Whenever we support a charitable cause, it’s always with the hope that our contributions make the maximum impact possible. That’s why corporate gift matching is so important and valuable! Not only does it encourage employees to give back to their communities, but it can double the impact of their efforts.
What is Corporate Gift Matching?
Corporate gift matching is a program that enables company employees to donate to charitable organizations of their choice with the caveat that their employer will match their donation.
This involves a company setting aside a certain amount of money that it will dedicate to matching employee donations. However, it’s important to note that while several companies match donations at a 1:1 ratio, some companies choose to set donation caps in place. For instance, a business may define match limits per employee or opt to match a percentage of donations instead.
How Does a Company Set Up a Matching Gift Program?
If you’re interested in setting up a matching gift program to help your business give back to the community, we’ve outlined some key steps to consider below.
- Determine the goals of the gift-matching program
- Establish clear objectives, guidelines, and necessary program restrictions.
- Consider the types of organizations that are eligible for matching donations, the maximum amount of the match, the types of charitable organizations eligible for matching, and so on.
- Determine the budget and matching ratio
- Establish a budget for the program and decide on the ratio of the match.
- Identify a program administrator
- Designate a person or team to manage the program. Tasks include educating employees about the program, receiving and verifying employee donation receipts, processing matching gifts, and so on. The program administrator may be internal or external to the company.
- o We would love to be your program facilitator! Our team at Philanthropi can help your business efficiently match your employee contributions.
- Promote the program to employees
- Inform employees about the matching gift program, encourage them to participate, and encourage them to share causes they care about.
- Process matching gifts
- Employees should submit proof of the donation to the program administrator, who will verify the donation and process the matching gift. Donation proof can be presented by various means, such as a receipt or confirmation email.
- Evaluate the program
- Periodically evaluate the program to determine its effectiveness in achieving its goals, identify areas for improvement, and make any necessary adjustments.
What Is an Example of Matching Gifts?
So what does a corporate matching gift program look like in action? Let’s take a look at an example of how your business’s matching program might work.
Say that your company offers a matching gift program that matches employee donations to eligible charitable organizations dollar-for-dollar, with a maximum of $1,000 per employee per year.
Your employee, Alex, decides to donate $500 to a non-profit organization that supports a cause important to them. After donating, Alex provides proof of the donation to the program administrator, whose job is to verify the donation complies with the company’s gift-matching rules and guidelines. This might include confirming the nonprofit’s eligibility or that Alex has not reached their annual maximum matching limit.
The administrator then processes a matching gift of $500 from the company—for a total of a $1,000 donation—and sends it directly to the non-profit organization.
Why Do Companies Have Matching Gift Programs?
The thing is, it’s hard to find many downsides to setting up a corporate gift-matching program. But it sure is easy to see all the positives!
Corporate matching gift programs encourage employees to support charitable organizations and give back to the community while also demonstrating the company’s commitment to philanthropy.
Not to mention all these other benefits!
Employee Satisfaction
Matching gift programs can help to engage employees in charitable giving and increase their job satisfaction. Employees appreciate when their employer supports causes they care about, and matching gifts can serve as an incentive to give.
Corporate Social Responsibility
Companies want to be seen as socially responsible citizens, and matching gifts can help demonstrate their commitment to the community they serve
Recruitment and Retention
A matching gift program can be an attractive benefit for both prospective and current employees. It’s more likely for an employee to stay at a company that offers a range of benefits, including those that support their philanthropic interests.
Increased Impact
Matching donations can significantly increase the amount of money going to a charitable cause which can enhance the donation’s impact.
Positive Public Relations
Matching gift programs can generate positive publicity and enhance a company’s reputation. This can help attract customers, investors, and other stakeholders who want to do business with companies that align with their values.
Are Corporate Matching Gifts Tax Deductible?
For businesses in the U.S., corporate gift-matching programs present tax deduction opportunities, which is just one more reason to set up a program for your business.
Cash payments made to charitable organizations are eligible for business expense deductions, and charitable contributions are eligible for income tax deductions. However, these deductions are subject to eligibility requirements and regulated limitations.
It’s important to note that the tax laws governing charitable donations and deductions can be complex and may change. We suggest consulting with tax advisors to ensure compliance with applicable tax laws and regulations.
How Do You Ask a Company to Match Donations?
Although money can feel like a taboo topic, there’s no reason to hesitate when it comes to bringing up donation matching at work.
Here are a few tips you can keep in mind:
- Before asking for a donation match, research the company’s matching gift program and policies. Review the company’s website and employee platform, or contact its HR department to learn about program guidelines and restrictions.
- Gather proof of the charitable organization’s eligibility for gift-matching and proof of your donation.
- Follow company instructions to submit your matching gift request. For example, many companies require employees to submit requests online or via a paper form.
- Follow up with the company’s HR department to track the status of your gift-matching request.
What Is the Difference Between a Match and a Challenge Gift?
A matching gift and a challenge gift are both types of donations in which a donor offers to give a certain amount of money to a charity, but there are some critical differences between the two.
Matching Gift
As we’ve established, a matching gift refers to a donation made by a company that matches the amount of money donated by an employee.
Challenge Gift
A challenge gift, however, sets a specific fundraising goal that must be met in order for the gift to be made. Meaning, a company’s donation is contingent upon the recipient organization raising a certain amount of money from other donors.
For example, a donor may offer to give $10,000 to a nonprofit organization if the organization can raise an additional $20,000 from other donors.
Are Matching Gifts Effective?
Corporate matching gifts are a great way to encourage giving back to the community and an effective way to encourage future donations. Employees are more likely to continue giving when they know that their employer values their charitable contributions and is willing to match them.
Additionally, donors that know their employer will match their donation may be more likely to give a larger amount than they would have otherwise. In turn, corporate giving programs can significantly increase the total amount of money donated to a charitable cause and drastically boost donation impact.
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