Matchmaker, Matchmaker

Charities are working hard to compete for a smaller pot of dollars from companies that match employee donations

By David Whelan

Charles V. Flemming, a Purdue University alumnus, donor, and volunteer fund raiser, has matching gifts down to a science. The retired pharmaceutical-manufacturing executive, who worked for Schering-Plough and Roche, used matching gifts from his employer to increase his personal contributions of $240,000 to Purdue by another $160,000 during the 1990s before he stopped working.

Now when Mr. Flemming meets with other alumni in the pharmaceutical industry and asks them to donate a $20,000 scholarship, for example, he shows them how to make the gift for substantially less money.

Since many companies will provide $1 or $2 to match every dollar given by an employee, the typical donor will only have to kick in one-half to one-third of the total gift, Mr. Flemming says. At the most-generous companies, which offer three-to-one matches, the donor might only have to put up a quarter of the money. Companies generally put a limit on how much they will match each year; those limits tend to range anywhere from $500 to $20,000 annually.

Matching gifts have long helped charities raise money. They got their start in General Electric's program in 1954. Since then the company has paid $320-million to match employee gifts. Other industrial companies and banks copied General Electric, making gift matching a common perquisite for workers and an alternative form of corporate philanthropy. Today it is still mostly big companies that offer such donations.

Colleges like Purdue, which prepares many of its students for science and engineering careers, find it fruitful to tap matching-gift offers at companies where its former students land jobs.

But other kinds of charities, which are less likely to know where their donors work, have also had luck with matching gifts, even though this type of corporate giving has become less common in recent years. After the economy slowed in 2001, many big companies slashed or eliminated gift matching for retired workers, while others reduced the amount of money available to match employee donations.

Matches Decline

In 2000, 150 employers — or 15 percent of the more than 1,000 companies with matching programs — gave $2 or more for every dollar contributed by their employees, according to HEP Development Services, a Leesburg, Va., company that tracks matching gifts. This year only 117, or 8 percent, of the companies match at that rate. And according to a survey conducted by the Council for Aid to Education, the average amount companies paid to match employee gifts to any single college or university shrank from $228,000 in 2001 to $209,000 in 2006.

About one in 10 donations to charities can be matched with a corporate gift, according to HEP Development, and anywhere from 4 percent to 12 percent of the donors to most charities work for companies that match employee donations. While those numbers may seem insignificant, they can generate some substantial sums for charities that make a deliberate effort to obtain employer matching gifts.

At the American Cancer Society, fund raisers have recently begun to focus on matching gifts. Matching is now mentioned in thank-you letters sent to donors and by call-center representatives who receive gifts by phone. The medical research and advocacy organization has also added employer information to its donor records.

The cancer society scans its records for companies that both make generous matches for employee gifts and participate in one of its Relay for Life or other fund-raising events, and then looks for opportunities to increase matching gifts by the company and its employees.

While the effort is still evolving, it has yielded impressive returns so far. Three years ago, matching gifts totaled $3-million. That number rose to $5-million the following year and $11-million last year. Still, that is only 1 percent of the charity's total fund-raising income.

"There's still improvement that's needed," says Jim Hammelev, the cancer society's director of workplace mission-support initiatives. For example, he says, the charity could do a better job of training "team captains" who help recruit Relay for Life participants to discuss matching gifts with those individuals and help them complete the verification forms that most companies require before issuing a match.

Software Support

To seek matching gifts, the cancer society and other groups turn to companies like HEP and Blackbaud, a fund-raising software company that offers a program called MatchFinder Plus. The companies provide annually updated computerized listings of corporate matching-gift programs, their requirements, and their restrictions. That information can be checked against the employer information in a charity's donor records with a few key strokes.

The companies also provide electronic listings of matching programs that charities can link to from their own Web sites; those listings enable donors to type in the name of their employer and find out if the company will match their gift and what is required.

Costs for the services vary: HEP Development charges from $500 to $10,000 per year for its service, depending on the size of the nonprofit organization. Blackbaud's MatchFinder Plus charges a one-time $1,000 fee to cover start-up costs, plus $995 annually.

The Detroit Institute of Arts has used such services over the last five years as it stepped up efforts to obtain matching gifts to help rebuild its facility, which re-opened in November. Officials there say the number of such donations has doubled in the past three years, even as local businesses have cut back on matches in the region's stubbornly depressed economy.

The institute has succeeded in part by moving away from big businesses to small ones, asking them to match the donations of employees who give $50 or more to become museum members.

Betty Stremich, the institute's executive director of development, says matching gifts help encourage donors to keep giving year after year.

"Matching gifts increase donor loyalty and pride," she says. "The sheer fact that you are giving $150, but $300 is going in, makes you more of a stakeholder."

Not Always Worthwhile

But not every charity finds it worthwhile to pursue matches so actively.

World Vision, in Federal Way, Wash., which encourages donors to make modest monthly gifts to sponsor children in developing countries, recruits donors with television and radio spots and through the Internet.

The charity makes little effort to tell new donors about the option of getting a matching gift from their employer.

Even so, World Vision sometimes gets donations matched anyway, and it has added a section on its Web site that allows donors to check whether their employers match donations. But at $2-million out of $2-billion in total donations, matching gifts are not a big priority for the organization's fund raisers.

"Right now, asking for the employer, it's further down the list," says Chris Wolff, World Vision's director of employee giving.

New York City Rescue Mission, a homeless shelter, spent $800 to add a link to its Web site in September that allows online donors to check if their companies match donations.

The mission has always received a slow trickle of matching gifts. But after the link went up, the group received 43 matches compared with only seven in the same period a year earlier. Out of a total of $2.3-million raised last year, $8,000 came from matching gifts, says Tom Hall, the shelter's director of development.

"We don't sink or swim on it," he says. "But it's extra money."

Bruce Hufford, Purdue University's director of annual giving, says he has been able to increase matching gifts from $2.3-million to $2.9-million over the past three years. That money, separate from larger matching gifts for specific needs like scholarships, is a significant portion of the $22-million donated to the annual fund each year.

But getting the matching gifts hasn't been easy, he says. Purdue has 98 percent of home addresses for alumni, but it only has employer information for about half of them, and much of that data is out of date.

Another challenge is the wide variation in restrictions that companies place on employees who want their donations matched, with many requiring forms and receipts, which can make it difficult for donors and charities to get the matching funds.

What's more, Mr. Hufford has found that many companies have scaled back their matching-gift programs, or they only match donations to certain causes, like disaster relief.

Mr. Hufford uses direct mail to solicit matching gifts to his annual fund. If he knows that an alumnus works for General Electric, which provides a dollar-for-dollar match, he sends an extra reminder with the annual appeal to that potential donor with information about the company's matching-gift program. Alumni who receive the reminder are 10 percent more likely to respond to the mailing than recipients who don't receive it, Mr. Hufford says. If those who get the reminders don't respond, Mr. Hufford mails another reminder 60 days later.

That mailing generates a matching gift from half of the recipients.

Sometimes matching-gift appeals yield big returns. In his most successful effort, Mr. Hufford turned a $250,000 gift from a retired Eli Lilly executive into a $750,000 contribution by spreading it over five years. The company provided a two-to-one match, a maximum $100,000 annually, for each of the five years.

"We are grateful to the companies that do it, and employees like it," Mr. Hufford says of matching gifts. "But it's not all smooth sailing. You have to work at it."

Matching each employee dollar with a $2 or $3 donation is relatively rare among companies. Seventy-seven percent of companies offered a one-to-one match last year, with 7 percent providing $2 and another 0.9 percent giving $3 for every employee dollar, according to a Blackbaud survey of more than 25,000 companies and subsidiaries with matching-gift programs.

Some of the most generous employers are not companies but charitable foundations. The Robert Wood Johnson Foundation, for example, provides $5 for every dollar an employee donates, up to $50,000 per year, according to HEP Development.

And some are very tiny. Douglas Quine, who runs a small consulting company called Triskelion, in Bethel, Conn., offers the most generous matching program in HEP's listings. Triskelion chips in $9 for every dollar donated.

Mr. Quine says that when his company started offering to match employee gifts, charities started aggressively courting him and his employees for donations. One charity even volunteered to lend the first dollar to get the nine in matches.

"That sounded illegal," Mr. Quine says.

His company, which now has shrunk to only a few full-time employees, paid out $5,320 last year in matching gifts. "We're not single-handedly going to cure malaria," he says.

Exxon is one big company that likes to publicize its matching program, which gives $3 for every dollar donated by employees to colleges and universities and also provides a one-to-one match for contributions to arts organizations, says Bill Carpenter, a program officer at the ExxonMobil Foundation.

Last year the foundation paid $24-million to match higher-education donations by 5,760 employees who contributed to 954 colleges and universities. The foundation donated another $1.4-million to match gifts to arts groups.

The matches are a sizable portion of the $138-million that the Irving, Tex., company donated to charities last year.

Mr. Carpenter says the program is popular with employees and job candidates, and it generates recognition for the company and employees' generosity.

But Mr. Carpenter says he is well aware that ExxonMobil's generous match makes him and every other employee a target, especially as charities refine their methods: "Several of the large universities go after our employees," he says.