Challenge grants are funds disbursed by one party (the

grant Grant or Grants may refer to: Places *Grant County (disambiguation) Australia * Grant, Queensland, a locality in the Barcaldine Region, Queensland, Australia United Kingdom *Castle Grant United States * Grant, Alabama *Grant, Inyo County, C ...

maker), usually a government agency,

corporation A corporation is an organization—usually a group of people or a company—authorized by the state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal context) and r ...

foundation Foundation may refer to: * Foundation (nonprofit), a type of charitable organization ** Foundation (United States law), a type of charitable organization in the U.S. ** Private foundation, a charitable organization that, while serving a good cause ...

trust Trust often refers to: * Trust (social science), confidence in or dependence on a person or quality It may also refer to: Business and law * Trust law, a body of law under which one person holds property for the benefit of another * Trust (bus ...

(sometimes anonymously), typically to a

non-profit A nonprofit organization (NPO) or non-profit organisation, also known as a non-business entity, not-for-profit organization, or nonprofit institution, is a legal entity organized and operated for a collective, public or social benefit, in co ...

entity or educational institution (the grantee) upon completion of the challenge requirement(s). The ''challenge'' refers to the actions or results that must be achieved before money is released and usually involves substantial effort, so that the recipients know that they are helping themselves through their own hard work and sacrifice. Challenge grants: # Spotlight the recipient organization and provide an endorsement from a well-known entity. # Help other donors feel that their money goes further. # Enable the recipient to honor and reward the entity that issued the challenge grant. # Provide the maker the opportunity to garner positive publicity with a notably large funding amount they may avoid parting with. A typical requirement is similar to

matching funds Matching funds are funds that are set to be paid in proportion to funds available from other sources. Matching fund payments usually arise in situations of charity or public good. The terms cost sharing, in-kind, and matching can be used interc ...

where funds be raised or acquired from other sources following a stated matching factor, often 2:1, 3:1 or 4:1. For example, a $1,000 challenge grant with a 3:1 match would require the recipient to raise $3,000 before they would receive the $1,000 grant. The challenge could require a new solution to an existing problem that had been ignored. There could be additional requirements specified that could be virtually anything, from program certification to member participation.

References

{{Reflist Philanthropy Grants (money)