In the world of nonprofit fundraising, matching donations have become a ubiquitous strategy to entice donors to contribute. The appeal of doubling or even multiplying one’s contribution can be a powerful motivator, creating a sense of urgency and amplifying the impact of each dollar given. Matches by a well-respected individual or organization can also add credibility to the worthiness of the campaign. It is not uncommon to see matching campaigns that encourage donors with appeals of 3x, 5x and even 10x matches. However, research suggests that nonprofits would be more effective in their fundraising efforts by adopting a different approach.

Nobel Prize-winning economist, John List, has conducted a series of extensive field experiments with nonprofit organizations, involving sample sizes in the tens of thousands. His findings reveal a counterintuitive truth: higher matching ratios had no additional impact.

First, it’s important to note that List’s research supports the positive impact that matching appeals have overall. Simply having a match increases the probability that an individual donates by 22% vs. an appeal without a match. However, higher match ratios (3x or 5x) have a negligible effect on the probability of donation and the amount of the donation compared to a 2x match. Instead, a 2x match is just as effective as higher ratios, enabling nonprofits to stretch their match grant dollars further.

The Implications for Nonprofits

These findings have profound implications for how nonprofits structure their matching campaigns. A 2x match not only leverages the psychological appeal of matched donations, but also allows nonprofits to maximize their resources, ultimately enabling them to make a greater impact in their communities.

So why do we see nonprofits of all sizes continuing the use of 3x, 5x and even 10x matches in their digital and direct mail campaigns? It’s hard to say how much this research has penetrated nonprofit organizations, there’s a real possibility that millions of dollars of potential revenue are foregone due to application of intuition. If your organization is achieving higher donation rates using higher match rates for a given channel or segment or timeframe, we and and the rest of the non-profit world would love to hear from you. And if you now run the numbers and are not seeing a significantly higher yield in the donations solicited with a bigger match compared to a 2x match, then it’s time to reallocate your matching funds.