As More Charities Promote Matching Gifts, Donors Grow Skeptical of Campaign Pleas

If the summertime mailing is fundraising’s weak tea, the matching solicitation is its double espresso.

Wealthy patrons’ pledges to match gifts from others donors do seem to spur contributions and often help nonprofits raise larger sums. But because charities are so eager to call just about any giving opportunity a match or a challenge, the campaigns are starting to leave donors skeptical, say fundraising experts.

“In the tough economy, more nonprofits are out there with matches, and they’ve become a lot less credible,” says Alia McKee, principal at Sea Change Strategies, a fundraising and marketing firm. In focus groups with donors, she says, “we’ve heard a lot of folks question the legitimacy of matches.”

All Kinds of Appeals

The tradition gained traction in the 1950s when some big companies offered to match their employees’ charitable contributions. At the time, they had a very clear definition, says Andrea McManus, president of the Development Group, a fundraising consultancy in Calgary. No longer.

The notion of a donor’s money going further thanks to someone else’s gift has spread to all kinds of appeals. But nobody has set standards for what constitutes a true matching gift.

Some fundraisers consider matches to be gifts that require the charity to raise additional money, while challenges are contributions donors make regardless of whether others give.

But the terms are often used interchangeably. And even with matches, the charity often receives the full amount of the donor’s promised contribution, whether or not it reaches the goal. In many cases, nonprofits don’t even clarify with a donor in advance of a campaign whether a gift is conditional.

All sorts of fundraising opportunities try to capitalize on donors’ desire for their giving to go further and produce bigger results for the causes they care about.

Take, for example, an e-mail solicitation last month from Mercy Corps. The aid group doesn’t call the solicitation a match, but its language plays off the idea of magnifying a gift’s impact.

“There are just two days left,” reads the e-mail, whose subject line reads, “DEADLINE TOMORROW: What we can do.”

“Every dollar you give today will provide six times as much help for the families who need it most,” it says. “And thanks to donated supplies and grants, Mercy Corps makes the most of every dollar—so your $20 becomes $120, $75 becomes $450, and even more mothers can feed their children.”

The supporter’s $20 becomes $120 in this case not because a big donor has promised to give five dollars for every dollar Mercy Corp raises but because money from individuals makes up one-sixth of the group’s annual budget. The rest comes from foundations, governments, and noncash goods.

So a gift of $20, says Julie Hambuchen, senior director of interactive and direct marketing, goes six times as far because of other contributions.

But there is no relationship between how much the charity raises from individuals and how much it gets from other sources.

The fast-approaching deadline, meanwhile, is meant to create excitement about giving; Mercy Corps recognizes that simply sharing its big annual goal isn’t going to spur supporters to contribute, says Ms. Hambuchen. (In this particular e-mail, the stated goal is $150,000.)

Common Variations

That’s just one of countless variations on the matching theme. Save the Children and other aid groups talk about how individual donors can stretch their donations by helping the charities secure grants from the U.S. Agency for International Development.

In many cases, the agency requires that the aid groups it supports secure one dollar for every two or three that the government provides. (“It adds up: Every $1 from you + $3 from USAID can mean $4 of lifesaving help for children. 4 X,” says the e-mail from Save the Children).

But, aid groups can sometimes count unrestricted money from donors toward the U.S. Agency for International Development rules, regardless of whether they raise enough gifts in a particular campaign.

For many charities, the scurry to meet a matching goal isn’t nearly as hair-raising as fundraisers and spokesmen make it sound. For example, public broadcasting often uses matching gifts during pledge campaigns, telling listeners that a donor is matching up to $10,000 in gifts made during a particular hour.

In many cases, the donor gives his or her $10,000 regardless of whether the charity comes up with the entire sum, say fundraisers.

Other stations raise money in advance of an on-air campaign from big donors and then combine it into a pool of matching money.

The money is a gift, not a pledge, and the nonprofit radio station holds onto the full sum regardless of the success of its campaign with listeners.

Whether charities record matching gifts in their books until they’ve raised the money differs from charity to charity and campaign to campaign. Some wait until they have raised the additional money, but others record the gifts when they’re pledged.

Donor Questions

Occasionally, nonprofits do hear from donors who want to know what’s behind a matching solicitation.

Ms. Hambuchen says Mercy Corps gets at most 10 phone calls from donors seeking more information each time her charity sends a mass e-mail. She says no donor has been dissatisfied with the organization’s answers.

Save the Children has an information sheet that helps donors understand the finer points of how matches work.

The letter explains, for example, that the charity has sometimes been able to use unrestricted money to secure USAID grants when it’s been unable to raise the matching money through a specific campaign.

Ms. McManus, the Canadian fundraiser, is an international board member of the Association of Fundraising Professionals. She says guidelines about how to describe matching gifts in appeals don’t exist.

“The lines are gray,” she says. “But if the language is open to interpretation or leaning toward being open to a conclusion that’s not truthful, you have gone over the line.”

“Donors,” she says, “should be skeptical.”

Marcus Owens, a lawyer who led the tax-exempt division of the Internal Revenue Service, says he’s not aware of a legal challenge against a charity involving matching gifts. But he says nonprofits should be careful.

To rise to the level of fraud, Mr. Owens explains, a solicitation’s language would have to be untrue—something along the lines of, ‘If you don’t give a donation, we won’t receive a million-dollar grant,’ if that’s not the case.

Rigorous Review

Some nonprofits say they work closely with their finance and legal teams on matching-gift appeals.

For instance, Diana Bogue, director of special gifts at Save the Children, says her colleagues sometimes ask her to water down or change the language of an appeal.

She says the nonprofit group uses words like “can mean” or “may,” instead of “will,” in describing whether a donor’s money is doubled or more.

Fundraising consultants advise charities to take steps to ensure appeals don’t undermine their credibility.

Ms. McKee, of Sea Change, says that nonprofits should endeavor always to attach donors’ names to matches.

Otherwise, people may question whether the matching money really exists. Would-be donors may also be skeptical of whether a charity really faces a deadline to raise the matching dollars, she says.

She adds that charities should keep the language relatively simple. If it gets too complicated, she says, it may seem like the charity is trying too hard to concoct a match.

Some fundraisers also say that charities should have written agreements with donors who put up initial matching money.

Such a pact can help clarify whether the money is conditional, enable the nonprofit to communicate the match more clearly to other donors, and help avoid bad blood between donor and nonprofit.

Charities could build legitimacy if they speak openly when they fall short of a matching-gift goal, says Robert Carter, a fundraising consultant in Sarasota, Fla.

“If you know you’re going to get the money anyway but you just morphed it into a match, the credibility is lost,” says Mr. Carter. “It would probably lend a lot of credibility to the organization to say we went for it and almost got there, and thank you.”

But that rarely happens. Despite her concerns about the squishy language and overuse of matches, Ms. McKee says that she doesn’t necessarily think that matching gifts are a bubble about to burst.

“I’m hesitant to advise nonprofits not to use matches, because they work,” she says. “But you have to legitimize them.”

Tips for a Successful Matching-Grant Drive

• Don’t be afraid to say no if the donor wants to put up a match for a program that isn’t an organization’s priority.
• Keep the terms of the match relatively simple.
• Name the donor who is putting up the matching money.
• Draw up a written agreement with the donor about the terms of the gift.
• Let donors know if the campaign falls short of its fundraising goals.