How does corporate matching work?
Nonprofits, by definition, depend on fundraising and donations for their revenue. One method of fundraising that is often overlooked is corporate giving.
Corporate giving occurs when for-profit companies donate money or resources to nonprofits and charities. Many corporations offer their employees a variety of giving programs in order to encourage them to be charitable.
The most commonly known form of corporate giving is corporate matching. Through matching gift programs, corporations will match their employees’ donations, usually at a 1:1 ratio (though some companies go as far as to match donations at a 4:1 ratio!). In other words, if an employee working at a company with a 1:1 matching gift program were to donate $100 to a nonprofit of their choice, their company would respond by donating another $100 to the same nonprofit. This way, employees can be sure to maximize their donations.
The majority of companies with gift matching programs match donations to any educational institution, or any organization with 501c3 status (that is, a nonprofit organization exempt from federal income tax). Certain companies, however, will only match donations made to specific types of organizations, be it educational institutions, cultural organizations, health services, civic organizations, or environmental organizations. In addition, corporations often set minimums and maximums to their matching amounts. Minimum matches tend to range from anywhere between $1 and $100, while maximum matches can be anywhere between $1,000 and $15,000, depending on the company.
Of course, gift matching requires a few steps to be done on behalf of the employees as well. They must submit the appropriate paperwork, whether this consists of manual paperwork due to the company’s HR department, or whether the company has a matching gift submission website allowing employees to submit their request electronically. In both cases, employees must include basic information about the nonprofit as well as about their donation (amount donated, currency, date, etc.).
As for the nonprofits, there are a few steps they can take as well in order to reap the full benefits of corporate matching. Firstly, they should encourage their donors to look into corporate matching and see if their companies offer any matching gift programs. Secondly, nonprofits should familiarize themselves with top corporate matching companies – a short list includes British Petroleum, General Electric, Gap, Johnson & Johnson, and Microsoft.
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