Donation Match Programs for Charitable Giving: How It Works and How To Set One Up
Donation matching is a form of corporate giving that effectively doubles employees’ contributions to causes that matter to them. The premise is simple: When an employee makes a financial donation to a charity, the company contributes a matching amount, effectively doubling the donation amount.
What Are the Benefits of Donation Matching?
The benefit of match programs for nonprofits and charities is obvious — they get double the donations for the amount of fundraising work they do. But there are also benefits for the employees and for the company.
For corporations, donation matching is an effective, efficient way of engaging in corporate philanthropy. The company can establish guidelines for the type of organizations it will support but otherwise allow their giving to be led by employees. This type of employee-centered giving:
- Engages workers
- Makes them feel more empowered
- Improves employee morale
- Increases employee loyalty and “team spirit”
In addition, there are benefits for the wider community, as noted in a recent research paper on corporate giving: Because employees are often closer to the community, they have a deeper view of organizations that are doing the most effective and beneficial work within that community.
Finally, donation matching is an easy, structured way for a corporation to engage in corporate social responsibility (CSR). Match programs allow companies to build relationships with local organizations that are important to their employees, reaping the goodwill benefit that goes along with supporting good works in the community.
How Traditional Donation Match Programs Work
While there are slight variations, most traditional donation matching programs follow these basic steps:
- The employee makes a donation to an eligible organization (more on that later).
- They fill out a form, either on paper or electronically, that includes the details of their donation and requests that the company match their donation.
- The company reviews the request.
- If the request is approved, the company sends a check for a matching amount.
As you can see, this involves a lot of work — and control — on the part of the employer and their HR office. It also creates a number of barriers to giving:
- Employees can only donate to organizations chosen by the employer.
- They must fill out forms and submit them. Each year, as much as $7 billion in matching donation funds go unused, largely because employees forget to ask for the match.
- Charities must wait for the second part of the donation, which also effectively doubles their bookkeeping burden.
- Finally, some employees choose not to submit their donations for a match because they don’t want to reveal the causes they support to their employers.
Groundswell Has Reimagined Donation Matching
Groundswell has totally reimagined the way that donation matching programs work. In the Groundswell model, employees have complete control over their own giving and the causes they support. Plus, the charitable organization gets the full amount of the donation all at once, and the HR department is freed up to focus on supporting staff in other important ways.
Here’s how donation matching works the Groundswell way:
- Groundswell creates a Donor Advised Fund for each employee.
- The company can include tax-free contributions to the employee’s DAF as part of their total compensation package.
- The employee can allocate a portion of their pay to their DAF, with rules-based matching opportunities for the company.
- Employees distribute the funds in their DAF to the causes that matter to them, when and how they see fit.
- Charities receive the funds when and how the employee decides to make donations.
- Employees can track their funds, make investments, and access all the tools they need to receive the most benefit from their philanthropy.
That’s it. By removing the friction from the process, Groundswell empowers employees to give more to the causes they truly care about in a way that provides maximum benefit for themselves, their employers and the causes they support.
How To Start a Donation Matching Program
These are the key steps for starting a donation matching program at your company.
- Identify your purpose and set reasonable goals. This step is often overlooked but is vital to creating a program that aligns with your company’s overall CSR strategy.
- Set a budget for your corporate giving.
- Define the guidelines for your program.
- Establish the process for submitting, approving and distributing matching gifts.
- Publicize the program to employees, charities and the community.
Typical Donation Match Guidelines
A traditional donation match program requires a lot of groundwork in advance of deploying. Groundswell simplifies the entire process, and our team will be there to help you establish sensible rules for eligibility and donation funding.
Managing It All
Managing a matching gift program can be time-consuming for the HR office, but there are ways to make it easier and more transparent for both HR and the employees. Our mobile-first app puts all the information and tools for donor-advised giving into the hands of each employee, allowing them to manage and track the benefits of their giving. Reach out to our team to learn how Groundswell can help you build and deploy an effective, engaging donation match program for your company.
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