Matching Gift & Challenge Gift Initiatives
Matching Gift & Challenge Gift Initiatives Aaron Escobar, OSU Foundation Steve Hettinga, University of Washington
If you remember nothing else… • Leverage, leverage, leverage • Think outside the box for how you can establish matching/challenge gift dollars • They can serve as a powerful campaign strategy for achieving thematic goals or emerging priorities • Have a plan, work your plan
Today’s Topics • Seek to understand the differences between matching and challenge gifts • Study UW/OSU cases utilizing both matching and challenge gifts and learn from our lessons • Recommendations to take home • Questions
Why study matching & challenge gift programs? • Matching and challenge gift initiatives have potential implications for institutions in the design and implementation of fundraising campaigns • They create urgency and offer institutions incredible leverage in these important discussions • Raise donor sights and engage faculty in new ways
What’s the difference? • A matching gift is a commitment by a donor, or a set of donors, to provide an ongoing, yet limited sum of money to match additional donor commitments • A challenge gift is a commitment by a donor, or set of donors, to provide a given sum of money to the cause upon successful completion of a fundraising goal
Overview of Matching Gift Programs at UW
Leveraging Donor Dollars During the last two decades, various UW matching and challenge gift initiatives have teamed with donor dollars to generate $260+ million in support of capital projects, scholarship, teaching, training, and research
State Matching Gift Initiative Match: 1:1 Purpose: Leverage public/private dollars in support of recruiting top faculty and graduate students
Policy: Open to all Washington State fouryear public institutions Source of Funds: State appropriated funds through the Higher Education Coordinating Board
Lessons Learned Positive Outcomes: Engaged key stakeholders, provided leverage Challenges: Lack of UW control
Students First Initiative Match: 2:1 • Purpose: Support endowment gifts for scholarships and fellowships • Policy: Need-based, establishing or supporting undergraduate scholarships or graduate fellowships. Follows a student for all four years (or two years) of their education • Source of Funds: Various UW-based funding sources
Lessons Learned Positive Outcomes • Leveraged gifts for popular cause as well as existing resources for additional donor dollars • Raised more than $112.5M in gift and matching funds for UW units • Good use of existing UW dollars Challenges • We can’t assume that UW will have similar revenue streams available to Advancement in the future
Faculty Staff Retiree Campaign Match: 1:1 • Purpose: Faculty, staff, or retiree campaign participation; endowment gifts for scholarships and fellowships or other endowment funds that provide direct support to students (e.g. study abroad support, etc.) • Source of Funds: UW-based funds
Lessons Learned Positive Outcomes • A great boost mid-campaign • Empowered development staff to reach out to a broader constituency • Good catalyst for specific, already-affiliated, donor pool – great population to target • Created endowed gift naming opportunity for faculty and staff Challenges • Difficult for administrators to manage and execute • Stewardship
Research tells us that when the match offer increases, both the revenue per solicitation and the response rate increases However, large match ratios (i.e., $3:$1 and $2:$1) relative to a smaller match ratio have no additional impact on giving* *Does Price Matter in Charitable Giving? Evidence from a Large-Scale Natural Field Experiment, Dean Karlan and John A. List
Program Examples at Oregon State
The Campaign for OSU launched in July 2004; thematic progress six years into campaign: Facilities & Equipment Programmatic Support Scholarships & Fellowships Private Grants Faculty Support
106% 96% 90% 86% 58%
OSU Foundation Leadership and OSU Provost implement the Provost’s Faculty Match Initiative (PFM) – a strategy to sustain campaign momentum and increase major gift support for a key campaign and institutional priority
OSU Provost Faculty Match Program Summary Goal • To recruit and retain world-class faculty through the strategic use of endowed positions Program Mechanics • The program is funded by the OSU Provost’s Office at $1,000,000 a year for five years, with the institutional investment totaling $5 million over the course of the program • As part of the university’s endowment, these donors’ investments will support the most exceptional faculty for generations to come. (Provost approves all gifts) • Program was managed by a Sr. Director of Development
The Opportunity Matching Amounts Donor Commitment $2,000,000+ $1,000,000 - $1,999,999 $500,000 - $999,999 $250,000 - $499,999
Provost’s Match $90,000 yr for 5 yrs $45,000 yr for 5 yrs $22,500 yr for 5 yrs $12,500 yr for 5 yrs
PFM Timeline May 1, 2010 - August 31, 2011
PFM Results Established, or added to, 23 different endowed faculty support funds, and raised more than $21.3M It was so successful that OSU’s Provost in consultation with OSU Foundation leadership decided to fund a second round of the program The PFM II established, or added to, an additional 17 endowed faculty support funds, and raised more than $12.3M Combined, the two matching programs supported 30 endowed faculty support funds, and raised $33.6M • •
Endowed Deans Position in College of Forestry: $5M Largest Faculty Endowments in College of Engineering: $3.5M
Impact on The Campaign for OSU Following the Provost’s Faculty Match initiatives, faculty support has the second highest percentage toward goal met within The Campaign for OSU Facilities & Equipment Programmatic Support Scholarships & Fellowships Private Grants Faculty Support As of November 30, 2013
106% 91% 92% 95% 105%
Lessons Learned • Clarify how to handle gifts that are larger than your totals and what amount they qualify for • Make sure your organization has an understanding for how they want to handle unrestricted estate gifts • Be flexible in allowing donors to pool money to create positions • Make sure your academic partners know about the mechanics of the program - they turn into incredible sales people
Transforming the College of Business: Austin Hall In 2010 the College of Business successfully secured two lead gifts to launch the construction of Austin Hall – $6M family gift was negotiated to be $2M outright an additional $4M that would be a match – Access to the match would be for gifts up to $500K – Donor wanted to inspire large commitments at the early stages of the fundraising
Austin Hall Match: Results Description of Donor
$ Value
$ Qualify for Match
Largest gift to OSU, other leadership gifts to $1M priority capital projects ensued
$500K
Largest gift to OSU – fast track to trustee membership
$1M
$500K
Largest gift to OSU
$1M
$500K
First contribution to OSU
$500K
$500K
Loyalty gift
$500K
$500K
First gift to the college
$300K
$300K
Largest gift to OSU
$250K
$250K
Largest gift to OSU
$250K
$250K
Largest gift to OSU
$250K
$250K
First gift to OSU
$225K
$225K
First gift to the college
$100K
$100K
Largest gift to OSU
$50K
$50K
9 gifts @ 25K
$225K
$225K
TOTAL
$5,650,000
$4,150,000
Arts Cornerstone Challenge In 2013, an anonymous donor made the largest private investment in the arts in OSU’s history: a $5 million commitment including a $1 million challenge component – Donor challenged 1:1 ANY major gift to the newly reorganized School of Arts and Communications – Donor wanted to increase the base of support from a broad group of contributors to the College of Liberal Arts – fear of being the lone contributor to the effort – Donor wanted to build a pipeline of other major gift contributors in the future
The Results • 26 new major gifts resulted in $1,001,000 over a 10 month span • CLA delivered monthly updates on progress to the donor - met with excitement and led to discussions on the conversations • Engaged faculty members in development for the first time, assisted with relationship building, brought new energy • Created an all-hands-on-deck moment for CLA • Taught CLA the value in priority setting and how that impacts fundraising
Summary • Matching and challenge gift initiatives come in many flavors; think outside the box • They leverage existing and potential funding from a number of sources • Matching and challenge gift programs bring energy, incentive, and urgency to any campaign. They are a powerful campaign strategy
10 Take-Aways for Success 1. Review and communicate plans with stakeholders, including: – Gift processing – Stewardship office – Finance and Administration (internal department or central services) – Treasury office – Departmental administrator representative
10 Take-Aways for Success 2. Assess possible naming opportunities for endowment, facilities, etc. Equal named fund recognition for matching gift provider and partnering donor, i.e. the HettingaEscobar Endowment for Art and Engineering
10 Take-Aways for Success 3. For smaller endowments, pooled funds established with like purposes equal a more focused distribution, greater impact, more leverage for departments, and valuable flexibility
10 Take-Aways for Success 4. Create a timeline that generates incentive and a sense of urgency – encourage donors to get off the fence 5. Dedicate one staff member’s time to manage the matching and challenge gift funding programs
10 Take-Aways for Success 6. State/Provincial matching gift programs/initiatives should be structured by the biennial budget so as not to overcommit and disappoint donors 7. For centrally-managed match/challenge programs, look to unconventional partners in helping identify possible sources of State/Provincial revenue that could be used
10 Take-Aways for Success 8. Consider providing a matching at various levels 9.Soliciting principal gift-level dollars and pooling them to use for an institutional match is difficult and hard to steward long-term. Focus on individuals and their affinity
10 Take-Aways for Success 10. Leverage, leverage, leverage Think outside the box for how you can establish and utilize matching and challenge gift dollars They can serve as a powerful campaign strategy for achieving thematic goals or emerging priorities Have a plan, work your plan
Questions
Aaron Escobar Sr. Director of Development OSU Foundation [email protected]
Steve Hettinga Associate Director, Principal Giving University of Washington [email protected]
If you remember nothing else… • Leverage, leverage, leverage • Think outside the box for how you can establish matching/challenge gift dollars • They can serve as a powerful campaign strategy for achieving thematic goals or emerging priorities • Have a plan, work your plan
Today’s Topics • Seek to understand the differences between matching and challenge gifts • Study UW/OSU cases utilizing both matching and challenge gifts and learn from our lessons • Recommendations to take home • Questions
Why study matching & challenge gift programs? • Matching and challenge gift initiatives have potential implications for institutions in the design and implementation of fundraising campaigns • They create urgency and offer institutions incredible leverage in these important discussions • Raise donor sights and engage faculty in new ways
What’s the difference? • A matching gift is a commitment by a donor, or a set of donors, to provide an ongoing, yet limited sum of money to match additional donor commitments • A challenge gift is a commitment by a donor, or set of donors, to provide a given sum of money to the cause upon successful completion of a fundraising goal
Overview of Matching Gift Programs at UW
Leveraging Donor Dollars During the last two decades, various UW matching and challenge gift initiatives have teamed with donor dollars to generate $260+ million in support of capital projects, scholarship, teaching, training, and research
State Matching Gift Initiative Match: 1:1 Purpose: Leverage public/private dollars in support of recruiting top faculty and graduate students
Policy: Open to all Washington State fouryear public institutions Source of Funds: State appropriated funds through the Higher Education Coordinating Board
Lessons Learned Positive Outcomes: Engaged key stakeholders, provided leverage Challenges: Lack of UW control
Students First Initiative Match: 2:1 • Purpose: Support endowment gifts for scholarships and fellowships • Policy: Need-based, establishing or supporting undergraduate scholarships or graduate fellowships. Follows a student for all four years (or two years) of their education • Source of Funds: Various UW-based funding sources
Lessons Learned Positive Outcomes • Leveraged gifts for popular cause as well as existing resources for additional donor dollars • Raised more than $112.5M in gift and matching funds for UW units • Good use of existing UW dollars Challenges • We can’t assume that UW will have similar revenue streams available to Advancement in the future
Faculty Staff Retiree Campaign Match: 1:1 • Purpose: Faculty, staff, or retiree campaign participation; endowment gifts for scholarships and fellowships or other endowment funds that provide direct support to students (e.g. study abroad support, etc.) • Source of Funds: UW-based funds
Lessons Learned Positive Outcomes • A great boost mid-campaign • Empowered development staff to reach out to a broader constituency • Good catalyst for specific, already-affiliated, donor pool – great population to target • Created endowed gift naming opportunity for faculty and staff Challenges • Difficult for administrators to manage and execute • Stewardship
Research tells us that when the match offer increases, both the revenue per solicitation and the response rate increases However, large match ratios (i.e., $3:$1 and $2:$1) relative to a smaller match ratio have no additional impact on giving* *Does Price Matter in Charitable Giving? Evidence from a Large-Scale Natural Field Experiment, Dean Karlan and John A. List
Program Examples at Oregon State
The Campaign for OSU launched in July 2004; thematic progress six years into campaign: Facilities & Equipment Programmatic Support Scholarships & Fellowships Private Grants Faculty Support
106% 96% 90% 86% 58%
OSU Foundation Leadership and OSU Provost implement the Provost’s Faculty Match Initiative (PFM) – a strategy to sustain campaign momentum and increase major gift support for a key campaign and institutional priority
OSU Provost Faculty Match Program Summary Goal • To recruit and retain world-class faculty through the strategic use of endowed positions Program Mechanics • The program is funded by the OSU Provost’s Office at $1,000,000 a year for five years, with the institutional investment totaling $5 million over the course of the program • As part of the university’s endowment, these donors’ investments will support the most exceptional faculty for generations to come. (Provost approves all gifts) • Program was managed by a Sr. Director of Development
The Opportunity Matching Amounts Donor Commitment $2,000,000+ $1,000,000 - $1,999,999 $500,000 - $999,999 $250,000 - $499,999
Provost’s Match $90,000 yr for 5 yrs $45,000 yr for 5 yrs $22,500 yr for 5 yrs $12,500 yr for 5 yrs
PFM Timeline May 1, 2010 - August 31, 2011
PFM Results Established, or added to, 23 different endowed faculty support funds, and raised more than $21.3M It was so successful that OSU’s Provost in consultation with OSU Foundation leadership decided to fund a second round of the program The PFM II established, or added to, an additional 17 endowed faculty support funds, and raised more than $12.3M Combined, the two matching programs supported 30 endowed faculty support funds, and raised $33.6M • •
Endowed Deans Position in College of Forestry: $5M Largest Faculty Endowments in College of Engineering: $3.5M
Impact on The Campaign for OSU Following the Provost’s Faculty Match initiatives, faculty support has the second highest percentage toward goal met within The Campaign for OSU Facilities & Equipment Programmatic Support Scholarships & Fellowships Private Grants Faculty Support As of November 30, 2013
106% 91% 92% 95% 105%
Lessons Learned • Clarify how to handle gifts that are larger than your totals and what amount they qualify for • Make sure your organization has an understanding for how they want to handle unrestricted estate gifts • Be flexible in allowing donors to pool money to create positions • Make sure your academic partners know about the mechanics of the program - they turn into incredible sales people
Transforming the College of Business: Austin Hall In 2010 the College of Business successfully secured two lead gifts to launch the construction of Austin Hall – $6M family gift was negotiated to be $2M outright an additional $4M that would be a match – Access to the match would be for gifts up to $500K – Donor wanted to inspire large commitments at the early stages of the fundraising
Austin Hall Match: Results Description of Donor
$ Value
$ Qualify for Match
Largest gift to OSU, other leadership gifts to $1M priority capital projects ensued
$500K
Largest gift to OSU – fast track to trustee membership
$1M
$500K
Largest gift to OSU
$1M
$500K
First contribution to OSU
$500K
$500K
Loyalty gift
$500K
$500K
First gift to the college
$300K
$300K
Largest gift to OSU
$250K
$250K
Largest gift to OSU
$250K
$250K
Largest gift to OSU
$250K
$250K
First gift to OSU
$225K
$225K
First gift to the college
$100K
$100K
Largest gift to OSU
$50K
$50K
9 gifts @ 25K
$225K
$225K
TOTAL
$5,650,000
$4,150,000
Arts Cornerstone Challenge In 2013, an anonymous donor made the largest private investment in the arts in OSU’s history: a $5 million commitment including a $1 million challenge component – Donor challenged 1:1 ANY major gift to the newly reorganized School of Arts and Communications – Donor wanted to increase the base of support from a broad group of contributors to the College of Liberal Arts – fear of being the lone contributor to the effort – Donor wanted to build a pipeline of other major gift contributors in the future
The Results • 26 new major gifts resulted in $1,001,000 over a 10 month span • CLA delivered monthly updates on progress to the donor - met with excitement and led to discussions on the conversations • Engaged faculty members in development for the first time, assisted with relationship building, brought new energy • Created an all-hands-on-deck moment for CLA • Taught CLA the value in priority setting and how that impacts fundraising
Summary • Matching and challenge gift initiatives come in many flavors; think outside the box • They leverage existing and potential funding from a number of sources • Matching and challenge gift programs bring energy, incentive, and urgency to any campaign. They are a powerful campaign strategy
10 Take-Aways for Success 1. Review and communicate plans with stakeholders, including: – Gift processing – Stewardship office – Finance and Administration (internal department or central services) – Treasury office – Departmental administrator representative
10 Take-Aways for Success 2. Assess possible naming opportunities for endowment, facilities, etc. Equal named fund recognition for matching gift provider and partnering donor, i.e. the HettingaEscobar Endowment for Art and Engineering
10 Take-Aways for Success 3. For smaller endowments, pooled funds established with like purposes equal a more focused distribution, greater impact, more leverage for departments, and valuable flexibility
10 Take-Aways for Success 4. Create a timeline that generates incentive and a sense of urgency – encourage donors to get off the fence 5. Dedicate one staff member’s time to manage the matching and challenge gift funding programs
10 Take-Aways for Success 6. State/Provincial matching gift programs/initiatives should be structured by the biennial budget so as not to overcommit and disappoint donors 7. For centrally-managed match/challenge programs, look to unconventional partners in helping identify possible sources of State/Provincial revenue that could be used
10 Take-Aways for Success 8. Consider providing a matching at various levels 9.Soliciting principal gift-level dollars and pooling them to use for an institutional match is difficult and hard to steward long-term. Focus on individuals and their affinity
10 Take-Aways for Success 10. Leverage, leverage, leverage Think outside the box for how you can establish and utilize matching and challenge gift dollars They can serve as a powerful campaign strategy for achieving thematic goals or emerging priorities Have a plan, work your plan
Questions
Aaron Escobar Sr. Director of Development OSU Foundation [email protected]
Steve Hettinga Associate Director, Principal Giving University of Washington [email protected]
