"Matchfunding is the practice that allows us to take co-responsibility - which is part of Goteo’s DNA and of the Foundation’s mission - to its maximum expression. This principle expresses the shared commitment found in each of the practices we promote, from collective financing (in traditional crowdfunding and in matchfunding with institutions) to our training and co-creation methodologies, which are always motivated by the goal of achieving a better society.
With this aim in mind, during the first half of 2016 we’ve worked to improve the design, aesthetics and structure of information of our matchfunding calls, so they can speak for themselves about their progress, scope and results and people can come to their own conclusion.
But how does matchfunding work? This process starts when an institution, private or public, has a budget to develop or support a specific sector (health, culture, education, the arts, etc.). The institution, through Goteo, invites the members of the community in the relevant sector to submit for crowdfunding projects which need financing. Anyone will be able to contribute through our platform and, partly thanks to their connection to the institution, strengthen the potential impact of these projects.
During the second phase, a period for preparing and submitting projects, training sessions are held so promoter teams and individuals can receive expert advice and feedback and suggestions from their peers. They will also be able to work on formulating and optimising their campaign together with technicians and members of the institutions which may later finance their projects. This is quite unusual in the process of grant giving and is certainly beneficial for projects.
Later, when each project's crowdfunding campaign is started, the institutional money will progressively match the crowd’s contribution, euro by euro, as if they were communicating vessels, until the flow of institutional money ceases.
Thus, both sources of financing (public and private, big and small) will be linked during the matchfunding campaign for each project, creating a multiplying effect. If one person donates 100 euros to a specific project, the institution will also contribute 100 euros, matching the donation.
Institutions gain visibility and acknowledgement by being associated with projects for the common good, and with initiatives which have the support of society. At the same time projects gain institutional support, financing, visibility and potential impact.
Moreover, our data shows that matchfunding maximizes the “multiplying effect”: the amount of money contributed by the crowd significantly increases when there is institutional support, 180% on average. The more money contributed by the institution, the more likely the campaign is to succeed. In fact, success rate increases to around 90%, 20% higher than the success ratio for Goteo campaigns without matchfunding (70%)." (https://en.goteo.org/blog/6858)