Matching Gift Best Practices for Donors and Investment Advisors
As a donor, imagine you could double your donation to the charity of your choice without having to reach back into your wallet—would you jump at the opportunity? Clearly the answer would be “yes”, and the receiving charitable organization would certainly be in favour, too. With a matching gift, this scenario is completely possible.
Many corporate donation matching programs enable donors to maximize the impact of their gift without having to dig back into their chequebooks. Instead, a gift matching program matches the original donation amount of the employee often at a 1:1 ratio.
This can be a powerful giving option well suited for timely responses when there’s a sudden need, such as the global response to the COVID-19 crisis.
However, non-profits often struggle with attracting and receiving these types of gifts because there is a lack of information or the information is not readily available. Few donors know about their employer’s corporate philanthropy programs, or which charities accept matching gifts, or what the process is for making a matching gift.
Moreover, communicating guidelines and instructions, especially on a wide scale, can be difficult for charities, consequently many focus their efforts on traditional fundraising strategies instead.
The following best practices can help charities, donors and their financial advisors bridge the information gap and leverage this powerful giving option.
1. Understand matching gifts
Make sure everyone involved has a good understanding of what a matching gift is and who can benefit—this is the first step in maximizing the impact of a matched gift.
What are matching gifts? Matching gifts are a type of philanthropy in which an original gift is matched financially. Corporate gift matching is one of the most common types of donation matching whereby companies match donations that their employees make to charitable organizations.
Who can benefit? A matching gift is an efficient and straightforward way to help just about any type of charitable cause including:
- Educational Institutions
- Environmental Organizations
- Arts and Cultural Organizations
- Health Care
- Social Services
2. Don’t be afraid to ask
One of the most common reasons why donors don’t submit matching gift requests is because they don’t know that their employer has a corporate giving program. Or, they may have a general awareness of their company’s matching gift program, but they don’t know about requirements, deadlines, or restrictions. Therefore, it’s important for donors to speak with their finical advisor who can help start the process of a matched gift, and donors should ask their employer.
Corporate social responsibility is an important relationship builder between a company and their community, and a matching gift is a straightforward way to build that relationship. Many employers sponsor matching gift programs and will match any charitable contributions made by their employees. At the end of the day, it never hurts to ask.
3. Understand the process
For donors seeking an opportunity to request donation matching and for investment advisors supporting this decision, it’s important to have a conversation to understand the process before engaging the charity or an employer.
Although every gift is unique, matching gifts follow a similar (and simple) process.
- The donor makes a donation to the charitable organization of their choosing.
- Inquire if the donor’s employer or their spouse's employer has a matching gift program.
- Fill out the request form typically supplied by the employer or available on their website.
- Submit a matching gift request to the company along with any necessary materials identified in the request forms.
4. Know the requirements, restrictions, and deadlines
Every company is a bit different in the way that it interprets how they ‘match’ gifts from employees. Most companies match at a 1:1 ratio, but this is not standard across the board. Some companies will give $.50 for every dollar an employee donates while others will give as much as $4 for every $1 that an employee donates. Donors will want to clarify these details before requesting a match.
Donors should also become aware of any restrictions around which charities an employer will support with a match. The most common restriction is for religious organizations and, while many employers will not match donations made directly to houses of worship, they will match donations made to institutions affiliated with houses of worship that provide a service to community members regardless of religious beliefs, such as food banks or homeless shelters.
The size of the gift can also determine if an employer will match or not. It is common practice for companies to apply minimums and maximums to their corporate philanthropy programs to make sure the match is feasible from the employer’s perspective.
The most common gift minimum is $25, although it can range from $1 to $100. The maximum can range from $1,000 to $15,000, and sometimes more in either direction. The min and max amounts vary by company, employee, and non-profit type, so it’s important to understand the employer’s policy before proceeding.
Naturally, deadlines depend on the company. Awareness of these dates ensures that donors don’t miss out on an opportunity to maximize their gift. Most match request submission deadlines are based on the end of the calendar year or a set number of months after the donation date.
Depending on how a donor wishes to structure their matching gift, support is not far away. Gift Funds Canada can help answer questions and support both donors and financial professionals with expertise about various gift types, professional advice, and support every step of the way.