This is another tilting at windmills post on matching gift offers.  Feel free to tune out, everyone else seems to.

Cutting to the chase, the 2x, 3x, 10x…match is either a sham or you like lighting money on fire.  It’s one or the other.   How so?

If you can get the same results from a 1:1 match, (you can) why in the world use a 3:1, or 4:1 or even 5:1 offer?   And by the way, the 1:1 match isn’t the best use of those dollars.  Making it a lead gift works much better and you avoid all the sham possibilities.

But forget all that, let’s do the basic math.

If the matching gift offer is legitimate it means there is a finite amount of money available for the match and the nonprofit will take in no more donor dollars than can be matched.

Simple math using a $100 pot of money available shows why upping the match ratio from 1:1 to 2:1 is lighting money on fire.

1:1 Match Scenario:

Under a 1:1 matching scenario, the Major Donor matches every dollar contributed by regular donors equally, up to a total of $100.

Calculations:

• Regular Donors’ Contribution: To fully utilize the $100 match, Regular Donors also need to contribute $100.
• Major Donor’s Match: $100
• Total for the Organization: $100 (Regular Donors) + $100 (Major Donor) = $200

2:1 Match Scenario:

Under a 2:1 matching scenario, the Major Donor contributes $2 for every $1 contributed by Regular Donors, until the $100 cap is reached.

Calculations:

• Regular Donors’ Contribution: $50 to fully utilize the Major Donor’s $100 cap (as derived earlier).
• Major Donor’s Match: $100 (2:1 on $50)
• Total for the Organization: $50 (Regular Donors) + $100 (Major Donor) = $150

Comparison:

• 1:1 Match Total: $200
• 2:1 Match Total: $150

If picking between 1:1  and 2:1 (or higher), why do it any way other than 1:1?  Because there’s no limit on the amount of money a charity will take in on the matching gift offer. If there is $100k in matching money and it is a 2 to 1 match offer, most charities will not turn down or give back the donor contribution that gets the total take to $201, $202 etc.

When is the last time you’ve heard your on-air PBS announcer say “we failed to meet the challenge” or received a donor mailing or email admitting to coming up short?

Blue in the face time. Any matching gift offer is a lousy use of the match pot money, lead gift is way better with no ethical or legal constraints on the amount you can take in.

If constrained to the world where only a match will do, 1:1 is your best option unless you like lighting money on fire because you are running a legit match or, well, you aren’t.

My hope is the sector collectively sees the light on this and changes practice.  My expectation is it will require feeling the heat in the form of a when not if investigative report and  scathing expose that will benefit from being true.

This negative PR hellscape will only be outdone by the voluminous civil lawsuits brought by plaintiffs’ attorneys via class action and Attorneys General, likely in the form of red states filing suit against left-leaning charities, and vice versa.   A pox on both your houses as these suits will benefit from being meritorious under any number of statutes.

I hope I’m wrong.  I hope the light and better angels are calling.

Kevin