Employees today are more likely to seek employment in socially responsible organizations, and one way that employers can commit to helping those in need is by offering a charitable giving program at work.
A recent survey of approximately 1,200 workers across the U.S. by Fidelity Investments, a provider of employee savings plans, found that:
- 66 percent of respondents said they feel it's important for companies to be philanthropic and to support different causes. Among Millennials, it was 75 percent.
- 42 percent of respondents said it was important for employers to match employees' charitable contributions through a workplace giving program. Among Millennials, it was 75 percent.
- While 66 percent of respondents said they'd be more likely to donate through their employers if offered a matching contribution, 24 percent didn't know if their employers offered matches.
The research showed employees already donate to charitable causes on their own, outside the workplace, said Shannon Bullock, marketing director for Fidelity Workplace Giving. "Any employer that offers a benefit that helps support [an employee's charitable contributions] wins favor in the eye of the employee," she said.
Harnessing Employee Interest
Jesse Moore, vice president of workplace giving and enablement at Fidelity, noted that 1 in 5 employees indicated they were increasing their giving this year amid the COVID-19 pandemic.
"What came across clearly is that it's personal to the employee," he said. "Over 90 percent cite the fact that they wanted to give back to their communities."
For employers, Moore noted, "the challenge is going to be how to harness that energy among their employees in a way that allows them to lean into the charities and causes that are of interest to them."
Giving isn’t only about monetary contributions, Bullock noted. Employees are also interested in volunteerism. Companies can help support those interests even during the pandemic, she said, through virtual volunteer opportunities.
"A lot of volunteer activity has been reduced because of the stay-at-home orders, but there has been a major shift and interest in virtual volunteering," Bullock explained, including skills-based volunteering. "If you're a graphic designer, you have the ability to seek out nonprofits in need of that skill," she said. "People are looking for new ways they can offer their talent even if they can't go to a location physically."
Workplace programs can also put employees in contact with charities that need volunteers with specific skills, she noted.
Special Tax Deductions for Charitable Giving This Year
The IRS is reminding taxpayers that, following special tax law changes enacted last spring under the Coronavirus Aid, Relief and Economic Security (CARES) Act, cash donations of up to $300 made before Dec. 31, 2020, can be deducted from income when people file their taxes in 2021, even if they don't itemize deductions on their tax returns. This can mean extra tax savings for those making donations to qualifying tax-exempt organizations.
"Our nation's charities are struggling to help those suffering from COVID-19, and many deserving organizations can use all the help they can get," said IRS Commissioner Chuck Rettig. "We encourage people to explore this option to help deserving tax-exempt organizations—and the people and causes they serve."
Nearly 9 in 10 taxpayers take the standard deduction rather than itemizing, and could potentially qualify for this new tax deduction, according to the IRS.
In addition, the CARES Act temporarily raises charitable contribution limits for taxpayers who itemize their deductions. While the tax laws generally cap the deduction for cash contributions to public charities at 60 percent of a taxpayer's adjusted gross income, the CARES Act raises that limit to 100 percent for 2020.
PTO Donation Programs
There's another way for employers to help employees make charitable donations this year. Until the end of 2020, employers can set up programs under the IRS disaster declaration that enable employees to donate the dollar value of their vested paid time off (PTO) to charities supporting COVID-19 relief. The donated funds are not taxable income to employees and can be considered a business expense or a charitable contribution deduction for the employer.
A 2020 Fidelity study, Doing Well by Doing Good, drew on a 2019 survey of 138 U.S. companies of various sizes and industries by Fidelity and the Association of Corporate Citizenship Professionals. The study reported that:
- While many companies (60 percent) self-administer their workplace giving programs, fewer than half use a workplace giving platform. Bigger companies were almost twice as likely than smaller companies to use online tools to manage the program.
- Companies that robustly promoted their programs were more effective in getting strong participation among a wide range of employees.
- Incentives—such as paid time off for volunteer work or matching employee donations—also help promote employee participation in workplace giving programs.
Among best practices around charitable giving programs, the study advised that employers:
- Set goals for your workplace giving program. Whether you establish a goal for number of employees who participate, number of volunteer hours served, amount of match funds given or amount of in-kind goods donated, ensure you can track and report on your company's progress toward those goals.
- Use tools that measure program impact. These tools allow companies to track all aspects of their workplace giving programs, from employee donations to volunteer hours, match dollars and company contributions.
- Promote your program often and via many channels. E-mail, intranet, onsite signage and social media are all ways to tell employees about your workplace giving program.
According to Fidelity's Moore, there are two critical elements for employers to get the greatest benefit from and participation in their charitable giving programs:
- Providing personal choice and options.
- Making it easy to participate.
"If [employees] have to deal with too much paperwork or lots of forms, or anything that adds friction to the process, that becomes a deterrent," Moore said.
Supporting Employees' Choices, Organizational Goals
Online Optimism, a digital marketing agency with offices in New Orleans and Atlanta, introduced a program called Donate, Elevate in 2020. According to CEO Flynn Zaiger, "We wanted our employees to feel that we supported their preference of choice, while also giving our leadership a way to ensure that any donations actually supported organizations that we felt lived up to our company values."
The agency accomplished these goals by first matching an employee's donation to their chosen nonprofit and then donating that same amount to a nonprofit of the leadership team's choice.
In 2020, the agency's chosen nonprofit was the Innocence Project New Orleans, which advocates for criminal justice policies that reduce wrongful convictions, Zaiger said. "When our company expanded to Georgia, we found a similar organization—the Georgia Innocence Project." In both cases, he noted, the program "elevates" employees' donations to improve their communities.
Lin Grensing-Pophal is a freelance writer in Chippewa Falls, Wis.