Threshold pledge system

Imagine you want to buy a toy that costs $10 but you don’t have enough money to buy it by yourself. So, you ask your friends to help you out. You say, “I need everyone’s help to collect $10. If we all pitch in a little, we can get the toy.”

But here’s the catch – you don’t want to take money from your friends unless you know for sure that you’ll have enough to buy the toy. So, you set a goal. You tell your friends, “We need to raise at least $10, or else we can’t buy the toy.”

This is kind of like a threshold pledge system.

It’s a way for people to come together and donate money for a certain cause or project. But instead of just collecting money and hoping that it’s enough, a threshold pledge system sets a minimum goal that needs to be reached before any money is collected.

For example, let’s say a group of people wants to raise money to save a local park. They decide to use a threshold pledge system. They set a goal of $1,000, and everyone who wants to support the cause pledges a certain amount of money.

But the money isn’t collected until the threshold – in this case, $1,000 – is reached.

This helps ensure that everyone’s money is put to good use, and that the project won’t go unfunded.

So, a threshold pledge system is like saying, “We’ll all help, but only if we know we’ll have enough to make a difference.”