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.


Working with Marshal Whittey at First Nonprofit has been a great experience. He handles our request as a priority and goes above and beyond to resolve any issues we have in a timely manner. Marshall follows through to the end and ensures our needs are met. He has been a great resource for LSC and our “go to” for any tax questions we may have. With LSC transitioning several facilities into one federal tax identification number, First Nonprofit was able to assist and provide guidance with best practices resolving claims to each entity. Additionally First Nonprofit provided knowledge (information materials) and one on one training to HRS group with best practices to handle claims state adjudicated, fraudulent claims, and appeals. And processing information in the First Nonprofit [unemployment claims] system allows for timely information can be collected.

Lutheran Services Carolinas, Salisbury, NC

My experience with FNP has been wonderful. Unemployment in general is quite confusing and FNP has simplified the process for us. Everyone we have reached out to or worked with has been very helpful and follows up to be sure we understand the information. I am so happy we made the switch to FNP!

Stone Valley Community Charter School, Huntingdon, PA

First Nonprofit smoothed the unemployment perils for our organization during Covid. Without the ability to cap our UI exposure, we would not have been able to weather the storm. The program worked perfectly and we have come out of the pandemic ready to forge on. Thanks FNP!

Jewish Silicon Valley, Los Gatos, CA

My experience with the FNP has been fantastic. The idea of setting funds aside for the unemployment tax liability is a bedrock for nonprofit organizations like mine, namely ASHBA; what is even more advantageous is having the FNP as a custodian of those funds. 100% recommended!

American Saddlebred Horse & Breeders Association, Inc., Lexington, KY

I would like to comment on my experience with FNP….to date our District has saved $1,000’s of dollars by being enrolled in the First Nonprofit program. My only regret is that we did not know about this method of paying unemployment tax years ago….as I had figured about five years

ago, had we enrolled 15-20 years ago, we could have saved our small school district upwards of $500,000 in payments to IDES. Also we would have had a pretty hefty sum of money in our Reserve Account. Thankfully I attended a workshop hosted by First Nonprofit back in 2015 which got the ball rolling!

Beardstown Community Unit School District 15, Beardstown, IL

I have worked with the First Non-Profit Team for many years, and I appreciate the quick response and care that Cecilia and the team provides anytime I have questions. While there are other providers that may provide like services, First Nonprofit will always be my first choice! I appreciate you!

Innovative Services, Inc., Green Bay, WI

First Nonprofit has been easy to work with and makes the administrative process easier and smoother. We enjoy working with you.

Visually Impaired Preschool Services, Louisville, KY

Luckily for us, our interactions regarding any issues with staffing has been very minimal! I can say that all other interactions with regards to billing, 941 reporting, etc. have been extremely pleasant, accommodating and easy to work with. Kim Ghanayem is always prompt, professional and friendly. Thank you so much!

Neurologic Music Therapy Services of Arizona, Phoenix, AZ