What is Company Matching?
Read our guide to find out what it is and the benefits for your company
Company matching is a good way to incentivise employees and drive up your company’s social and environmental impact.
You’d be forgiven for thinking company matching is something to do with pensions.
It is, of course. But as well as matching the contributions paid into an employee’s pension pot, some businesses also offer charitable company matching. This is sometimes known as workplace matching.
This means that if an employee donates to charity either from their salary, fundraising opportunities or via voluntary work, a workplace may match their contribution.
Research shows employees want to work for companies that promote social, ethical and sustainable practices and see the impact of this measured through Environmental, Social and Corporate Governance (ESG).
So, how does it work? And what’s best practice for businesses offering it?
What types of company matching are there?
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Matched payroll giving
When an employee makes a regular donation to a charity through their salary, the donation is taken before tax income tax is deducted.
Payroll giving means the charities your workforce cares about receive a regular income and your empoyee’s donation goes further because it isn’t taxed.
If an employee applies to have their payroll-giving matched by their employer, they can fill out a request to do so.
The business may then separately donate the same amount (or some other multiple) to the same charity each month.
Employee activity of this kind can feed into the Environmental, Social and Corporate Governance goals of the business and is useful for reporting.
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Matched fundraising
Employees may fundraise for charities via events or challenges. An employer might then choose to match the money raised.
If an employee bakes cakes to earn £1,000 for a charity, their employer might choose to recognise their efforts by "matching" that donation.
As a result, the charity would get a total of £2,000, with the employee contributing £1,000 and the business contributing £1,000 separately.
An employer might set a limit to the amount it will match. It may also incentivise fundraising by only matching a donation if an employee’s efforts reach a benchmark.
For example, if three employees are running the London Marathon, an employer might say it will match donations up to £10,000 if they fundraise above that sum.
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Matched volunteering
Workplaces can incentivise employees to give their time and skills to charities and nonprofits in the form of volunteering.
Matching for volunteering works a bit differently from matched contributions in the three scenarios outlined above.
This is because the company will set a policy reflecting the value of a volunteer hour, and the employee can then apply for it to be matched.
For example, if an employee volunteers for 10 hours and their company’s policy makes an hour worth £10, then the company will donate £100 to the charity.
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Matched personal donations
An employee might choose to make a one-off personal donation to a charity or nonprofit close to their heart.
This might be via cheque, cash, direct debit, debit or credit card. They might then apply to have this gift matched by their employer.
The employer can then make a separate donation matching the gift to the organisation of the employee’s choice.
This is the same process as payroll giving.
What do employees need to know?
Employees can usually apply for matching for their fundraising, payroll giving, one-off donations, and volunteer hours. It’s good to be mindful of the following:
Some companies ask employees to request company matching before a fundraising event or a donation is made.
Businesses matching donations have to adhere to a set of guidelines (more on which under the next heading).
Companies won’t match contributions to every charity or non-profit. Religious organisations are often off-limits, for example.
Businesses must be confident that due diligence has been carried out to make sure the charity or non-profit is the sort of organisation it wants to donate to.
Companies will also have maximum match amounts and deadlines for employees to submit matching claims.
Most businesses won’t match in-kind donations. In-kind donations mean goods and services are given to charity, rather than funds.
What do employers need to know?
Each company offering donation matching sets its own guidelines.
These guidelines are different from company to company. But, the core elements are almost always the same:
Match ratio: This means how much money a business will donate in relation to the initial donation. The most popular is a 1:1 match, which means the same amount will be donated to the same charity.
Claim limit: Businesses set a minimum amount that an employee must donate to be eligible for a matching gift, as well as the maximum amount per employee per year.
Application limit: Companies may encourage employees to fill out applications for matching a limited number of times a year, such as twice.
Deadline: Companies will either set a firm date for all requests to be submitted by (often the end of the calendar or financial year) or offer a specific window of time.
Read our blog post on Integrated reporting for ESG.
How GivingForce can help companies to manage their company matching
At GivingForce, we make it easy for employers and employees to donate to charities and match donations. The process for collecting matching gifts is the same for everyone that uses the portal. The six steps are:
Employee makes a donation to their chosen charities
Employee submits matching gift request to their employer
Charity is verified by the GivingForce Charity Due Diligence Team
Company administrator approves or declines the matching request
Company makes a lump sum donation to the GivingForce Charity Payment Service which is delivered in association with the GivingForce Foundation, an authorised payment agency.
GivingForce Foundation makes the payments to individual charities on behalf of the Company.
Businesses can use the GivingForce platform to keep track of employees' donations and manage requests for their donations, volunteering or fundraising efforts. Businesses can set a budget, matching limits, manage approvals, exceptions, and authorise payments all in one place.
The platform also allows businesses to set matching rules. These may be based on factors such as charity type or geography. It’s even possible to use the platform to see how each charity or nonprofit meets a specific sustainable development goal.
Businesses can also identify and access reports of all company matching activities via a range of legacy and real time reports and dashboards.
Find out more about the GivingForce company matching module and book a demonstration for your company.
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