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Why Do Businesses Offer Matching Gifts? An Inside Look

By Adam Weinger posted 01-02-2024 10:43


Corporate giving is a powerful force in the fundraising world. More and more companies realize their duty to give back through philanthropy, and matching gifts are one of the easiest ways to accomplish that. 

This type of corporate giving empowers employees to direct their company’s philanthropic spending toward causes they care about. When an employee donates to a nonprofit, the company promises to match that donation, effectively doubling the contribution.

This image depicts the concept of corporate matching gifts.

While it seems like nonprofits primarily benefit from matching gifts, the positives are actually mutual.

As a fundraising professional, it’s vital to know why companies engage in philanthropy. That way, you can fully understand corporate giving, a skill that will prove invaluable for advancing your career

Corporate matching gift programs aren’t driven by a single motive but rather a combination of factors. Understanding these motivations is essential for driving more revenue to your nonprofit via corporate giving. Now, let’s explore the diverse reasons why companies offer matching gifts.

Matching Gifts Grow a Company’s Impact and Reputation.

Companies view all types of philanthropic initiatives as a way to positively impact and establish a favorable reputation within the communities where they operate.

Offering matching gifts in particular sets these companies apart from competitors by demonstrating their commitment to bettering society, which can resonate with anyone who prefers to support socially conscious businesses.

Take the following for example:

  • Customers want to buy from businesses that give back, so they’re more likely to favor businesses that align with their values.

  • Employees want to make a difference through their work, so they often seek out companies that enable them to do so through programs like workplace giving.

  • Clients and vendors prioritize working with companies with strong CSR initiatives, like matching gifts, since they project an image of integrity and ethical business practices.

By offering matching gifts, a company positions itself as a more appealing company to work for, partner with, and buy from.

Corporate Giving Drives Workplace Satisfaction.

Let’s face the facts: engaged employees are better for business. They’re motivated to show up, do their best work, and invest extra effort to achieve company goals. Beyond productivity, they can actually increase profitability by directly impacting sales and improving customer satisfaction.

That’s why matching gift programs are great for attracting and retaining talent.

Today’s employees want to work for companies that make a difference. So, when workers see their company supports their charitable contributions, it enhances their sense of pride and job satisfaction. This, in turn, can lead to a positive workplace culture, higher retention rates, and a reputation as an employer of choice.

Companies Get Tax Benefits From Matching Gifts.

Let’s not ignore an obvious motivator for offering matching gifts. Most companies recognize the tax advantages associated with charitable contributions, including those made via matching gifts. 

Businesses can typically deduct the matching contributions they make to nonprofit organizations from their taxable income. This reduces the company's taxable income and tax liability. In the United States, businesses can usually deduct up to 10% of their annual income in tax deductions from charitable giving.

Navigating Challenges and Maximizing Opportunities

Now that you know why companies offer matching gifts, let’s explore some common challenges you might face. That way, you can overcome them and maximize matching gift opportunities throughout your nonprofit career:

  • Limited awareness among donors: Often, eligible donors don’t realize their employers offer matching gifts. That can lead to missed revenue for nonprofits. Be proactive in educating donors by first improving your own understanding of matching gift opportunities.

  • Complexity and administrative burden: While beneficial, matching gift programs can also be administratively complex for nonprofits and donors. You’ll need to manage documentation, help donors follow verification processes, and follow up with donors and companies to drive matches to completion. Promptly send donation receipts and provide clear instructions to donors on how to submit requests.

  • Eligibility checks and timely requests: Companies set eligibility requirements and deadlines for employees to submit matching gift requests. As a fundraising professional, it’s up to you to educate donors about these deadlines and leverage software to streamline eligibility checks and match requests. Otherwise, you may forfeit matching gift revenue.

  • Communication gaps: Effective communication between nonprofits, donors, and companies is vital. Poor communication can result in delays or denials of matching gift requests. Develop targeted communication strategies to engage donors who work for companies with matching gift programs.

Knowing what you’re up against will allow you to develop strategies to work around obstacles and maximize matching gift revenue at whichever nonprofit you support.

Wrapping Up

By recognizing employers’ diverse motivations for offering matching gifts, you can tailor your strategies to resonate with corporate donors and align your nonprofit's work with the interests and values of potential partners.

Throughout your career, you’ll better understand how to leverage these programs to attract
new donors who work for matching gift companies and inspire them to stick around by doubling their impact.