Money increasing in value

Matched-funding initiatives a major incentive for charitable giving

Charities have far greater fundraising success when they can use the promise of matched-funding to elicit donations than offering donors tax breaks or other perks to potential donors, according to a report by Dr Beth Breeze.

The report by Dr Breeze, Director of the Centre for Philanthropy at the University of Kent, examined the success of a five-year trial run by the Heritage Lottery Fund (HLF) and Department for Digital, Culture, Media and Sport (DCMS) to help heritage-focused charities raise money for endowment funds to improve their financial independence.

The report notes that over the five-year period a total of £53.3m was raised by the 31 organisations that took part, which led to an additional £29.8m of matched-funding from the HLF, helping raise a total of £83.1m.

Of those that took part two-thirds reached the target they were set thanks, in part, to being able to promise donors that any contribution would be matched through the scheme. While most charities were on a 1:1 matched-funding scheme via the DCMS and the HLF some larger charities had a 2:1 or 3:1 scheme.

Not only did matched-funding help donors to feel that their contribution was larger and therefore more meaningful but having a deadline for the matched-funding period encouraged last-minute donations of those wanting to take advantage of the offer.

The willingness of donors to give towards endowments funds was also higher than usual as often donors prefer to give to more tangible causes with obvious benefits. However, the matched funding benefits helped to overcome this usual reticence.

Charities that took part and successfully reached their funding goals included the National Museum of the Royal Navy (£20m) and the Victoria and Albert Museum (£20m) on 3:1 funding scales and London’s National Portrait Gallery (£2m) and SS Great Britain in Bristol (£1m) on 1:1 scales.

The report recommends that matched-funding should become central to fundraising efforts for charities and museums whether through government-backing or by encouraging wealthy individual donors who would be interested in match-funding against other donations help boost the overall amount raised.