Challenge Grants: A Mechanism for Double and Lasting Value

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May 30, 2014; Time Warner Cable News (Binghamton, N.Y.)

We know there’s nothing revolutionary about the matching grant, but reading these very brief news briefs it struck us once again what a brilliant tool it is. This article talks about its use in response to a flood in upstate New York where businesses and residents suffered losses.

The Yates Community Endowment’s Disaster Relief Fund has been the recipient of two challenge grants from the Nord Family Foundation and an anonymous donor. Each of these will double themselves in the moment, but they provide much more in terms of so-called lifetime value in that those who are encouraged to contribute through being able to double their donation will be identified as potential donors for the future.

Meanwhile In Illinois, HELP Legal Assistance of Davenport has received a $60,000 challenge grant from the Marie H. Bechtel Charitable Trust over a three-year period while the Hubbell-Waterman Foundation also awarded a challenge grant to HELP of $30,000 over the next two-year period. Legal services across the country have suffered from reduced funding since the start of the recession when, coincidentally, the need for their services became more acute. These grants and the matching contributions will assist HELP in serving clients with legal issues around safety, housing, and adequacy of income.

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And in Wisconsin, the Milwaukee Repertory Theater has been awarded a $500,000 challenge grant by the Windhover Foundation to repair its 115-year-old building which is sinking. If matched the challenge will raise $1 million of the $1.75 million needed.

It seems to us that if big philanthropy really is so hell-bent on improving the effectiveness and scale of philanthropy in this country, this is a very simple way to do it.

NPQ would love to hear from readers about their uses of challenge grants or other similarly productive incentives to giving.—Ruth McCambridge