Prospective employees and nonprofit organizations alike perk up when they hear the words “donation matching,” and for good reason. For nonprofits, donation matching is an opportunity to double the resources they receive. For employees working for businesses that invest in donation matching as part of a corporate social responsibility (CSR) strategy, it represents a shared commitment to making the world a better place. What’s not to love?
Well, several things – potentially. You’ll never hear charities complain about money, but what if the money doesn’t reach them until weeks—or months—after donors open up their pocketbooks? And how much does the mountain of paperwork dampen the enthusiasm of companies’ corporate social responsibility (CSR) professionals?
Some people look at these issues as good problems to have, but a problem is still a problem.
To understand why these challenges occur, though, we first have to understand how employee donation matching actually works.
Companies often start employee donation matching programs to get in on the ground floor of CSR. The premise is simple: a business announces to its employees that it will match individual donation amounts to certain charities or nonprofits. If your business wants to up the ante, you could consider raising the matching ratio from 1:1 to 2:1 or even higher.
Many donation matching programs are time-bound, meaning companies only pledge to match employees’ contributions for a limited time. In other cases, companies might have donation matching programs year-round but cap the amounts they will match.
The most apparent benefit of employee donation matching programs is having a positive impact on the community. What’s more, consumers are more cognizant than ever about spending their dollars with companies perceived to be socially responsible.
The benefits don’t stop there, though. You might begin to see a positive change among your coworkers, as well.
Employee engagement is almost always a challenge for businesses today, and CSR programs can be a great way to combat that problem. A solid majority—84%—of people in one survey reported that they would be more likely to donate if they knew their employer or another entity would match their contributions.
Having engaged employees can trickle down to your company’s bottom line. Studies show that companies are more productive—and more profitable—if their employees feel fulfilled. You might even see lower turnover rates, which is always a money saver.
One of our primary motivations for changing the way CSR works came after witnessing the old way employee donation matching used to go down.
We found that many legacy CSR platforms used an aggregate-based reimbursement method for donation matching.
Aggregate matching means that most software vendors compile all employee donations at the end of each month before sending the corresponding portion to charities. That means an employee of XYZ company who made a donation on the first day of the month must wait at least 30 days (in the best-case scenario) before their charity of choice gets the money.
Things can get even more convoluted when the reimbursement method for corporate donation matching rears its head. After aggregating employees’ donations, legacy CSR platforms usually just send an invoice to companies requesting the matching amount. These invoices have to go through accounts payable for reconciliation.
Depending on the company and its invoice payment terms (often 30 or 60 days), the charities expecting matched donations might receive the money three months after the original employee donation.
The delays can drag on even longer if companies have minimum donation thresholds, wherein they won’t even start processing or matching donations until employees give a certain amount. Having donations languish in that kind of purgatory is neither efficient nor impactful.
Fortunately, there are better ways to conduct employee donation matching programs. Groundswell saw that charities were having difficulties planning outreach endeavors without knowing when they’d receive pledged money or how much they’d end up receiving at all.
One solution Groundswell implements is instant donation matching and 24 hour distribution timelines. Instead of aggregating monthly donation amounts, we figured everyone would benefit from timely reporting and lightning-fast distribution timelines.
What does that mean for your company’s CSR initiatives? For one thing, it means you won’t get a ton of administrative tasks at the end of each month or invoice payment term. Why not take advantage of the now and send charities the entire amount (employee donation plus corporate matching) as soon as possible? Like, within 24 hours?
Timeline transparency works wonders for employee morale when their favorite nonprofit or charity is involved.
Many charities see the biggest amount of donations in the wake of natural disasters or other times of acute need. Nonprofits are hard-wired to take advantage of the time window immediately after disasters to reach optimal outcomes.
Without instant donation matching, nonprofits’ abilities to plan and execute programs can be severely hampered. Donations that take months to reach intended recipients might be rendered useless as needs change and wane. We believe it’s much better to strike when the iron’s hot.
We believe that everyone in the CSR ecosystem benefits when donations get into the hands of nonprofits as soon as possible. The fewer aggregation backlogs and bottlenecks, the better.
If you’ve been relying on a legacy CSR platform to conduct employee matching programs and want to switch to Groundswell, you could start thinking about how you’re going to spend all that extra time now that you don’t have to pore over a ton of invoices once per month.
If you’re trying to figure out how your company can even accommodate a CSR program right now, we’d love a chance to show you how easy it can be. Take a few moments to book a demo with our team, and we’ll handle the rest.
