The Case for Matching Gifts

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2 The Case for Matching Gifts Did you know? The first matching gift program was started in 1954 by General Electric. GE s goal was to support the colleges and universities that had prepared employees for their careers. Many companies have since started their own matching gift programs, and the number of programs has grown significantly over the last decade. Today, there are matching gift programs in more than 30 industry classifications that benefit Texas A&M University, with the greatest number being in oil and gas, financial services, manufacturing, and utilities, according to HEP Development. As Apple s new CEO, Tim Cook demonstrated a commitment to his employees when he implemented his matching gift program....it s not some corporate committee deciding, but it s our 80,000 employees deciding what they want to do, and then we match it, Cook said. He wanted to emphasize the value of taking a bottoms-up approach to Apple s corporate giving strategy. Companies that create matching gift programs have cited many reasons for doing so, including: advancing their company s mission, engaging and connecting employees in that mission, becoming a better corporate citizen, improving employee relations, improving corporate image, and initiating a virtuous cycle by providing financial support to organizations that educate their employees. Employees find matching gift programs appealing because of their ability to leverage their gifts of time and money to the organizations and educational institutions they choose. 2

3 Designing a Matching Gift Program The key to designing a successful matching gift program starts in the planning stage. A program with a clear and concise structure is necessary to prevent confusion by administrators, employees, and recipient organizations. Here are eight key questions that will guide the design and operation of a new matching gift program. What kind of organizations will we match? A clear distinction needs to be made between eligible charitable organizations and those not eligible. For example, political and religious organizations are normally deemed ineligible. The following two examples are intended to illustrate the different options your company has for choosing the types of organizations matched and the nature of their work. 1. Only match employee gifts to their colleges, universities and secondary institutions. General Electric set up the first matching gift program for this very purpose. According to statistics compiled by HEP Development in 2012, percent of companies with a new matching gift program contribute to educational programs and entities. 2. Match gifts to educational organizations and all other nonprofit organizations with a 501(c) (3) status. Not every employee will be drawn to give back to their alma mater. Some will want to contribute to causes such as St. Jude Children s Research Hospital or United Way, for example. Currently, percent of new matching gift companies choose to match both education and other non-profit organizations, according to HEP Development. Which employees are eligible? An overwhelming majority of companies with a new matching gift program choose only to match full-time employees. A smaller number of programs, however, will choose to match their part-time employees (11.39 %), retirees (5.91%), and spouse gifts (1.27%). Because retirees are a growing class, future financial implications must be taken into consideration when including their gifts. 3

4 What should the level of match be? Every company should take their own budget into account when establishing both a maximum and minimum matching level for each employee. HEP has provided the most common amounts used for both: Minimum Amount Percentage of Matching Companies $1-$ % $25-$ % $50-$ % $100 or more 7.17% Maximum Amount Percentage of New Matching Companies Less than $ % $500-$ % $1000-$ % $2000-$ % $3000-$ % $5000-$ % $10000 or more 5.49% Unlisted 28.27% What should the ratio of match be? According to HEP, 220 (92.83%) companies with new matching gift programs choose to match employees on a 1:1 ratio. The 1:1 is undoubtedly the most popular option for a matching ratio, but some companies choose to match differently. Ratio Percentage Less than 1:1 1.27% 1: % 2:1 2.11% 3:1 0.42% No info available 3.38% TOTAL 100% There are no straightforward reasons that keep a company from increasing or decreasing matching level ratios at any time, but legal experts note that once a program is in place, the company is 4

5 responsible for funding every request made during that time period. The matching amount should also reflect the ratio at the time the request was initially made by the employee. How often should the match be paid out? Many matching programs fulfill requests continuously if they have the staffing and software to do so. While this is the most common practice, it is not unusual for a company to pay matching gifts quarterly, semi-annually, or annually. What should the process be in paying the match? Each matching gift program has a designated contact person to help answer questions about the program, usually from the human resources department. Most questions can be taken care of with an informative matching gift program form, usually only one page long for the sake of simplicity. Avoid possible misunderstanding and ineligible matches by including eligibility requirements, deadlines, and payment schedules on the form. Examples of matching gift forms are included at the end of this packet. There are two sections to every form, one for the employee to complete and another for the recipient organization. Once the employee fills out their section, they send it to the recipient organization to complete. Once completed by the recipient, the organization returns the form to the company for final verification and payment. An authorized representative of the organization signs the forms to acknowledge that they are in compliance with the company s matching gift program. How should the program be communicated to employees and eligible recipients? It is recommended that internal communication tools, -- such as newsletters, brochures, intranets, and meetings -- be used to disseminate information about the matching gift program or to update them on program policy changes. No matter the communication method, it is important that the program be highly visible and easily accessible for employees. Most companies will choose not to advertise their matching program outside of the company, but many nonprofits will include lists of corporate matching programs in annual solicitation appeals as a reminder to those companies employees. 5

6 Conclusions The following conclusions are offered about matching gift programs. The majority of programs: - Match annual gifts of full-time employees - Match employee donations on a 1:1 basis - Provide a minimum match of $25 with a maximum of $1,000 in donations per employee/per year - Will match employee gifts of cash or stock - Fund educational institutions, but the number of programs matching all 501(c)(3) nonprofits is growing - Operate with a simple one-page matching gift form with an employee and recipient organization section - Provide access to the form with continued communication - Have a designated contact person for matching gifts, usually in human resources 6

7 Form Examples Two examples of matching gift forms are provided: - One page form example - Dow Chemical Company Foundation - Two page form example - The Delta Air Lines Foundation 7

8 The Dow Chemical Company Foundation Matching Gift Program A INSTRUCTIONS: Donor must complete all of Parts A & B, Please sign and date. TO BE COMPLETED BY DONOR, PLEASE TYPE OR PRINT IN INK. Dow Employee/Retiree Number Full-Time Retiree Employee/Retiree name First Middle Initial Last Street Address City State/Zip Code Dow Division/Work Location (if retired, list previous) Recipient Institution (If a TV or Radio Station, please put college affiliated with) Building no. City Brief Description of specific Use B IF MAKING A DIRECT GIFT OF CASH, CHECK OR SECURITIES, FILL IN BELOW Amount of Gift ($250 minimum) Form of Gift: Cash Check Securities/Number of Shares Credit card Number of Shares: Title of Security Approximate value at time of Transfer Is this a multi year commitment? If so, when did the commitment begin and what is ending date. Indicate amount per year I certify that the information submitted is correct and that my gift fully complies with the provisions of the program Employee Signature Date Signed Date of Gift C Name of recipient institution Street address TO BE COMPLETED BY RECIPIENT INSTITUTION City State/Zip Code Amount of Gift Employee/Retiree name (Verify from part A) Date Received **Wire Transfer Information (Preferred Method: Provide if you would like wire transfer instead of check) Bank Name: Account #: Bank # Swift Code: (Foreign banks) Financial Officer Name (Please Print) Title Phone No. We certify that the above indicated gift has been received and will be used to support the primary educational objectives of the institution, and otherwise fully complies with program provisions. Signature of Financial officer No acknowledgement to The Dow Chemical Company Foundation is necessary. When signed by authorized official, this form should be returned to: The Matching Gift Office, Dow Chemical Company, 2030 Dow Center, Midland, MI 48674, (989) It is assumed that the institution will acknowledge receipt of The Dow Chemical Company Foundation s check to the donor. 1/27/2011

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