When you or your employee donates to charity, where does it go? If you use a legacy platform like Benevity to manage employee giving and donation matching, the answer is probably to a sort of “waiting room.” While those funds will eventually reach their recipient, they’ll sit in waiting for at least a few weeks or months.
There’s a donation distribution problem impacting corporate philanthropy that you might not know about. In addition to increasing the time it takes for donations to reach nonprofits, this issue also limits the benefits of giving. As a result, distribution timelines matter – and they matter a lot more than you might think.
In a perfect world, nonprofit organizations would receive donation funds almost instantly. But in reality, they often don’t see the money that employees and companies contribute for several months.
Those few months can be crucial for nonprofits for a few reasons. Donations sent in response to a new initiative or call for funding may take so long to reach nonprofits that they end up being too late to support a specific project.
And since donations to charity tend to ebb and flow throughout the year, there are undoubtedly times when nonprofits need extra support – and times when an influx of funding is important or expected. While nonprofits can generally always benefit from receiving funds, unexpected donations can make planning the best use of those funds difficult.
This may not be a large concern for individual donations or small contributions. However, when you consider that corporations were responsible for about $36.55 billion in donations to nonprofit organizations in 2023 – a 3.0% increase from 2022 – it becomes clear why a slow timeline can have significant effects.
Many companies that donate most often and heavily to nonprofit organizations rely on legacy platforms like YourCause, Benevity, and Cybergrants to manage distribution. Each of these platforms, however, tends to take about 30 to 60 days to send a donor’s contribution to charity.
This timeframe gets even longer when a company’s matching gift comes into play, too; it typically takes 90 to 180 days to get sent.
So, why does this issue exist? What is it about these legacy platforms that cause consistent slowdowns in the distribution process? There are a few key factors at work here.
Perhaps the main culprit behind slow distribution timelines is the process most platforms use to distribute donations: aggregate batching. In other words, platforms wait to send donations until the end of the month (or another pre-defined period ends) instead of when they come in one by one.
That means that all of the donations employees and companies make within a period reach the receiving organization at the same time, regardless of when they were actually submitted.
Again, this may not seem egregious at first glance. But the truth is that this method is only truly advantageous for the platform itself. The process of submitting aggregate batches of donations usually looks something like this:
In this scenario, not only does it become difficult to track and separate individual employee contributions, but it also is all but impossible to ensure funds reach an organization in a timely manner. Employee A’s contribution, for instance, may not reach the nonprofit for over 45 days!
Another problem legacy platforms present that often goes hand-in-hand with aggregate batching is having a minimum donation threshold. The platform in question won’t process the distribution of funds until a minimum amount has been designated and met.
However, this system once again benefits the platform itself but not necessarily the businesses that use it (or the organizations to which they donate).
In many cases, a donor’s money may sit for months or even years as a “pending payment.” The money may not reach a charity at all unless other donors contribute enough to reach the threshold.
When employee contributions aren’t actually able to reach their intended recipients, many of the benefits of employee giving and corporate donation matching – such as increased employee engagement and satisfaction – begin to lose their value.
A main selling point of many legacy platforms is the ability to effortlessly match employee contributions. But in reality, the processes these platforms use tend to create an undue administrative burden for companies.
The process gets even more complex (and, therefore, likely to slow distribution timelines down) when donation matching comes into the mix.
Returning to our example from before, let’s assume that Employees A, B, and C all work for the same company (Company A) and that their company offers a donation matching program.
After the legacy platform sends the company’s $100 contribution to charity, it sends Company A an invoice for the match amount owed. If donations were made in May, the invoice may not be sent or received until late June.
Once the invoice arrives, Company A will review and reconcile it. This process usually takes at least a week or two. Next, once the invoice has been approved, Company A sends its $100 match to the legacy platform. At this point, it may have been two months or longer since the employees made their contributions.
Now let’s imagine that another company (Company B) also offers employee donation matches but has net-60 payment terms. In this same scenario, Company B may not send its $100 match for several months after contributions were initially made.
In both cases, employees who made their donations may not see their funds actually reach their charities of choice for several months – sometimes even longer. And companies are left to navigate administrative tasks like reviewing invoices or trying to track individual employee donations.
Essentially, no one wins under the system that most legacy platforms rely on.
The truth of the matter is that legacy platforms don’t deliver donations as quickly as you or your employees might expect. But there is an alternative.
Groundswell was created to address the donation distribution problem and create a fast, accessible, and affordable employee giving platform. After founding and spending years of work on a nonprofit organization of his own, Groundswell CEO Jake Wood saw a clear need for technology that would not only address the distribution problem but also democratize philanthropy.
Legacy platforms are inefficient, but they’re also expensive. But we don’t believe that giving, donation matching, and supporting causes you care about should be a luxury reserved for the extremely wealthy.
All companies – no matter how large or small – can leverage Groundswell’s platform to make a difference. We believe in streamlining the process to save you time and resources but also to ensure that more nonprofits receive the funding they need.
Groundswell’s dedication to social impact shines through everything we do, including the way our platform operates. Groundswell was designed to do things that legacy platforms can’t or won’t, including:
With Groundswell, you can say goodbye to the headache of monthly invoicing and reconciliations. You don’t need to have a team of hundreds to make a difference, either. And with the lowest fees on the market, Groundswell is the most accessible solution for companies looking to give back.
Whether you currently use a legacy platform or are new to employee giving and donation matching, Groundswell is here to help you make your goals a reality. We’re defining what it means to be a modern philanthropist with intuitive technology solutions that make supporting charities easier, faster, and more fun.
Groundswell empowers you to launch campaigns in minutes, track key metrics without any extra effort, and build a giving program that grows with your business.
Want to learn more about our platform? Book a demo with us today to get a more in-depth look at how we’re changing the landscape of corporate philanthropy.
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