This post was featured in Forbes.com
Telecommuting, competitive pay, stock options, extended vacation time, a gym, catered lunches and other attractive benefits will get talented recruits to come work for your company. But once they’ve arrived, how do you keep them?
Much of the time, the cause to stay is…cause.
Human resources professionals increasingly recognize that one of the most important components of any employee retention strategy is a diverse corporate volunteer program that reflects the values of its employees. Implementing an internal employee giving and corporate volunteer platform with a variety of non-profit choices allows workers to conveniently support the causes that are near and dear to their heart.
And when a company offers matching contributions for every donation an employee makes, the message the company sends to the employee is “I care about what you care about.”
A matching gift program benefits the cause, the employee (who feels supported) and the employer (who benefits from increased employee engagement.) For non-profits, studies have shown that matching gifts serve as an incentive in fundraising appeals and lead to increased donations. And for employees, a matching gifts program is so attractive that it can be seen as part of an employee’s total compensation package.
In their 2011 survey of corporate giving, the Committee Encouraging Corporate Philanthropy (CECP) found that in 2010, 94% of companies offered at least one matching-gift program averaging $1.70 million in total matching funds. From 2009 to 2010, 57% of companies raised the dollar amount donated to matching gift programs. Also in 2010, 40 companies added a disaster relief matching program that they didn’t previously have and the average percentage of matching funds allocated to disaster relief matching programs jumped up from 1% in 2009 to 7% in 2010. This huge increase reflected a shift in priorities as companies instituted mechanisms for employee donations in response to catastrophic events.
Businesses can match their employees’ charitable gift-giving in many ways. The most common approach is simply by matching a single donation or recurring donations (such as payroll deductions) dollar for dollar. A company can also match the full amount raised by staff through a company fundraiser. Company matches get creative when businesses make a donation to match every hour an employee has volunteered for a charity – a concept known as ‘dollars for doers‘. According to the volunteering study Volunteering in America by the Corporation for National and Community Service, around 62.8 million Americans engaged in volunteer work totaling 8.1 billion volunteer hours in 2010. These hours were valued at $173 billion, but some of these volunteers were also able to translate their volunteer time to actual charitable donations through volunteer grants from their employers.
As a spectacular example of matching in action, one need look no further than Microsoft, the largest contributor of matching gift and volunteer grant funds. In 2011, Microsoft matched $44.3 million in employee monetary donations, and then on top of that gave an additional $5.6 million as a result of the 383,000 volunteer hours logged through the company’s employee volunteer program. Combined, the company donated $48.9 million solely through the company’s employee giving programs, with matching gifts representing a significant source of the staggering $100.5 million raised for more than 18,000 U.S.-based community organizations in 2011. With this milestone, Microsoft employees have now raised more than $946 million for nonprofits and community organizations since the company’s giving program started in 1983.
But you don’t need to achieve Microsoft-level milestones in order to see the employee engagement benefits of matching gifts programs. So if you’re thinking of implementing a matching gifts program, according to theCouncil on Michigan Foundations, here are three key questions to address before you get started:
1) What kind of charities do we match? Companies need to identify what issues or organizations they will support and define the boundaries. Ultimately, of course, this will reflect on their corporate persona.
2) Which employees are eligible? Generally, most full-time employees qualify for a company’s matching gifts program, but some companies have extended their program to retirees. It’s also important to set minimum and maximum amounts so that employees know the limits.
3) How will the match be paid out and what is the process? Articulating a process for managing your matching gifts program – ideally integrated within an online volunteer and giving platform – helps both the non-profit and the company account and plan for their fiscal year. A designated person or department needs to be assigned to communicate with the employees and the recipients as well as administer the program.
Finally, since state and federal laws change regarding charitable contributions, companies should always have their legal counsel as well as tax professionals review their matching gifts program. Who knows…perhaps in addition to the feel-good philanthropy of a corporate matching gifts program there also might be potential business tax deductions.