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?
Workplace giving is any 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. These giving programs take many forms today, including payroll deductions, donation match programs, and volunteer giving 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.
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.
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.
The third iteration of volunteer donation programs rewards your employees with the 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 their time working in their communities.
One way is to deposit the equivalent of their salary for hours spent into a Groundswell Personal Giving Account. From there, the employee can direct the donation to their chosen cause, effectively doubling their impact on the ground.
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.
Workplace giving campaigns are typically annual events companies hold 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.
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.
Programs that collect charitable donations through payroll deductions are the most common 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 the current and year-to-date donations 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 acknowledgment letters from the nonprofits they donate to.
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 much of it to the company's payroll department. Managing a workplace giving campaign is a complex undertaking involving multiple steps and responsibilities.
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:
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.
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.
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 in 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.
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
Employees who donated through workplace giving programs reported that they donated to
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.
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.
Set a Budget for Your Giving Program.
Set Up Guidelines for Your Program
Establish A Process For Collecting, Matching, And Donating Contributions.
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.
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.
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.
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.
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