Snickers Bars And Matching Gifts
Which Matching Gift Challenge formula works best?
(A) 1:1 matching grant (“An anonymous donor will match your contribution dollar for dollar.”)
(B) 2:1 matching grant (“triples your donation”)
(C) 3:1 matching grant (“quadruples your donation”)
The anecdotal (as opposed to scientific) ‘rule’ in our trade is that higher match levels are better than lower match levels. [Remember the ‘rules’ we discussed on Monday?!]
So you might be surprised to learn that a 3:1 matching grant offer is no more effective than a 1:1 challenge. And a 2:1 challenge is about the same as the 3:1 and 1:1 challenges.
These findings are based on real campaigns conducted and measured by economists Uri Gneezy and John List of the University of Chicago.
In their fascinating book — The Why Axis — they challenge some of the received wisdom of our trade with a series of field experiments. Thus their findings exploding the myth of challenge grant formulas that more is better.
They explain that, from an Economics 101 viewpoint, fundraisers’ reasoning that giving will increase if the matching formula increases makes perfect sense. After all, they note, “if you can get either one Snickers bar for $1 or two for $1, you’ll go for the two-for-one deal.”
However, when they went into the field, here’s what they found:
- Indeed, just having a match in place increased the response rate by 20%.
- BUT … the 3:1 matching grant offer proved no more effective than a 1:1 challenge. And a 2:1 challenge worked about the same as the 3:1 and 1:1 challenges.
So what about the Snickers effect? The researchers concluded: “In the end, matching grants aren’t at all analogous to offering two or even three Snickers bars for the price of one … donors do not behave like customers at a fruit counter.”
According to Gneezy and List, what motivates matching gift donors is that their gifts are an example of “doing the right thing” and they are also motivated by “feeling that warm glow”.
Their advice for fundraisers in almost any organization:
- “stop relying on hand-me-down formulas or assuming that selling donations works like selling Snickers bars.”
- “Above all, it’s important to appeal directly to people’s appetites for the warm glow by showing them how good they will feel after donating. When charities (and marketers) recognize that feature of human motivation, they’ll be able to come up with a hundred new and interesting ways to get Mr. and Ms. Citizen to open their wallets.”
What’s your experience with matching challenge grant formulas?
Roger
9 responses to “Snickers Bars And Matching Gifts”
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I worked several years for an organization that relied often on matching offers, and response was terrific. Most were $4 : $1. At one point, we offered a $14 : $1 match – it was legit. But it did awful. We didn’t test it, but my best guess is that it was simply too good to be true; donors found it suspicious so they didn’t give.
I currently work in a country where matching grants are rarely used. My donors love it and even phone in to make sure their gift is being matched.
In the US, when I worked agency side, we had a client who had done the 3:1 matching Christmas grant for years. Everyone on the staff and agency side thought it might be getting old and overused so they tested a Christmas Appeal without the match. The howling from the donors was loud and long! They loved the match, they weren’t tired of it. They wanted their Christmas match. Never assume your donors are as bored as you are with your appeals.
I’ve worked on 1:1 matches, 1:3, 1:4 and 1:6. MGAs are quite common in Australia because the government offered matching funds for overseas development programs. Not sure whether that will continue as the new government appears to have dismantled the body that provided that funding.
I’ve not actually tested whether a bigger match does better but they all seem to work really well – as long as you clearly define the matching offer. That sounds obvious but I had one client whose matching appeal failed dismally – I wondered how that could be possible until I saw the copy. So having a great offer is not enough – you have to execute other parts of your appeal well too! 😀
I’ve found that where the larger matches really make a difference is in the major donor work an organization is doing. Business people and others that are genuinely thinking about the return on investment feel even better about giving larger dollars during a 3:1 match.
I’ve been copywriting for match appeals for 3 decades and have always seen at least a slight lift from adding a match. Sometimes I’ve seen a huge lift. But a seemingly more attractive ratio, a 1:4 or 1:7 or 1:14 sometimes doesn’t bring in what an organization might think because the required explanation of the match details gets in the way of the emotion and storytelling that is essential for an appeal to work.
And you can’t just throw a match on top of an appeal for an organization whose work is not valued already. To use a shopping analogy, just because it’s on sale, you’re not going to buy something that won’t give you complete satisfaction.
Great info! Can’t wait to dig into the book.
We found that 1:1 matches outperforms all other offers. Often people ask if a “50 cents for every dollar” match works and we’ve found it doesn’t perform as well as 1:1 either.
We found a big conversion bump by using a dedicated match-campaign landing page versus just sending donors to your standard donation page. Carrying the “offer” and “match message” all the way through the donation process pays off.
In my experience producing public radio on-air fundraising, the 2:1 match always outperforms the 1:1 match, both in participation and average gift.
I think it has to do with relative rarity of the offer, the limited time periods associated with a match that eats up twice as much matching money in the same period as a 1:1, and the on-air delivery and messaging, which is often more energetic than any other on-air pitching. Success hinges on available audience at the time the match is offered, so one must be mindful about maximizing reach, due to the infrequency of the offer.
The downside is that listeners who have caught on to 2:1 matches may hold back on giving, even during a 1:1 match, because the 2:1 is a far more favorable way for them to leverage their gift. Therefore, if they are not listening during the 2:1 match when it is offered, we might lose their gift.
Hmmmm. After being in this work so many years, I assumed (ha!) that everyone knew that matches work, and the ratio doesn’t really matter. That has been my experience, so purely anecdotal. My unproven theory has been that the ratio is simply ‘detail’ to donors.
Having met John List while he was in Alaska visiting with the Rasmuson Foundation and the University of Alaska Anchorage I was fascinated by his match conversation and read all of his website postings and began doing match mailers for all of my appeals and acquisitions. Working with the local university economics dept. I did a controlled A/B comparison with the 1:1 match and I was up 28%, I teach to all fundraisers the importance of always having a match.
Not mentioned is the enhanced relationship with the match organization. They are excited to be “connected” and also the exposure and positive PR that comes from being teamed with Bean’s Café.