Why Do Companies Match Donations?

why do companies match donations
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Employee donation matching is one of the most powerful ways to begin a new fundraising effort. Not only do you open up a new platform where employees can pick and choose their donations, but you promise to double the donation. 

Do that, and you’ll likely see charitable contributions at your company go way up. But what’s the psychology behind this, and why is it crucial for companies to match donations?

What is the Point of Matching Donations?

As it turns out, there’s not one point–there are lots of points.

  1. Make an Impact:

For starters, matching donations creates more engagement for the campaign itself. Fundraising and giving programs can’t effectively accomplish their goals if they don’t pique the interest of employees. And announcing that you’ll match some or all of the employee donations is a powerful way to make sure you achieve that goal.

  1. Energize Employees

Another reason to match donations through giving programs is that it leads to more employee satisfaction. Employees who see company matches will see that your company cares about its employee engagement. The majority of employees surveyed said it was important to them to work at a company like that. And 88% of business leaders believe employee engagement is central to attracting and retaining top talent. You don’t have to be a nonprofit organization to see the benefit of keeping employees happy. Happier employees are loyal employees, which minimizes employee churn and improves morale.

Your giving programs are more than mere fundraising, however. Company matches are effective ways to build up the culture at your company. And corporate giving programs demonstrate that you don’t just care, but you’re willing to put down real money to support your employees’ efforts.

Who wouldn’t want to work at a place like that?

Are There Tax Benefits in Companies Matching Donations?

There is a tax benefit when you donate to a qualified charity. In fact, you’re probably already familiar with it. Donating that money to charity can be deducted from your income, which means that your tax liabilities would potentially be less than if you had sat on that money. And that’s to say nothing of the benefits you create to the charities who receive your generosity.

That’s not all. Although you’ll want to consult with qualified accountants, here’s what you’ll need to know:

  • There is generally a 10% giving limitation on the amount to which your company can deduct charitable contributions from its income.
  • According to Chron, matching donations is an exception to this cap. This would mean that you can still create excess donations that go above the cap, potentially creating more significant tax incentives.

It’s true: when you double the donation of an employee, that money is no longer in your pocket. It’s gone to charity. But with the tax benefits and the additional boost in employee engagement you’ll get, you’d be surprised at how beneficial a charitable donation can be for your company. And speaking of employee engagement…

Can Matching Donations Help With Employee Engagement?

Corporate matching gift programs have the obvious benefit of stimulating employee response. After all, the goal of corporate social responsibility is to create employee engagement when you’re launching a charitable campaign for eligible nonprofits. By creating a donation matching program for employees, you’re building a foundation for a strong culture of giving.

As it turns out, this approach to corporate philanthropy can have some efficient effects on employee morale. Simply put, employees like working at places that care. It provides meaning to the work they do when your company shows that it cares about educational institutions, for example, or qualified nonprofit organizations. And employees’ donations feel even more important when they know that you’ve made a promise to double the donation – they know their gift has been amplified.

Donors at your company will make match-eligible donations first because they know about that amplification effect. But something else will happen, too. People respect a company that matches donations because they know their company is committed to making an impact by matching gifts. By creating more matching gift opportunities for your employees, you’re also demonstrating your deep commitment to charitable causes. 

Did you know that nearly 90% of business leaders believe that effective employee engagement helps not only attract but retain employees? That means that when you create a donation form or a donation page for your matching program, you’re doing more than putting money toward charity – you’re using additional resources to engage employees and find connections with them on a deeper level.

Yes, you can do a lot to help nonprofits. But creating a program like this will help you, too.

Making Your Next Charitable Outreach Program Work

What are the next steps? The top matching gift companies systemize the process. By finding a way to automate your donations of the match amounts, you can immediately create a donation program that employees will love.

We know that sounds difficult, but it doesn’t have to be with a platform like Millie. You won’t have to do complicated math like figuring out the “match ratio,” and you won’t have to create a matching gift database from scratch. Instead, you can use our platform to filter out corporate-appropriate charity organizations. Then, letting your employees use the search tool, they can find the specific charity of their choice from a predetermined list—for example, if you wanted to make a direct impact on local food banks, you can specify that in the search criteria.

Donations are tax-deductible for companies, but only up to a certain amount. However, when you create a donation matching program, you can unlock all sorts of possibilities and benefits for your company. You can increase the engagement of your current employees. You can go dollar-for-dollar with their donations, showing them how much you care. And you can inspire more loyalty than ever from your employees, who love to know that they’re working for an impactful company.

From board members to former employees and retirees, everyone can champion an excellent charitable contribution project. Promote your efforts on social media, tell employees about the dollar-for-dollar contributions, sure. But also make sure you’re working with a platform that can make it all possible – Millie’s got you covered.