The Workplace Giving Handbook: Everything You Need to Know

Workplace giving programs offer employees an important benefit.

It gives employees a way to support the causes they care about and trust that their support is actually doing good in the world.

It’s not news that people are skeptical of corporate charity — it’s why words like pink-washing and greenwashing have entered the public vocabulary. Workplace giving programs offer a way to combat that skepticism and give employees a reason to feel good about the places where they work.

But what exactly is workplace giving, and how do you set up an employee-powered giving program at your company?

What is Workplace Giving?

By definition, workplace giving is any kind of organized program that collects employee donations for charitable causes through payroll deductions and/or one-time donations. The company then disburses those donations to nonprofits.

Over the years, the term has evolved to include volunteer giving programs, and other forms of employee giving programs. Today, these giving programs take many forms, including payroll deductions, donation match programs, and volunteer giving programs.

Matching Gift Programs

Donation match programs are among the most popular types of workplace giving programs, offered at nearly 65% of Fortune 500 companies, and accounting for $2 billion to $3 billion in donations annually.

The concept is simple in theory: an employee donates to a qualified nonprofit, and the company then makes a matching donation to the same nonprofit.

In practice, matching gift programs can be cumbersome and difficult to manage. In fact, for every dollar donated through matching gift programs, more than $2 goes unclaimed.

Volunteer Programs

In addition to typical volunteer programs — serving dinners at a local shelter or reading to school kids, for example — many companies create or participate in volunteer fundraising events, such as walk-a-thons or charity 5k runs.

Employees participate as a team, and the money raised is donated to the specific non-profit named. These campaigns can be great for team building and bonding, not to mention providing high-profile PR opportunities for the company.

Volunteer Grants

Many companies offer grants to organizations where their employees volunteer. This kind of program ensures that the company is helping to support genuine community organizations that their employees care about. They help deepen the ties between the company and the community and send the message to your employees that you care about the things that are important to them.

Volunteer Hours Matching

The third iteration of volunteer donation programs rewards your employees with extra cash they can donate to others based on hours that they spend volunteering with community organizations.

Giving employees paid time off for volunteering can make it difficult for workers to keep up with their workload and make more work for nonprofits. Some companies have found ways to reimburse employees for the time they already spend working in their communities.

One way is to deposit the equivalent of their salary for the hours spent into a Groundswell Personal Giving Account. From there, the employee can direct the donation to the cause they choose, effectively doubling their impact on the ground.

Donations Through Payroll Deduction

Many companies offer employees the opportunity to make giving easy by enrolling in an automatic payroll deduction for a chosen charity. Payroll deductions allow employees to essentially budget their charitable contributions over the course of the year.

However, the choice of charities to support is usually very narrow — often only one or two charities are chosen by the board.

A growing number of CEOs are moving away from the top-down approach to corporate giving, and moving to a model that puts the choice in the hands of their employees.

What Is a Workplace Giving Campaign?

Workplace giving campaigns are typically annual events held by companies to encourage employee donations to a cause.

They’re often held in the fall, to coordinate with the holiday season — and of course, the end of the tax year. They can, however, take place at any time. Their purpose is to publicize and raise awareness of any company-sponsored employee giving programs, and get more people involved in them.

Campaigns may also revolve around a specific need or event. These campaigns include disaster relief campaigns, or campaigns to support specific needs in the local community — supporting the unhoused, or providing funds for meals during a pandemic, for example.

How Does Workplace Giving Work?

The nuts and bolts of employee giving programs are rapidly evolving. Legacy workplace giving programs collected donations from employees, then combined them and funneled them to one or two charities chosen by the board of directors or the CEO. Historically, there are two major models for doing this.

Payroll Deduction

Programs that collect charitable donations through payroll deductions are the most common type of workplace giving programs, accounting for nearly 75% of all employee giving annually. Payroll deductions make charitable giving easy on employees — they fill out a payroll deduction form once, and HR/Payroll does the rest. It’s so easy, in fact, that when Google implemented a pilot payroll giving program, it increased the likelihood of donations to a promoted charity by 50% without reducing the average amount donated.

In addition, each participating employee has a running record of their deductions on their pay stub, with both the current and the year-to-date donation recorded. That’s a big boon at tax time — their pay stub serves as proof of their donation, so they don’t have to scrounge around looking for acknowledgement letters from the nonprofits to which they donate.

Nonprofits also benefit from this type of workplace giving program in several ways: they get predictable, sustainable donations, and often get more donations. Just as important, a payroll deduction model reduces the amount of work that falls on their shoulders by transferring a lot of it to the company’s payroll department. Managing a workplace giving campaign is a complex undertaking involving multiple steps and responsibilities.

The company creates a campaign to engage and encourage employees to sign up for the giving program. This is no small undertaking — there are entire toolkits devoted to teaching employees and volunteers to run successful campaigns.
The employee fills out a pledge card, designating the amount of the donation and/or the amount to be deducted each pay period. If the company allows it, they may also choose one of several pre-approved nonprofits to receive their donation.
The payroll department — or the company’s payroll provider — sets up the recurring deduction for each employee.
If the company also operates a matching donation program, HR processes all donations to set up the matching donation.
Each pay period, the payroll department deducts and deposits the funds from each employee into a central account, then sends the final donation amount to the paying agent, such as the United Way.
The paying agent distributes the funds to the designated organizations.

Donation Matching Programs

Donation match programs can also be time-consuming and difficult to navigate — so much so, that billions of dollars in matching funds go unclaimed every year. A typical donation match program works like this:

The company determines which organizations will qualify for a matching gift and makes the list of qualifying organizations available to employees, and creates rules to determine the amount of the match. There may be differing amounts depending on the employee’s position or other criteria. For example, all full-time employees may qualify for 100% matching, while managers qualify for 200% matching.
The employee makes a donation to the charity of their choice.
After determining that their chosen organization qualifies for a match, the employee fills out and submits a request to HR for their employer to match their donation.
HR processes the request and determines the match amount based on the rules.
The company sends a check for the matching amount to the qualifying organization.

Emerging Trends in Workplace Giving

Since the early 2000s, there’s been a growing movement to allow employees more choices of donors. Many donation match programs, for example, will match employee donations to any 501(c)3 charity. New platforms are streamlining corporate and employee giving, reducing the amount of work and time that goes into managing workplace giving campaigns and employee giving programs in general.

The newest trends in corporate giving include making charitable giving part of the employee’s benefits package and providing granular control and choice on when and where to donate their funds.

Advances in technology provided new tools — yes, there’s an app for that — to help companies manage and deploy their corporate giving programs in ways that make sense for their workforces. As the workplace and trends in giving continue to evolve, employee giving programs will also evolve to keep pace and provide the most seamless, empowering giving experience.

Benefits of Workplace Giving Programs

Employee giving programs are not just good for the causes that get the donations. They provide important positives for employees, the company, and the community. These are a few of the most important.

Improved Employee Recruitment: 55% of employees — including 75% of Millennials — would choose to work for a socially responsible company, even if they got paid less.
Increased Employee Engagement: Employees are more engaged at work when they feel their employer aligns with their values.
Increased Profitability: Companies with the most engaged workers are 21% more profitable.
Better Public Image: People think more positively about businesses that give back to the community.
Deeper Community Connections: A well-planned employee giving program helps the business connect and cement relationships with organizations in the community.
Increased Employee Loyalty: Employees are more likely to recommend businesses that support them and their interests.
Higher Retention Rates: Employees who take advantage of employee giving programs stay with the company 75% longer.

What Employees Care About

According to a recent Deloitte Workplace Giving survey, 37% of workers donated to charity through a workplace giving program, but — and this is a big but — when they looked at Millennial and Gen Z employees, that percentage skyrocketed to 58%.

Younger workers, those destined for leadership positions of future companies, care deeply about doing good in the world, and they reflect it in their behavior. They donate because they are connected to a cause or charity, because they want to support their community, and because giving makes them feel good.

When you make it easy for them to plant a tree, buy a kid a desk, or adopt sheltered puppies, your company is showing them that they respect and support the people that they are, not just the work that they do for your business.

Why Is Employee Giving Important?

In addition to the benefits to your employees and your business bottom line, employee giving also brings an immense benefit to the community.

In 2021, workplace giving programs raised more than $5 billion, with about 50% of that coming from matching gift programs. Those donations went to

Education related causes: 29%
Health and wellness causes: 25%
Community and economic development causes: 15%

Employees who donated through workplace giving programs reported that they donated to

Hunger and homelessness relief: 47%
Education: 23%
Social and racial equity causes: 20%

The right workplace giving program empowers your employees to support the causes closest to their hearts, without judgment and with the confidence that their employer trusts them to put their money where it will matter the most.

How to Set Up a Workplace Giving Program

If this is your first time setting up a workplace giving program, there are some important steps to consider. You want a program that reflects your company’s mission and core philosophy, one that your employees will embrace and be proud to use. These are some key principles to keep in mind and some action steps to get you started.

Evaluate Your Company’s Corporate Social Responsibility Policy. If You Don’t Have One, This Is A Good Time To Brainstorm.

Create a vision for your CSR that balances your responsibilities to your shareholders/owners, your employees, the community, the planet, and any other stakeholders.
Evaluate your current activities in light of community service. Do you partner with local organizations? Host volunteer activities? Make donations to local charities? Any of these would fit under the umbrella of CSR.
Establish a corporate code of ethics detailing how your company will treat employees, customers, the environment, and competitors in all your dealings.
Get strategic with your giving program to ensure that it aligns with your company’s values and ethics.

Set a Budget for Your Giving Program.

The amount you budget for corporate giving should be no more than you can afford to give without affecting the cash flow you need to operate your business.
Many large companies earmark 1% – 5% of their pre-tax earnings for charitable giving. Small companies often donate 6% or more to charity.
Consider designating profits from one particular product for giving.
Use the Sabsevitz Ante-Up Formula — multiply last year’s pre-tax net income by 1.2% to come up with a donation budget.
Check out more suggestions for setting your budget in this blog post.

Set Up Guidelines for Your Program

Employees: will all employees be included in your benefits program? Will they all be level-funded, or will some positions qualify for a higher workplace giving benefit?
Moments That Matter: Can you make donations more meaningful by tying deposit amounts to specific events in the lives for your employees?
Decide which charities/causes your company will support. Will you restrict employee giving to designated nonprofits? How expansive will your list of eligible organizations be?

Establish A Process For Collecting, Matching, And Donating Contributions.

See the section on How Does Workplace Giving Work?
(Hint: Groundswell takes the stress out of this step.)

Publicize The Program.

The key to a successful workplace giving program is awareness. Your employees can’t use a benefit they don’t know about, and your company won’t reap the benefits if your customers and employees don’t know what you’re doing. These are a few suggestions for raising awareness of your new employee giving program.

List it as a benefit in your recruitment materials.
Provide an easy — and very visible — way to access your program’s front end on your employee website, Discord, or other communication software.
Highlight your program in the company newsletter.
Create and distribute flyers explaining the program, its benefits, and how to use it to your employees.
If you offer donation matches, make sure that local nonprofits are aware of it.
Partner with local nonprofits and community organizations when it makes sense.

Is Workplace Giving Tax Deductible?

The simple answer is yes, in most cases, workplace giving is tax deductible, and has been since 1935 when Congress passed a law allowing corporations to deduct up to 10% of their pretax income on their tax returns. That limit was raised to 25% to encourage more giving during the pandemic.

Maximizing Tax Benefits for Workplace Giving

It’s important to understand how tax-deductible donations work in order to maximize the benefits of a workplace giving program.

Some types of corporate giving offer more benefits than others.

DAFs offer unique tax benefits, but until recently, they’ve been reserved for high-dollar donors. Briefly, a DAF allows your company to make a donation at the most advantageous time — before the end of the tax year, for example — and take the deduction immediately, and decide when and where that money should be donated to nonprofits. In addition, DAFs make it more efficient to donate non-cash assets, such as stock and real estate, to charity, without incurring an additional tax burden.

Workplace Giving with Groundswell

Groundswell’s innovative Philanthropy as a Service model democratizes workplace giving by setting up a Personal Giving Account — an individual DAF — for each employee, effectively putting the power of a DAF in the palm of their hand.

The company can make donations into each Personal Giving Account as part of an overall corporate giving strategy, timing the donations to provide the most benefit. The employee then decides when and where to make donations to the causes that are most important to them.

If you’re ready to increase the impact of your workplace giving programs, contact us to learn more about how Groundswell can empower you and your employees to do more good and make the changes they want to see in the world.

Is Your Donation Matching Program Inclusive and Equitable? Probably Not.

Corporate employee gift matching – where an employer matches an employee’s gift to a charity – has been a mainstay of major companies for decades. It has unlocked billions of dollars of community funding and helped donors double their impact. It’s also inequitable and lacks inclusion as matching programs currently operate. Fortunately, there’s a solution.

But first, a history lesson.

In many ways and for many reasons, GE is one of America’s most iconic companies – though notably its star has dimmed since its peak several decades ago. GE was born of Thomas Edison, became a founding member of the Dow Jones Industrial Average (where it stayed from 1907 to 2018), and was awarded countless patents for innovation across aviation, healthcare, and energy.

However, an innovation GE rarely gets credit for is its innovation in corporate philanthropy. In 1954, GE rolled out what is often credited as the first workplace giving program. In the nearly seven decades since, GE reports that it has matched over $1.5 billion in employee gifts. That’s an astounding number.

Yet GE’s program has not evolved much since inception. Sure, it uses a software platform to help facilitate gifts (one that could use a good ol’ fashioned overhaul) and they’ve probably increased the amount they’ll match (it’s currently a generous $5,000 per employee). But the basic construct remains the same – and therein lies the problem.

Today’s standard matching gift program works like this:

An employee gives money to a charity; they then submit that donation receipt to someone on staff (often in HR, finance, or perhaps a dedicated corporate social responsibility or CSR function). That staff member then must vet the charity to ensure it’s a registered 501c3 with the IRS and that it meets the company’s stated program requirements (for example, many companies won’t match gifts to places of worship – like a church – despite them being tax-exempt organizations). Finally, if all goes according to plan, a form is submitted to the accounts payable department and a check is issued from the company to the nonprofit – often weeks or months later.

Many folks would rightfully point out that this process seems like an administrative nightmare – and it is, both for the employee and the employer. But what’s often not discussed is that it is also by nature exclusionary and therefore inequitable.

How so? Let me explain.

The existing process – even if supported and enabled by software platforms that ease (but don’t eliminate) some of the administrative burden – requires the employee to disclose where they have given to charity. On the surface this may not seem like a problem – how else would the employer know where to send the matching money? But spend a moment and imagine all the reasons that someone may not want their employer or work colleagues to know the specific charities you are supporting.

For many people, their philanthropy is deeply personal and inspired by lived experiences. An employee that grew up in an abusive household may support a local domestic abuse shelter. A member of the LGTBQ community that is not yet open about their sexuality certainly wouldn’t want their coworkers knowing they support the Trevor Project. A recovering alcoholic may not want to submit the receipt for their monthly donation to Alcoholics Anonymous.

So what happens?

They simply don’t participate. They feel excluded.

The inequity is further exacerbated when companies determine that some causes or issues are worth matching, but others are not. In GE’s example, the determination that the company will not match contributions to houses of worship – churches, synagogues, mosques, and others – is akin to telling GE’s employees that what matters to them is not worth matching.

Now, we should be fair to GE. Because of GE’s matching program design, any matches sent to charities are coming from GE. Iconic brands like GE must be very careful in creating a perception that they are affiliated with or endorse any specific organization, or in this case, faith. That’s certainly reasonable – but it’s demotivating to the practicing Catholic who dutifully tithes 10% of her paycheck each week to her church.

(As a disclaimer, we draw the line at any nonprofit, religious or not, that stands for hate, and you won’t find any classified hate groups available to fund in the Groundswell app.)

Essentially, today’s standard matching program makes about as much sense as if an employer chose not to deposit employees’ paychecks into bank accounts, but instead forced those employees to submit receipts for all of their expenses so that their cost of living could be reimbursed. How comfortable would you be with inviting someone into your personal life in that fashion?

So is there a better way? Yes, there is.

Modern matching programs must evolve to reflect the capabilities of our modern tax and financial technology ecosystem. Groundswell (www.groundswell.io) is doing this by making donor-advised funds (DAFs) accessible to anyone, and by specifically creating a corporate benefits platform that provides one to employees. By providing employees with Personal Giving Accounts built on top of donor-advised funds, our platform can disaggregate someone’s decision to be charitable (the moment they contribute to their Groundswell account) from their decision on what charity to support (sending their Groundswell funds to a nonprofit).

With Groundswell, employees contribute to their Personal Giving Account and companies can match those contributions according to their matching program rules. At that point, the employee controls the funds – they can direct the full amount to whatever qualifying charity they choose, when they choose.

Because funds sent to charities are distributed by the Groundswell Charitable Foundation, companies no longer have to restrict where their employees give – because the company is never directly associated with the gift.

Information provided back to the employer is anonymized. They will know all the charities that were supported, but will not be able to associate them with individual employees. The result is that companies can better understand what their employees truly value, without violating their privacy.

With Groundswell, employers can take meaningful action that drives home their commitment to DE&I initiatives while providing a unique employee benefit that allows employees to freely be their authentic, charitable selves.

Let’s have a conversation – what do you think?

Our Founder in Forbes on Rethinking Corporate Donation Matching

We always love to share the Groundswell philosophy with the wider world whenever we can.

Just recently, our CEO Jake Wood shared his insights over at Forbes, talking about why organizations should rethink their corporate social responsibility (CSR) strategies and programs – and how, with this corporate philanthropy overhaul, they can establish a more cohesive relationship with their employees and nonprofit organizations.

Here are some of the highlights from the article:

Corporate Charity Should Represent the Passions of the Employees

Traditionally, corporate giving efforts are driven by a handful of executives or corporate foundations. The efforts are often disconnected from the company and the employees that are supposed to be represented by the program. This, Jake explained at Forbes, results in an ivory tower situation.

“In its best form, corporate philanthropy is loosely aligned to a company’s values, but often not to those of the company’s employees. In its worst form, it simply serves as a CEO vanity project.”

What corporate entities need to realize is that their employees have diverse perspectives and backgrounds. Some, if not all, of them want to find a higher purpose for the work that they do. Unfortunately, traditional CSR programs don’t often reflect that.

Most Nonprofits Don’t Get the Support They Should Be Getting

Jake also pointed out how the current system for corporate donations excludes some nonprofits.

“If employees who want to give feel left out by their corporation’s donation strategy, it’s even worse for the nonprofits meant to benefit from those matching programs. While the top 1% of nonprofits might have cracked the code, most have trouble getting in the door.”

There are a couple of challenges that nonprofits face, even for those who’ve already gotten their foot through the door.

Nonprofits led by historically marginalized individuals or communities often find it difficult to even get the attention of executives or foundation staff.
Even when they’ve been qualified and chosen, most nonprofits still need to go through a lot of processes before they can receive funds, which can either take a long time, or end up with the funds being undispersed.

Jake shares his experience as the CEO of the disaster-relief nonprofit Team Rubicon:

“I once received an email from a major Fortune 500 company eight months after a donation by an employee (in the prior year no less!). The email asked me to confirm receipt of the $75 donation and then to log into an obscure portal to upload proof of receipt so the company’s matching donation could be processed. What a hassle.”

Nonprofits end up chasing donations that are owed to them because of this inefficient processing, instead of focusing on delivering impact to the communities they serve.

Traditional Philanthropy = Low Employee Engagement

Employees are not as engaged in traditional, centralized philanthropy because this CSR can’t please everyone. Your ivory-tower philanthropy may please one or two people, but it will probably not resonate with everyone.

Plus, the systemic approach to giving that companies do doesn’t often result in massive impact and changes. This can lead to employees seeing these efforts as lacking or unapproachable.

Jake points to homelessness as an example:

“Solving homelessness at a macro level requires systemic solutions and massive policy changes, both of which could take years, if not decades. But employees riding to work on the subway care less about systemic solutions and more about ensuring that the human being sleeping on a piece of cardboard near the turnstile they step over each morning has a bed that evening.”

Decentralizing philanthropy would go a long way to achieving that. Sure, systemic changes are necessary, but making employees the “agents of change” in this regard can make them feel that their company’s philanthropy efforts are indeed going somewhere beneficial.

How Companies Can Decentralize Corporate Giving

Jake shared with Forbes the key steps to how companies can decentralize their philanthropy efforts:

Provide a charitable giving stipend to each employee that they can direct to a charity of their choice on an annual basis.
Have employees vote on a slate of charities chosen by leaders to determine which cause gets the company’s contribution.
Empower business resource groups, which are typically aligned around specific diversity elements, to make recommendations on charitable giving related to their interests.

With these steps, companies can generate meaningful impact in their communities through their employees.

To read Jake’s full article, click here. Or if you want to learn how you can start changing your approach to corporate giving, talk to us here. Here at Groundswell, we help you give better.