Charities have learned that working with corporations can enhance their receipts and reduce their costs. This is not to say corporations are large contributors. The Annual Report on Philanthropy from Giving USA 2013 shows corporations are the smallest charitable contributors at 6% of total receipts.
However, employers that will partner with a charity to provide payroll deductions provide a benefit both to employees and charities. Some Corporations may match employee contributions.
Employees have the convenience of payroll deductions and still have the tax benefit of charitable giving. However, if you contribute $250 or more from a single paycheck, you have to prove to the IRS 1) that you made the contribution and 2) you didn’t receive anything in return. A copy of your pay stub satisfies the first requirement. The second requirement requires documentation from the charity. It could be something as simple as a pledge card.
Before completing a pledge card for payroll deductions, determine how much you can afford to give. Review your Giving Plan discussed in the second post. Be sure you evaluate your giving by pay period. Submitting a monthly amount may be doubled if you are paid semi-monthly.
Workplace giving campaigns can be user friendly because they offer lots of choices. Compare the choices offered to your values. What charity do you want to support? United Way is a common charity employer’s partner with. United Way has a selection of charities they support. Your Employers campaign may allow you to direct to your favorite local charity.
Do your due diligence. Ask your employer how the participating charities were pre-screened. Check it out with your own research.
· A critical factor is to determine how much of the revenues go into the charity’s programs. You should see approximately 85% spent on programs which leaves 15% for administration and fundraising. You can access a charity’s financial information at www.guidestar.org
· Check out the charity’s website. Are they sharing the results of their programs? How affective are they?
What if you are a business owner? You may not be in a place to match employee giving. What can you do?
As a business, you can choose a charity to collectively help. You can do a food drive for the local food bank. Collect socks for a shelter that helps the homeless. Collect diapers for a women and children’s shelter. Find a need in the community and fill it. It could be a team building experience.
Or you may consider giving a paid day for employees to volunteer at their favorite charity. Take pictures and post it on your company Facebook page. It is good public relations.
Peggy L. Farnworth, CPA, CFP®, CSA
Ph: (208) 343-7777