1. Is the employee experience mobile or desktop based?
Why flexibility matters
Today’s employees expect modern technology to support their professional and personal lives.
Giving platforms should have elegant user interfaces and intuitive user experiences that feel familiar. Increasingly, solutions should be mobile-first, with native applications available in both Apple and Android stores.
A recent Forbes article indicates that 93% of Gen Z and Millennials manage their finances on their phone, while even Gen X clocks in at 81%.
Additionally, desktop applications are impractical for companies with large low-wage or desk-less workforces. Many workers do not work at computers, and many households do not have PCs. However, it’s estimated that 87% of adults have a smartphone in the US.
Key questions to consider
- Is the platform web or mobile-based?
- If mobile-based, what are the app’s ratings and reviews?
2. Do employees have privacy in their giving?
Why privacy matters
In an increasingly polarized world, employees are hesitant to disclose what charities they support for fear of being alienated in the workplace.
Many platforms have administrator roles that have total visibility into where every employee has given – even the CEO. Lack of privacy exposes companies to the risk that this information can be weaponized.
Furthermore, for many individuals, their philanthropy is profoundly personal and informed by lived experiences.
For example, an employee that struggles with alcoholism may support Alcoholics Anonymous monthly but wouldn’t want to disclose that to their employer. By not providing employees with privacy, some platforms force employees to make a choice; uncomfortably participate in their company’s giving program or not participate at all.
Key questions to consider
- Who can see where individual employees have donated?
- Can an employee maintain privacy in their donation?
3. Does the platform provide maximum choice for where employees can donate?
Why choice matters
30% of employees say they don’t participate in their corporate giving program because they cannot find the charity they want to support on the platform.
Often, platforms will exclude religious organizations, even though religious organizations represent the largest recipient of individual giving in the United States.
In this regard, companies need to understand that many households support houses of worship for reasons beyond faith. For example, many employees receive emotional or marital counseling, food assistance, and childcare through their house of worship.
Other examples of exclusions include hot-button issues, such as women’s reproductive rights or police reform. Ultimately, companies hoping to build inclusive cultures should build inclusive giving programs.
To that end, inclusion begins with inclusion, not exclusion.
Related, many companies fear becoming directly associated with the charities their employees are supporting since many platforms send a company’s match in the name of the company. This direct association between company and charity is why companies exclude charities from their giving program.
Key questions to consider
- How many nonprofits are eligible to receive a donation?
- Does the platform facilitate donations to tax-exempt non-501(c)3 organizations, such as Parent Teacher Associations (PTAs) or local schools?
- How many international organizations can the platform disburse to?
- When an employee match is sent, is the company directly affiliated with that match?
4. Does the platform provide employees with ownership of their donor-advised fund?
Why ownership matters
The percentage of individual giving in the USA sent via donor-advised funds, or DAFs, has dramatically accelerated over the past five years. It’s estimated that their use increased 29% year-over-year from 2017 through 2021.
DAFs are tax-advantaged charitable giving accounts that historically have been only available to high-net-worth clients at exclusive wealth management firms. These funds typically required $10,000 minimum account balances to open and were expensive to maintain.
Having a donor-advised poses a significant opportunity for an employee to streamline both their personal and workplace giving as well as capture additional tax advantages, such as the ability to donate appreciated stock. Providing employees with a DAF also allows an employee to take their giving history and account with them if they leave a company, similar to their other tax-advantaged benefit accounts like their 401k or HSA.
Nearly all legacy employee giving platforms cannot provide employees with a donor-advised fund and instead sell software that automates employee matches. However, using a DAF not only provides the employee with additional tax advantages, it also allows for a novel new approach to employee donation matching.
Key questions to consider
- Does your platform provide employees with a DAF?
- Can employees contribute non-cash assets such as appreciated stock or crypto through the platform?
- Does the platform provide a single consolidated tax receipt for reporting purposes?
5. What are all the costs, including hidden fees, associated with the platform?
Why cost matters
Most providers charge a wide range of fees to their customers. Some of these fees are one-time, some are annually recurring, others are monthly, and finally, some are ad hoc.
First, most legacy platforms assess an implementation fee that approaches the actual annual licensing cost of the platform. These implementation fees range from $25,000 to $45,000 and reflect the significant cost and complexity of getting a giving program up and running on their software.
Second, platforms will charge an annual license fee, typically based on the number of employees eligible for a company’s giving program. What’s more, each platform will price this fee differently, and most platforms will provide significant price breaks as the employee count increases.
Where platforms begin to see a significant divergence in cost is in their donation transaction fees.
Most legacy platforms assess a 3% transaction fee, with some charging 5-10%. These fees are assessed in addition to credit card transaction fees, typically $0.30 + 2.9%. Some companies choose to cover the cost of these fees for their employees, which leads to a complicated monthly invoicing process and a significant increase in accounts payable burden.
Groundswell offers the lowest transaction fee in the space at 1%.
Additionally, as legacy platforms have been taken over by private equity, customers have seen a rash of new fees for everyday program activities.
For example, some platforms will assess a charge per paper check sent to charity if the funds cannot be distributed electronically. There is a fee if a company requests that a donation be sent off-cycle or if an admin wants to create a campaign. Want a custom data report? That’ll be a fee.
Finally, some platforms claim to take “zero transaction fees.” This is often a misrepresentation of what is truly happening.
Some platforms partner with third-party distribution networks, such as Network For Good, for all of their donation distribution. While the platform may not assess a fee, its third-party network will certainly be.
It’s important for companies to dig into what the distribution process looks like and attain a full picture of how many fees are being assessed from start to finish.
All of the above leads to significant cost uncertainty for customers. It is impossible to budget for an employee giving program because there’s no clarity on what the total cost will be. Customers should ensure that they maximize cost certainty, not just low cost, in their evaluation process.
Key questions to consider
- What are your implementation fees?
- How long does implementation take?
- What are your annual licensing fees?
- What are your transaction fees for domestic and international donations?
- Do you use a third-party to distribute donations, and what is that party’s fee structure?
- Do you charge fees if a donation must be sent by check?
- Do you charge fees for any of the following customer support activities?
- Establishing a custom campaign
- Running data reports
- Off-cycle donation distribution
6. What is the platform’s timeline for distributing funds to charity?
Why speed matters
Most platforms take months to move employee donations and corresponding matches to charity. These delays cause two issues.
First, many nonprofits operate on razor-thin budgets, and waiting for funds causes unnecessary challenges to their service delivery.
Second, you can imagine a senior executive making a substantial contribution to her favorite charity only to show up at that charity’s annual gala two months later and learn that they have not yet received the funds.
There are a few reasons for these delays. First, most platforms aggregate employee donations at the end of the month and send a single payment to the charity. However, most legacy platforms do not send the money to the charity until that aggregate amount has met a certain threshold – say $100. That means that if an employee donated $20 to his favorite charity, those funds may not be sent to the charity until other employees donate an additional $80 to the same charity. This means that the first employee's donation may not be sent for several months – if at all.
Next, because of the way that legacy platforms facilitate their company match, an employee’s donation match may take an additional two to four months to reach the charity. This is because these platforms must perform the following steps to execute the match:
- Reconcile all donations made by employees in the prior month
- Invoice the company for this match total
- Companies often have net-30 or net-60 payment terms for vendors, so the platform will not receive the matching funds for one to two months
- Once received, legacy platforms must wait for all payments from all customers to streamline single payments to charities
- Finally, the platform can send the matching funds to the charity
These delays are often happening behind the scenes, unbeknownst to the employee. However, if known, the employee would certainly be disappointed to learn that their match is delayed so significantly.
Key questions to consider
- Do you aggregate donations and make single payments to charity?
- How frequently do you make these payments?
- On what day following the month-end close do you distribute funds?
- What is your process and timeline for invoicing match amounts?
- Do you have a threshold to meet before a donation is distributed?
7. What is the platform’s reporting capability?
Why reporting matters
Many customers are eager to report to stakeholders, such as the board, senior executives, the total workforce, investors, or customers, on the outcomes of a corporate social responsibility (CSR) program. However, many platforms fail to provide customers with real-time, comprehensive data.
Modern platforms should have live, interactive dashboards that can immediately highlight key program metrics for administrators. Admins should also be able to easily access more granular data files that enable them to run customized reports in their business intelligence tools, like Tableau or PowerBI.
Key questions to consider
- Do you have a dashboard with real-time data?
- How many admin portals must be logged into to access all available data?
- Is data anonymized, or can admins see which employee donated where?
8. What is the ongoing monthly administrative burden of the platform?
Why workload matters
Companies purchase corporate giving platforms to avoid or eliminate the burden of manually administering an employee giving program. However, while legacy platforms can automate some of those associated tasks, many still require significant monthly administrative work to maintain.
This is significant because, in most companies, managing the CSR program is a secondary responsibility for an employee whose primary focus is on a different business area.
Any administrative burden is a reduction to this employee’s productivity. Further, even within corporations with dedicated CSR teams, the more that these teams can focus on building giving back to the company's culture, instead of mundane monthly reconciliations, the better.
These administrative tasks fall into two categories.
First, some administrative tasks are avoidable with a more modern platform. Examples include monthly payroll giving administration and reconciliation or monthly invoicing for employee matches. The second category is those tasks that are unavoidable but are unnecessarily complicated. Examples might include creating a campaign or sending a one-time charitable gift.
Key questions to consider
- How many invoices will need to be processed monthly?
- What is the process for administering payroll giving?
- How many clicks does it take to set up a gift or match program?
- Does the administrator need to approve each match?
- How many clicks does it take to set up a company campaign?
- What does monthly match reconciliation look like?
9. What is the platform’s customer service model?
Why customer service matters
Many legacy platforms have come under private equity ownership in recent years. As is often the case, these new owners have looked to substantially reduce costs.
In early 2023, Benevity and Cybergrants announced significant layoffs, with reductions primarily hitting customer-facing roles like support and success.
Companies should be able to expect to have a dedicated account manager who oversees their account and is reasonably reachable by email or phone. Companies should view global inboxes, obscure ticketing systems, and other impersonal customer service approaches with caution.
Key questions to consider
- Does the company provide dedicated account management?
- Over the past 12 months, has the company increased or reduced its investment in customer service?
- Where are customer service representatives located?
- What is the average response time for a customer support request?
- What percentage of issues are resolved on “first touch”
10. What is the platform’s security posture?
Why security matters
Cybersecurity should be top of mind in any business software selection process. Many corporate giving platforms have failed to achieve SOC 2 Type 2 certification, the gold standard for IT security.
For example, several companies that have undergone substantial acquisitions have a patchwork of security certifications across their suite of products. One or two of their products may be SOC 2 Type 2, while others are Type 1 or have failed to achieve any level of SOC 2 compliance.
Because some companies will obscure the true breadth and depth of their compliance with SOC 2 Type 2 certification, it is critical that companies conduct thorough due diligence in the buying process and engage the necessary IT professionals to evaluate a platform’s vulnerabilities.
Key questions to consider
- What level of cybersecurity certification does the platform maintain?
- Have all components or modules of the platform achieved this certification?
- Has the platform had a breach of customer data in the past 5 years?
- Does the platform perform third-party penetration tests?
- Is data encrypted in transit and at rest?
