Digging Into the Matching Gift Weeds

December 28, 2017      Kevin Schulman, Founder, DonorVoice and DVCanvass

Our fellow traveler Nick Ellinger has probably done more digging into matching gift research than anyone on our team.  I thought it would be particularly helpful to  share with you one of his earlier posts on structuring a Matching Gift Campaign.

I’m hoping this piece from Nick demonstrates that there’s a lot more to constructing –and testing– an effective matching campaign that simply relying on myth and ‘conventional wisdom’.

Roger

 

 

 

 

Matching gift campaigns work. But are they necessary?

Whether it’s a grantor’s challenge fund, a campaign match, a fund set up by a generous donor or donors, matching gifts are a frequently used and frequently successful tactic.  Most of the time, it’s set up as a “double your impact” campaign.

Three researchers — Huck, Rasul, and Shepard — looked at whether a lead donor increased the success of a campaign and how the structure of the match impacted that success.

They did this for the Bavarian State Opera House.  (BTW, if you are a researcher and want to run a test with donors on your dime, email me at nellinger@thedonorvoice.com;; we’re usually game.)

300px-mc3bcnchen_nationaltheater_interior

The Bavarian State Opera House.
Fundraising motto: hey, these inlays don’t gild themselves.

Here were the six test treatments:

  1. Control: No lead donor, no match commitment
  2. Lead donor: A generous donor has already funded part of the program for 60,000 Euros (remember, Bavarian State Opera House).  We need your help with the other part.
  3. 50% match: A generous donor will match your Euro with .5 Euro.
  4. 100% match: Euro for Euro match
  5. Non-linear matching: A generous donor will match any gift made over and above 50 Euros.  (Which is to say if you donate 120 Euros, the donor gives 70.  If you donate 70, the donor gives 20.  If you donate 40, the donor gives nothing)
  6. Fixed gift matching: A generous donor will match any positive gift made with 20 Euros of his* own.

Got your guesses of what will do what?  Good — here we go with the results**:

Response rate Average gift Revenue per piece
Control 3.7% 74.3 2.79
Lead donor 3.5% 132 4.62
50% match 4.2% 101 4.19
100% match 4.2% 92.3 3.84
Non-linear match 4.3% 97.9 4.18
Fixed gift match 4.7% 69.2 3.27

Yeah, not what I thought either.  I figured, from all of the virtual ink I spilled in social proof and authority last week, that the presence of a lead donor would help. Presumably, there was another mechanism in place — that of anchoring.  I’ll dedicate a full post or five to anchoring effects at some point, but now, suffice it to say that by throwing out the number of 60,000 Euros you can trigger the idea that a person’s gift should be closer to that number.  For some, that may turn them off (although the decline in response rate wasn’t statistically significant).

What surprised me was that the matches didn’t help revenue per piece (unless of course the match is generating marginal revenue).  The matches increase response rates, but the average gift was significantly lower in all of the matches.  The authors’ hypothesis is that the match has a bit of a crowding out effect — that is, the donor feels like their 50 Euros is actually 100 Euros, so they need not make the donation of 100 Euros to have the impact they wanted to have.  This is certainly plausible and consistent with previous research.

What to make of this? Like, I’m guessing, many of you, I’d only tested matching gift language versus control language. However, there is some evidence here that simply stating that a lead gift has been made can increase the anchoring effect and support the idea that a program is worth funding without potential negative byproducts of crowding out donations.

That’s for the general case.  You might also take a look at a fixed gift match depending on your goal.  Generally, I prefer quality of donors to quantity.  However, if you were running a campaign like lapsed reactivation, you might legitimately want to maximize your response rate at the expense of short-term net revenue.

Based on this, I’m going to be looking at testing this against our typical matching gift campaign.  If you do likewise, please let me know at nellinger@thedonorvoice.com or in the comments section.  It would be great to see additional evidence on this.

Nick

*  The gendering is from the original — not my own.

** The rounding is in the original paper and throws off the revenue per piece variable a bit, but I chose to stick with what they had in the original paper.

3 responses to “Digging Into the Matching Gift Weeds”

  1. Jay Love says:

    Amazing, what true research can prove versus our own “guesses”.

    I highly suggest anyone wanting to know more about how bad our guesses are based upon the human mind’s first inclination read Michael Lewis’s book “The Undoing Project”.

    The book illustrates experiment after experiment where even experienced minds poorly predict future results. So much so, you will want to use research much more often!

  2. Suzanne Fortier says:

    Ha! I’ve used this concept with board giving. In the most graphic example, two outlier gifts skewed the board gift average up by quite a bit. When I showed the board the average gift–guess what happened to individual board giving over the next year? The average increased, of course!

  3. Tom Ahern says:

    Second Jay’s recommendation. Just picked up THE UNDOING PROJECT at Midway airport … and it is mind-blowing. Read it (a pleasure; by the author of MONEYBALL and THE BIG SHORT). You’ll never be entirely confident in your decisions again (that’s a good thing, by the way). Complacency is the thing with horns and a barbed tail that stares at us in the mirror each morning.