Leveraging Matching Gifts Programs to Boost Donor Retention

Leveraging Matching Gifts Programs to Boost Donor Retention

By on Jul 5, 2022

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nonprofit donor retention and corporate matching gift programs

Employer matching gifts offer key advantages to nonprofit organizations that strategize for and receive the source of funding. Said benefits often encompass increased individual donations, opportunities for additional corporate funding, improved supporter engagement, and more.

In regards to the key question of “are corporate matching gifts and donor retention levels related?” the short answer is yes. Matching gifts and donor retention share a positive correlation, with each variable increasing alongside the other.

In this article, we’ll help you understand how to make this magic relationship work for you. To start, let’s dive into the key building blocks of success in this area:

  • The Basics of Matching Gifts
  • What to Know About Donor Retention
  • The Correlation Between Matching Gifts and Retention Rates
  • Matching Gifts and Donor Retention Statistics to Know

Matching gift programs are loved by the nonprofits, companies, and donors that get involved. Nonprofits receive additional support, companies better engage with employees while improving their reputations among consumers, and donors are able to see their dollars stretched twice as far.

Let’s explore the key facets of matching gift fundraising and donor retention over time, as well as take a look at the research and results of the topics together.

The Basics of Matching Gifts

Employer matching gift programs are a unique form of corporate philanthropy in which companies financially match the donations their employees make to eligible nonprofit causes.

This typically occurs at a 1:1 (or dollar-for-dollar) rate, meaning a $100 employee donation would be subject to a $100 match from the company. Ultimately, this would result in a $200 (or doubled) donation value for the nonprofit. Some businesses choose to match at even higher levels, however, such as 2:1 or 3:1. In these cases, individual donations are able to be tripled or even quadrupled.

Though the specifics can vary from company to company (and nonprofit to nonprofit), here’s an overview of how the matching gift fundraising process typically works:

  1. A donor makes an initial donation to a nonprofit organization.
  2. The donor is encouraged to look into whether their employer offers a matching gift program (typically by contacting the company, looking into provided office policies, or searching an online employer database).
  3. If eligible, the donor submits a matching gift request to their employer (most often a short online process, though some companies use paper forms) that provides proof of the initial donation.
  4. The employer reviews the request and ensures the donation meets their matching gift criteria (minimum and maximum amounts, types of eligible employees and nonprofit causes, submission deadlines, etc.).
  5. If the match meets the employer’s guidelines, the request is approved, and funding is disbursed, providing the nonprofit with its bonus donation match.

Not to mention, matching gift programs tend to be more prominent than nonprofits and donors often believe. In fact, matching gifts are offered by tens of thousands of businesses that employ more than 26 million individuals, and approximately $2 to $3 billion is donated through these types of matching gift programs on an annual basis.

What to Know About Donor Retention

Donor retention is the measure of the rate of donors who continuously give to a nonprofit organization beyond their initial contributions. Nonprofit fundraisers should always be aiming for high levels of retention for multiple reasons⁠—not the least of which is that it’s significantly more cost-effective to retain donors over time.

An organization’s retention rate is typically determined year over year. The figure is calculated as the number of returning donors (those who give again following their first gift) divided by the total number of donors having given the previous year.

Organizations looking to increase their retention rates should prioritize effective communication with personalization, segmentation, and interactivity⁠—all while emphasizing the impact of fundraising on the cause.

The Correlation Between Matching Gifts and Retention Rates

Our research shows that corporate matching gift programs and donor retention levels share a positive correlation⁠—which means that when one increases, the other follows suit. Here’s what our experts say about why this works:

  • Matching gifts offer an additional donor touchpoint. To drive repeat donations, you want to keep your nonprofit and its cause at the top of donors’ minds for as long as possible. The more individuals think about your organization, the more engaged they’re likely to be in the future. Highlighting matching gift opportunities lets you provide an additional touchpoint that reminds supporters about your organization. For context, Forbes recommends a seven-touch approach to optimize donor relations⁠—though the suggestion varies depending on who you ask.
  • Matching gifts increase individual donation impact. Donors love giving to organizations that they can see are using their dollars to make a real impact on causes they care about. Matching gift opportunities let individuals stretch their support even further, which helps solidify positive associations with the organization. This makes them more willing to give again in the future! Studies show that over 73% of recurring donors continue giving when they understand the impact of their donations⁠—and matching gifts only go to elevate that idea.
  • Matching gift efforts demonstrate good stewardship of donor dollars. Donors want to know that an organization puts as much of their fundraising revenue to work as possible to benefit the causes they support. With matching gifts, donors can see their favorite nonprofits displaying strategic stewardship of their funds (by increasing corporate giving), which allows more revenue to go directly toward the mission. According to Charity Navigator and other fundraising experts, “proving you are a wise steward of donations” will aid your nonprofit in the long run.

The bottom line is that the better donors feel about the impact their initial contributions make, the more likely they are to continue giving. Matching gifts enable nonprofit supporters to do more and, thus, result in higher rates of donor retention over time.

Want to dig deeper? Here are proven methods that nonprofit organizations can ensure that matching gift efforts help improve donor retention rates.

Matching Gifts and Donor Retention Statistics to Know

It’s important to understand what nonprofits like yours can expect in terms of both matching gift fundraising and donor retention rates. Thus, we recommend browsing these statistics pulled from Blackbaud and Double the Donation research to learn more about the matching gifts, donor retention, and the relationship between the two subjects.

Before diving into the effects of matching gifts on donor retention levels, let’s first set the stage with an overview of the average nonprofit’s rate of repeating support.

In an analysis of 2021 giving, Blackbaud shares that only 29% of offline donors are retained over the first year, which is compared to a meager 25% of first-time online givers who are retained during their first year. However, the retention level jumps to approximately 60% for donors retained annually on a multi-year level.

This report shows that many organizations struggle to maintain high rates of retention due to the fact that a large majority of donors do not end up giving a second time to the organizations they engage with at a single time. As a result, most fundraisers should constantly be on the lookout for new ways to preserve donor relationships beyond the initial gift.

In a recent research study, a majority of donors indicated that the presence of matching gifts would make a significant impact on whether they choose to give to an organization. In fact, more than 8 in 10 survey respondents reported that they’d be more likely to donate charitably should they know their gift would be matchable by their employer. Not to mention, this idea is corroborated by findings that simply highlighting matching gifts in fundraising appeals results in a 71% increase in response rate.

 So what does that have to do with retention?

Promoting matching gift opportunities substantially increases the likelihood of a donation being made⁠. This means that should organizations vying for donors’ repeat gifts make an effort to incorporate corporate matching gift initiatives in their fundraising efforts, they’ll be more likely to succeed in securing that follow-up gift.

Matching gift fundraising research reports that post-donation matching gift follow-up emails see substantially high open rates⁠. In fact, the reported 53% open rate for matching gift communications is more than 2-3 times higher than the average nonprofit email open rate. That’s why organizations should be sure to highlight matching gift information within their messaging strategy to increase engagement and, in the end, drive repeat donations.

Nonprofits looking to increase their retention rates are typically also aiming to establish personal relationships with donors. These relationships are founded upon communication, much of which incorporates digital outreach. And it shouldn’t all be donation requests, either, or else you risk forming solely transactional relationships that don’t typically last.

Essentially, the idea is that organizations want to send messages that their donors want to open⁠. Thus, it’s important to incorporate a combination of fundraising asks, support acknowledgments, matching gift follow-ups, and more.

Matching gifts and donor retention go hand in hand. Effective matching gift fundraising leads to improved supporter relationships, additional opportunities for engagement, and an ability to offer increased impact on nonprofit causes⁠—each of which plays a significant role in repeat giving.

Overall, donors love partaking in employer gift-matching programs and, as a result, tend to give more (in both number of gifts and donation size) to organizations that promote the opportunities. For fundraisers aiming to increase their rates of donor retention, marketing matching gifts can go a long way.

ABOUT THE AUTHOR

Julia Beltran is the partnership success specialist at Double the Donation.

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