Incorporating challenge grants into fundraising efforts

June 23, 2014

Incorporating challenge grants into fundraising efforts

An effective fundraising strategy helps nonprofit groups raise the money they need to not only continue current operations, but begin new initiatives and expand the scope of their missions as well. The growth of digital giving has placed much of the discussion of attracting contributors around optimizing websites and creating easy paths to online donations. Charitable groups need to consider all their options, however, to make sure that a potentially strong donation channel isn't being overlooked. One such area, challenge and matching grants, can help some organizations create a significant, long-term boost to specific campaigns as well as general giving.

While challenge grants carry the risk of not being met by donations from other sources, they can also serve as an incredibly useful method for creating a sense of healthy competition and attracting the attention of new and returning contributors. Matching grants can be approached in a similar fashion, by highlighting the fact that any amount given will be doubled by the grant. Nonprofit Quarterly points out the value of these grants are two-fold: they create a great environment for encouraging gifts and help identify new donors for future outreach efforts.

Finding challenge and matching grant providers
Identifying businesses and foundations, and even individuals, to commit to a matching grant can be difficult. Nonprofits need sufficient funds in place, as these contributions are often at the five- or six-figure level, and the potential donor needs to feel some connection to the overall mission or specific campaign. suggests drawing on the higher-level connections of the board of trustees or directors to find qualified prospects. This approach will also make it easier down the line to convince the board to accept such a gift, especially with challenge grants where the contribution isn't guaranteed.

When trying to convince a prospect that a challenge or matching grant is better than a regular contribution, the person or group pitching the idea need to take time to explain the effects outlined above. If a donor is used to making regular contributions, or is uneasy about the idea of using a challenge grant because the donation isn't guaranteed, then care should be taken to explain the positive influence that this approach has on overall efforts.

Content presented by First Nonprofit Group, the leading provider of state unemployment insurance solutions for 501(c)(3) nonprofit employers.


Ready to chat?
Get in touch today to request a no-obligation savings evaluation.


First Nonprofit has saved us so much money over the state’s program. We had one little glitch with the state recently and we contacted FNP immediately. FNP staff called us back immediately and moved to remedy the problem.

WI Council of Religious & Independent Schools (WCRIS), Madison, WI

First Nonprofit has been a great partner. They have helped us saved hundreds of thousands of dollars! They have awesome resources for our nonprofit organization. Thanks for the partnership.

Community Care Inc., Milwaukee, WI

Life is certainly busy these days but having business partners like First Nonprofit has made some of the process hassle free. We have worked with this team for years. When we changed payroll systems, they outlined every step. I think this team is terrific and I know they get the job done! Thank you, Cruz, to all the team at FNP.

Gulfside Healthcare Services, New Port Richey, FL

FNP has helped our agency to save thousands of dollars every year on our unemployment coverage. The service is phenomenal, and we are thankful to their team as our partner. My experience working with Marshall on the advocacy around UE for nonprofits was also a highlight as someone who teaches advocacy and lobbying for nonprofits. Really, your whole team is top shelf, so thank YOU!

Advancing Academics, Turtle Creek, PA

Chicago Children’s Theatre has greatly benefited from our partnership with First Nonprofit, and I have always enjoyed working with the staff on our filings and any complicated questions. I would not hesitate to recommend First Nonprofit to fellow nonprofits. We’re very happy customers.

Chicago Children’s Theatre, Chicago, IL

FNP is a great resource for Daniel Kids. To have a TPA that we can count on to take point on not only managing our unemployment claims, but to support and guide any protest hearing, is invaluable. All the professional support staff we have worked with have been excellent, very knowledgeable and responsive. We are grateful for the help and support, thank you.

Daniel Kids, Jacksonville, FL

When I first began in my position at my organization, I hadn’t had experience working with a company like FNP. The staff was so patient and helpful in helping to explain the benefits of First Nonprofit. Anytime I reach out with a question I receive a quick, clear, and thorough response. I’m so thankful that we decided to partner with FNP. Their excellence in customer service, coupled with their variety of packages frees us up to truly serve our staff and community with a peace of mind knowing that our organization is protected against unanticipated unemployment insurance expenses.

Homes of Hope, Chicago, IL

First Nonprofit gets an A+ in my book. You are so easy to work with & very knowledgeable! Whether it is my quarterly correspondence with Kim or my random interactions with Dawn about a bond … I am so pleased that I get to work with such a helpful company. Thank you!

Women's Choice Network, Pittsburgh, PA