Does donation matching work? | Hacker News Reader

Does donation matching work?

benkuhn.net

17 pointsluu9 comments

I was under the impression that the primary reason why charities did donation matching was to allow them to take money from major donors to fund projects while still maintaining their public charity status by having widespread support from the public: if a small charity wants to accept a million dollars from some large company, they need to come up with half a million dollars donated by a number of small donors to pass the "public support test"; doing this per dollar instead of per commitment leads directly to "we can accept up to two dollars from this large donor for every dollar all of you small donors are able to contribute".

This may be true for MAJOR capital campaigns, but in my experience is rarely what motivates a matching campaign. At least in the size orgs I work with (1-2mil), matching campaigns are either genuine challenges from a donor OR a move to get the year-to-date number up to where it should be.

Cases where the challenge come from the donor don't seem to fall under the scope of the OP's strategy: a donor's challenges would be evaluated on benefit to the donor, maybe in terms of marketing their brand to the community, as opposed to how it affects donations. As you use the word "genuine" for that case, maybe the idea of whether matching grants are "effective" or not is simply an incorrect question?

I personally am aware of more matching challenges and capping grants that are as I say "genuine".

You make a good point, perhaps their efficacy is more aptly measured on the outcomes of the major donor. However, it's still a commonly held belief in resource development and fundraising that a match is a very strong motivator to give. This is a good start to determining how true that is.

The OPs suggestion of heavily studying your own matching strategy and running different types is good advice (though maybe not 100% practical).

I'll also note that I couldn't find any particular data on the efficacy of a match in large campaign fundraising vs. in-room fundraising. it's very different to see a match in a direct mail or general campaign, vs. say a featured guest at a fundraising party challenging the room personally.

Yeah, I definitely think donation matching is generally a good deal from the charity's perspective.

When I wrote this I was more thinking from the perspective of someone who has a large fixed donation and is deciding what to do with it. In that case, they might want to back a matching campaign, but if they're trying to maximize the impact of their donation, they would want to know whether such a campaign would actually draw out more donations.

All behavioral studies aside, in the long run matching doesn't seem like a reasonable approach. The only money you have to donate is your own. If individual A offers to match my donations, I could reason that A will probably donate less to charity in proportion to how much of A's matching funds are used up. That is, in the long run, whether I take up A's offer won't affect the total amount A spends on charity. So it shouldn't affect my decision either.

As an aside, I think people don't fully consider the effectiveness of earning more money as a form of altruism. Since around 30% will be taken by the government, and used to fund various social services, the choice to earn more money is really the choice to earn money and donate 30%.

If you take that approach, then you need to weigh the good and bad that the government does and how it does it's allocation.

If it has more money will it go to war more? If it has less money will it cut social programs or cut down on military adventurism? If it has more money will it be directed to special interests since social programs are already funded at a good level -- does more money enable corruption?

I agree with you about earning more money being for altruism; I think it's better to work a week and donate the money than do something you aren't skilled at. e.g. building houses when you can program and pay for 3 skilled builders - more gets done and at a better quality.

> As an aside, I think people don't fully consider the effectiveness of earning more money as a form of altruism. Since around 30% will be taken by the government, and used to fund various social services, the choice to earn more money is really the choice to earn money and donate 30%.

I'm super sympathetic to this idea, but I think generally there are even more effective places to donate extra earnings than the government! For one thing, a lot of government programs aren't very efficient for various political reasons. For another, even the worst-off people in the US are largely better off than the people that you could help by giving to organizations that work abroad. (Personally, I'm a fan of GiveWell's[1] approach to finding the most effective places to give.) But I agree that trying to earn money in order to fund this sort of thing is an under-appreciated idea, and in fact exactly what I'm trying to do :)

[1]:http://www.givewell.org/

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