Donors who give at work have never had more choices than they do today. Employers want to keep workers happy in a tight job market, so they are doing all they can to show them they care about society. Part of that is matching contributions, giving to groups where workers volunteer, and offering new technology options designed to help employees feel more connected to their favored causes any time of the day or night.
As millennials and Gen Z workers become even more important for employers in the new decade, odds are that we’ll see more mingling of work and causes.
Research shows that when companies focus on social and environmental efforts, they do better at both recruiting and keeping workers — an important goal because younger generations tend to show less company loyalty.
As a result, more small and medium-size companies want to start workplace-giving programs, says Jim Starr, CEO of America’s Charities, a nonprofit that provides workplace-giving software to both businesses and government offices. “The space used to be the domain of the Fortune 1000 because they were the only ones that could afford to do it.”
And yet by some counts, employee giving appears to be on the decline, as economic, social, and cultural forces bring about big changes in both philanthropy and the workplace. Bellwether campaigns like those run by United Ways and the federal government have seen steady declines over time. And the median contribution made by payroll deduction in workplace-giving campaigns declined by 10 percent from 2016 to 2018, according to a report from Chief Executives for Corporate Purpose.
The decline comes at a time when for-profit software vendors control both the systems through which workplace giving happens and access to donors. That is creating major challenges for nonprofits — small ones especially — that want to stay connected with supporters. And even though there are countless other ways to reach donors these days, fundraisers who treat workplace giving as an afterthought are missing out on a captive audience of potential champions and unrestricted dollars, experts say. So how can charities best navigate the new landscape?
‘Community-Chest Model’
For decades, workplace giving was synonymous with United Way. Workers would contribute a portion of their paycheck to their local United Way. The pledge was often the result of person-to-person solicitations in the office. United Way would then distribute those funds to a group of local charities it had picked, usually health and human-service groups.
“It was the community-chest model taken to the workplace,” says Brian Gallagher, CEO of United Way Worldwide. “We had a privileged position in a controlled space, and virtually no one else was doing it.”
There were, of course, other major players. The Combined Federal Campaign, which raises money from federal workers, eventually became the largest workplace campaign.
One of the biggest changes was ushered in three decades ago when United Ways and others started allowing employees more choice in where they give. Workplace giving “was no longer associated entirely with support for local health and human-services nonprofits, or even with support for the local community itself,” Benjamin Soskis, a research associate at the Urban Institute, writes in his report “The Past, Present, and Future of Workplace Giving in the United States.” “It redirected focus from aggregate totals and collective concerns to the satisfaction of individual employee preferences.”
Fast-Growing Competition
In recent years it’s become a sort of Wild West, with technology companies competing to offer the best personalized and customized approach to employee giving and volunteering. Even United Way feels the need to jump on the trend. United Way Worldwide, which as a network raised more cash support than any other charity in 2018, hopes to carve out its own niche with Philanthropy Cloud. The product, created with Salesforce.org, helps people support causes and organizations both within and outside of the United Way network.
More than 200 companies, including 25 local United Ways, are currently using Philanthropy Cloud, and more have purchased it. United Way Worldwide also created a for-profit subsidiary called UpPurpose to create cause-related digital content for the platform, local United Ways, and other nonprofits. Think GivingTuesday-style videos and stories of impact.
“Fundamentally our biggest ‘competition’ is not other nonprofits,” Gallagher says. “It’s for- profit technology companies and startups who are building the software and technology for companies.” He believes these companies are causing the nonprofit world to “transact its way to irrelevance,” doing nothing to help workers connect with their communities and with one another.
One of those fast-growing competitors is the giving and volunteerism platform Benevity. Nearly a million people from more than 600 companies participated in corporate programs using its tools in 2019. One recent report from Realized Worth’s RW Institute, a think tank for corporate social responsibility, counted 51 such platforms.
That’s led to “a terrible system,” where the corporate, software, and nonprofit players have no incentive to work together, says Chris Jarvis, the firm’s chief strategy officer. Charities lose out on donor contact information, and those employee donors may feel disconnected from the causes they support.
There’s been some consolidation among the companies that make employee-giving software, but the additional administrative burden for nonprofits remains significant. In this new landscape, groups have to maintain passwords, upload photos and information, keep track of matching-grant dollars, and more for the growing number of systems. And while tech innovations may allow charities that previously wouldn’t have access to workplace donations the chance to get in, the name-brand organizations with large marketing machines typically have an easier time cutting through the noise.
Nonprofits should focus their efforts on platforms with the widest reach, making sure that the information in their public profile is accurate and up-to-date, says Steve Greenhalgh, who consults on employee giving, volunteering, and corporate philanthropy. And for some very small nonprofits, he says, it may not be worth investing that time at all.
Cheron Carlson, manager of employee engagement at the World Wildlife Fund, is one of the nonprofit fundraisers frustrated with the hold that technology companies have on data about people who give through their employers. “We don’t have as much of an opportunity to establish a relationship with the donor and provide that feedback on program impact on their donations at work throughout the year,” she says.
Generally, companies don’t share donor information with nonprofits unless an employee specifically allows it to.
“We really miss a lot of opportunities to properly acknowledge, recognize, and cultivate donors because we can’t connect the dots,” Carlson says. Workplace donors tend to be very loyal, giving small amounts from their paycheck every few weeks, often over multiple years.
The World Wildlife Fund’s mission to promote corporate sustainability gives the organization access to employees at some of the largest companies. The group engages employees — both donors and nondonors — with online-learning materials, posters, and tip cards about recycling and other sustainability measures. It also works with employees in person through activities like food-waste-reduction workshops. Workers who participate in the programs often donate generously and have a strong, long-term connection with the World Wildlife Fund, Carlson says.
Experts see room for more engagement efforts that go beyond the transactional nature of donation platforms.
“It’s almost impossible anymore to separate corporate giving from volunteerism,” says Greenhalgh, the corporate-giving consultant. It doesn’t make sense for all causes, but companies are always looking for volunteer opportunities if a nonprofit’s work lends itself to an event or hands-on project with a corporate partner.
Many nonprofits are missing out by not offering workers a chance to use their skills when they volunteer or forging other kinds of partnerships that tap employees as volunteers, says Jarvis, of Realized Worth. “The world is saying, unless I have an experience that enhances my life, makes me better and smarter and more of a contributor, and gives me a sense of purpose and meaning, you’re just one of a thousand things to give to,” he says. “People aren’t after a service to help them give; they’re after an experience to help them become.”
Finding Corporate Matches
Charities can do a few simple things to take advantage of corporate matching dollars, find out who’s giving at work, and provide information on the impact of their gifts.
Starr, with America’s Charities, recommends that nonprofits ask donors if their employer matches contributions or offers opportunities to give back. The World Wildlife Fund and other charities include a checkbox on direct-mail appeals and online donation forms where donors can indicate if their employer offers a matching-gift program. According to the 2019 Chief Executives for Corporate Purpose report, 92 percent of large corporations offered at least one matching-gift program, but on average just 24 percent of employees participated.
When nonprofits can identify donors who give through their workplace, they should let the donors know that they value them throughout the year and provide information on what their gifts are accomplishing. They should also encourage donors who give at work to help spread the word, advocate on behalf of the organization, and educate their colleagues about their cause, says Starr. “They have to nurture them in a way that is different and distinct than they would a traditional annual supporter.”
