7 Facts About Workplace Giving Effectiveness
Approximately $5 billion is raised through workplace giving annually – much of which is unrestricted, sustainable support that enables charities to deliver vital services throughout the nation. Workplace giving is one of the most cost-effective and safe ways to donate to charity. Why?
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Strategic: While a direct cash gift is always appreciated by charitable organizations, they can’t rely on these donations as a source of income because they are unpredictable. However, if you pledge a donation to your charity choice through your workplace via payroll deduction, the charity knows how much money you’ve pledged, for what period of time and how frequently they will receive the funds. Because that charity knows how much money you have pledged, the charity can plan how to use your donation more strategically and make a stronger impact.
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Sustainable & Secure: Your $10/week donation could help a charity win a $10,000 grant! Grantors and special program funders want to know how much risk is involved in granting money to charities. If a charity needs $100,000 to fund a program and applies for a $10,000 grant, the grantor will want to know how the charity will get the other $90,000 to run the program. If the charity doesn’t know (or can’t guarantee) where the rest of the money will come from, the grantor may decide that giving a grant to the charity isn’t a safe investment. With money pledged by individual donors through workplace giving payroll deduction campaigns, the charity can prove to the grantor that they have enough money to run the program, and will earn the funder’s trust as a “low-risk” candidate to receive the $10,000 grant!
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Reduced Administrative Costs: Donors want as much of their money as possible to go directly to the cause they’re supporting. Wanting 100% of your donation to go directly to programs is highly understandable, however, processing donations costs money regardless of the charity you support. Workplace giving donations dramatically reduce the administrative cost for charities, and that is why many credible and highly effective charities have become members of organizations like America’s Charities. In fact, America’s Charities was founded and created by charity organizations that wanted to raise money through workplace giving programs and to have an organization like America’s Charities to process the donations. Rather than make a charity process thousands of individual donations, America’s Charities processes and combines all of those individual donations into one lump-sum check, which is much easier to manage and quicker for a charity to use. In addition to processing pledges and distributing the funds to the recipient charity organizations, America’s Charities provides a variety of services that add value to charities, helping them to operate efficiently, effectively and within compliance.
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Payroll Contribution: There are many ways to donate through a workplace giving campaign, including credit card, check, stock, vacation hours and cash; however, giving through recurring payroll deduction is most effective. Fees are applied when you donate via credit card or check, so less of your donation actually goes to the charity. By giving through recurring or one-time payroll deduction, your donation is automatically deducted from your paycheck, there are no extra fees and because employees’ payroll donations come out of their after-tax earnings, their donation is tax-deductible. Recurring payroll deduction allows you to spread your pledge over the course of a year, in smaller, more financially manageable amounts to be deducted from your paycheck.
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Matching Gifts: If you donate $500 to a charity outside of an employer-sponsored workplace-giving program, that $500 donation remains $500. That’s great, but it could amount to more. Often times companies will offer to match gifts made by employees either dollar-for-dollar or a percentage like 50%. So if you donate that same $500 through your workplace giving campaign instead of outside of it, that $500 can easily become as much as $1,000 that your designated charity receives. Read “Matching Gifts: The Definitive Guide for Employers” and “Matching Gifts: The Nonprofit’s Guide to Raising More Money.”
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Low-Cost Way to Fundraise: It costs money to raise money. Fundraising expenses are a necessary evil for charities, however, workplace giving is more effective and efficient than many other forms of fundraising like special events and direct mail campaigns. Events like 5k walks and relay races are fun and are a good way for charities to raise awareness and educate the public about their programs, but it costs a lot of money to implement (e.g., rent or purchase equipment and space for the event, food, entertainment and promotional items like t-shirts). While events typically require attendees to pay a registration fee, a large portion of that fee is used to cover expenses to host the event. Direct mail is equally as expensive to print and mail, and is less effective now in driving a response than it was a decade ago. Current reports show a response rate for direct mail to an existing customer is averaging just 4.4%.
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Safe Charitable Giving: With media coverage about some charities not meeting up to standards or not considered trustworthy, it’s natural for donors to be more cautious about their giving choices. That’s why companies partner with organizations like America’s Charities. America’s Charities members are IRS registered 501(c)(3) charities that are “vetted” annually and meet high standards for inclusion in the U.S. Federal Government’s Combined Federal Campaign (CFC) and other public sector workplace giving campaigns. By partnering with America’s Charities and our partner organizations, companies can provide employees with charities that can be trusted by donors. And as an individual donor, you can be confident about the charitable choices you make.