’s an inherent risk, but also a great possible reward on the other side of things.
One of the more tedious aspects of grant seeking is the writing of grant proposals. However, the good thing about a challenge grant proposal is it forces your nonprofit to explicitly design its strategy for attaining the grant. The boy scouts are definitely onto something with their “always prepared” motto.
In order to properly plan for a challenge grant a nonprofit or educational institution has to look forward. Assessing and predicting future organizational behavior and needs is crucial. Think through what your nonprofit needs six, nine, twelve, eighteen months out. Work backwards to plan out the steps you’ll need to take.
Questions to Ask During the Challenge Grant Application and Appeal Process
#1: What is our nonprofit’s current and/or standard approach to fundraising?
By asking this question, you are determining if a challenge grant is worth it for your nonprofit or educational institution. Think through how your organization traditionally fundraises. What methods are you using to reach your financial aims?
Do you use any of the following fundraising strategies?
- annual fund campaigns
- matching gifts
- major giving programs
- monthly donor programs
- special events
- and more
For each of these various strategies what methods do you employ to bring in the most donations possible?
- direct mail
There are a multitude of options and combinations of fundraising methods and strategies. Consider where a challenge grant fits among your preexisting system.
#2: What do my donor and prospect pools look like?
Take a tally of who your current donors are. What traits characterize them? What types of donors are you missing from your donor pool that you think would be a good organizational fit?
Think through how a challenge grant could tap into prospect groups you hadn’t previously been able to reach.
#3: What upcoming events will pair well with challenge grant promotions?
Like the right cheese and a good wine, the perfect pairing of event and challenge grant can help your efforts convert into reaching the grant’s required funds raised threshold. When thinking through what scheduled campaigns and events would be helpful in securing a challenge grant, remember the application process timeline.
Grant submission instructions and guidelines will typically outline a process timeline. If the challenge grant appeal takes five months and you have an event in four months that you want to use the challenge grant to encourage increased donations for, that plan won’t work.
Your answers to those questions are going to steer your challenge grant planning.
After the approval of your challenge grant appeal, you’ll be set to start the work of actually bringing in enough funds to fulfill the grant requirements.
Use the overarching goal of reaching that match threshold to encourage donations from your supporters.
As a general best practice, it is a good idea to consider offering some kind of special gift for those who upgrade or newly join in to help you reach your goal.
Techniques to Cast a Wide Net and Ensure That Your Nonprofit Doesn’t Miss the Challenge Grant Match Mark.
With matching gifts, the biggest obstacle between your nonprofit and receiving a matching gift is how little most employees know about the corporate giving opportunities available to them.
Raising awareness of your challenge grant is of the utmost importance as well. These grants are great for donation incentives, but the encouragement only works if donors know what is happening.
For promotion, you’ll want to:
- incorporate your challenge grant information into your communications
- get your board involved
- target certain donor segments
Let’s look at these promotional strategies one at a time.
#1: Incorporate Your Challenge Grant Information Into Your Communications
Information regarding your nonprofit’s challenge grant and its implications in your fundraising budget should be incorporated into your various communication channels.
Take a similar approach to what you would do for matching gift marketing. Dedicate some space on your web page to informing visitors of how the grant works and what the funds will accomplish. Mention the grant as part of your asks to encourage donations. The knowledge that even more can come from your funds can be just the nudge a prospect needs to become a donor or a donor needs to contribute a little more than was predicted.
Add challenge grant details to your emails, newsletters, direct mail, social media, and phone calls. Get creative with how you’re promoting the opportunity. For example, your staff could have a challenge grant call to action as part of their email signatures.
Here is an example challenge grant letter:
The goal is to saturate the market with your challenge grant marketing.
#2: Get Your Board Involved
Your board is one of your biggest assets. Have them lead a fundraising charge. Their social and business networks are invaluable resources for the development of your nonprofit. Much of fundraising is about who you know, and board members tend to know a lot of people. This is a great chance to expand your donor pool by bringing new donors into the fold.
Some challenge grant guidelines even stipulate that funds have to be from new donors, so if you’re in that situation make sure you’re looking to the valuable resource you have in your board.
#3: Target Certain Donor Segments
Sometimes it can really help overall results to focus in on certain segments. It is a lowering of quantity to upgrade the quality of the asks you can make. If you have a massive list of donors in your database, you need to be able to prioritize and target those you think will be most receptive to the challenge grant incentive and are most in need of increased attention from your fundraisers.
Examples of segments to target are:
- major donors
- major donor candidates
- lapsed donors
The segment possibilities are endless. Decide what would work best for your organization.
Challenge grants will not simply fall into your nonprofit’s lap. They take research and planning to find, effort to get approved, and strategy and skill to successfully secure. Challenge is in the name for a reason. However, with the right approach, your grant seeking should go smoothly. And once your nonprofit has its newly matched funds, waiting to help serve your mission, all the work will certainly be worth it.