Americans donate billions of dollars to nonprofits each year via workplace giving programs. While in the past the donation process may have been inconvenient and cumbersome, today technology platforms integrated with payroll systems provide convenience that improves the experience for the donor and the recipient. Payroll giving, which refers to deductions made right from an employee’s paycheck, can greatly improve the adoption of your employee giving programs and their impact on the nonprofits they benefit. Here’s a look at payroll giving and how to leverage technology to make it easy.
Payroll giving simplifies charitable donations in the workplace. Just as 401K contributions, healthcare premiums and the cost of other programs are deducted from paychecks, charitable donations are also taken out. There is one key distinction between deductions like 401K contributions and payroll giving. Many deductions are taken out before taxes, but payroll giving is an after-tax deduction. This can be good news for your employees. Because these contributions are taken out after taxes, workers can claim them as deductible when they file their personal taxes at the end of the year. In fact, their W2s should include a comprehensive record of how much they donated to charity via payroll giving during a calendar year.
Why should companies encourage payroll giving? The answer is simple: Payroll giving creates a number of benefits for the organization, for employees, and for the community. Those benefits include:
You can spend a great deal of time trying to manage giving programs manually. Or, you can seek out a technology partner that makes payroll giving easy — and that helps your organization maximize the benefits of payroll giving.
Because payroll giving can truly increase your employee engagement and community impact, it should be a key consideration in your evaluation of workforce giving platforms. To that end, be sure the platform you select enables payroll integrations with leading platforms such as ADP, Paychex, Paylocity, and others. Bright Funds offers this plus more. If you’re ready to make payroll giving accessible for your employees, discover how Bright Funds can help. Schedule a demo.