Empowering employees to support the causes that matter most to them is the best way to maximize charitable ROI.
As workplace practices continue to shift, charitable giving is becoming increasingly effective as a workplace motivator. That’s the conclusion from a new study from the University of Waterloo and Wilfrid Laurier University (WLU) that found that employees who were rewarded with a donation made to charities in their name performed at a higher level than those who received cash.
Described as a “win-win-win” by Adam Presslee, an associate professor at UWaterloo’s School of Accounting and Finance, these “pro-social” rewards were found to help employees feel good about themselves and enhance employers’ performance and reputation, all while benefitting society at large. This partly explains the enduring popularity of corporate matching-gift programs, which involve an employee making a donation to an eligible organization, and their employer matching it, doubling the impact of the employee’s decision.
As the founder of an online platform designed to nurture Canadian generosity by making charitable giving an intentional and joyful part of life for everyone, I’m encouraged by these findings. Everyone cares about something, after all, and by leveraging new technology that empowers employees to choose the things that they care about, company leadership can make those win-win-wins even more rewarding for everyone involved.
For employers, charitable ROI grows when it engages employees’ passions and personal preferences. The WLU study acknowledged this by excluding participants who found it difficult to identify a “worthy” charity from the five options that were to receive donations. That’s why matching-gift programs sometimes run into trouble when they only include causes employers deem worthy. For instance, many employers will not match donations to houses of worship, but will match those made to institutions affiliated with houses of worship, such as food banks or homeless shelters. As reasonable as this may sound to some people, it will rub others the wrong way.
That’s where online donor-advised funds (DAFs) are playing a key role. A DAF is a centralized charitable account, sponsored by a public foundation, that allows individuals, families, organizations and businesses to make donations, receive an immediate tax receipt, and then allocate funds to charities at a later date. In other words, a DAF is like a bank account just for charitable giving. By moving online, some DAFs enable companies to add funds to their accounts whenever they like, be it in the form of cash or non-cash donations such as real estate, life insurance, and even cryptocurrency.
The key point is that some of the more advanced DAFs, like Charitable Impact’s, enable any donor, companies included, to send charitable dollars to others for them to give away. When companies reward employees in this way – not to mention partners, stakeholders, customers, influencers and so on – it transforms average people into agents of change, regardless of whether that employee has donated their own money yet. This has the effect of developing loyalty and appreciation among employees, while the company helps to develop the giving experience and build “literacy” around creating change.
Along the way, the employee might start to donate their own money, something that the employer can then match, further empowering the employee to create change for what they care most about while becoming a “better donor.” Online tools make it easy for companies to incorporate charitable giving into their benefits packages while also helping their employees to develop philanthropic skills.
My hope is that more and more employees will ultimately be grateful to their employers for introducing them to DAF-based giving and the freedom, confidence and engagement it provides. It’s no secret that highly motivated employees can add enormous sums to a company’s bottom line and maximize ROI. Employees’ respect, however, is priceless.
John Bromley is CEO of Charitable Impact, www.charitableimpact.com.