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A Guide for a Successful Matching Gift Program


									A Guide for a Successful
Matching Gift Program

 Guide to Creating a Successful Matching Gift Program

        he Council of Michigan Foundations             practices. In addition, recent national surveys
        (CMF) is a membership association of           about matching gift programs conducted by the
        more than 400 foundations and corporate        Council for Advancement and Support of
giving programs that make grants for charitable        Education (CASE) and Blackbaud were reviewed.
purposes. Our mission is to enhance, improve, and            The recommendations offered in this Guide
increase philanthropy in Michigan. We often            are a general blueprint for consideration. We
receive questions about matching gift programs,        recognize that implementation and success of any
usually from corporate foundation and corporate        matching gift program will vary depending upon
giving staff recently assigned to start a program or   the structure, goals, and needs of an individual
manage an existing one.                                corporation.
     This Guide has been produced to help                    In addition it must be noted that a number
answer common questions and provide sample             of private foundations, such as the Kresge
matching gift program forms and other resources.       Foundation, and public charitable foundations,
To produce this Guide, in 2001 CMF surveyed            such as Rotary Charities of Traverse City, have
more than 65 administrators and staff members          developed matching gift programs for their staff
of corporate foundations and corporate giving          and members. While not the primary audience,
programs with matching gift programs across the        this Guide should be helpful for these types of
United States to identify current common               foundations as well.


                     Guide to Creating a Successful Matching Gift Program
The Case for Matching Employee Gifts

          eneral Electric started the first matching   Simply stated, matching gift programs encourage
          gift program in 1954. Its goal was to        employees to give on an individual level through
          help the corporation and its employees       the employer’s offer to match each donation at a
support the colleges and universities that had         prescribed level. Employees find such programs
prepared employees for their careers. Many             appealing because they leverage their gifts of time
Michigan companies have since started matching         and money to organizations and causes they care
gift programs, with increased interest in the last     about.
decade.                                                      According to those surveyed for this
       While there are known matching gift             publication, matching gift programs produce
programs in 28 industry classifications, the           important benefits for the corporation and
greatest number are in the manufacturing sector,       corporate foundation, such as:
according to the 2002 Blackbaud Matching Gift              ❖ Increased visibility in the community.
Survey Data Summary. Insurance, financial                      Having the corporation or corporate
services and utilities are the other three large               foundation name on the Matching Gift
classes of industries supporting such programs.                Donor Form spreads word of its role as a
       “Corporations are looking for better ways to            corporate citizen to hundreds or
serve their communities’ needs and the needs of                potentially thousands of nonprofit
their employees,” said Susan Broman, executive                 organizations and their employees, board
director of the Steelcase Foundation in Grand                  members, volunteers, and clients.
Rapids, Michigan, which has had a matching gift            ❖ Increased community impact over time by
program since 1993.                                            including the employee donations
       Companies that have created matching gift               leveraged by the matching gift
programs cite the following reasons for doing so:              opportunity. Once employees begin
                                                               participating in the matching gift program,
                                                               they tend to make ongoing annual
    ❖ Advance their mission;                                   donations.
    ❖ Engage and connect employees in that                   “These matching gift programs are a
      mission;                                         wonderful way for the corporation and its
    ❖ Complete the overall giving program by           employees to be partners in bettering our
      expanding the number of organizations            communities and helping those less fortunate,”
      eligible to receive grants;                      said Scott Seeburger, retired community-relations
    ❖ Be a better corporate citizen;                   manager for Dow Corning Foundation of
                                                       Midland, Michigan.
    ❖ Initiate a “virtuous cycle” that provides
      donations to organizations that help
      educate their employees;
    ❖ Improve employee relations, employee
      recruitment, and employee morale;
    ❖ Foster better public relations to improve
      their corporate images.

                      Guide to Creating a Successful Matching Gift Program                                   2
Designing a Matching Gift Program

        he key to developing a successful               Bloodworth, Secretary/Treasurer of the
        corporate matching gift program begins in       Consumers Energy Foundation of Jackson,
        the planning stage. “Clear concise rules        Michigan. “A successful program begins by asking
and structure are needed from the outset to             the right questions.” And eight key questions
prevent confusion by administrators, employees          have been identified that deal with the design and
and recipient organizations,” notes Carolyn             operation of a matching gift program.

         What kind of organizations do we match?

      clear statement of eligible nonprofit
      charitable organizations and those not eligible
                                                        foundations. For example, Consumers Energy has
                                                        three targeted issues: higher educational
needs to be made. For example, groups often             institutions, community foundations, and food
cited as ineligible are religious and political.        banks. The Steelcase Foundation matches gifts for
       The following four options are examples of       education, the arts, and the environment.
the type of organizations matched depending on          Libraries, art museums and performing arts
the kind of company and nature of the work              groups, historical museums, zoos and botanical
force.                                                  gardens are all examples of recipients according to
                                                        the CASE survey.
       Option One is to match employee gifts to
their colleges, universities and secondary                     Option Three is to match employees’ gifts
institutions. The General Electric Program started      to local United Ways. For example, DTE Energy
this way. The Ford Motor Company Fund                   Foundation matches 50 percent of what
matches employee and retiree contributions to           employees give to United Way, as part of their
qualified universities and colleges. The Dow            program. Twelve percent of the respondents to
Chemical Company Foundation matches gifts to            the CASE survey report that they only use this
colleges and universities on a one-to-one basis.        option.
The 2000 survey of 1,007 companies by the                      Option Four is to match gifts to all
Council for Advancement and Support of                  nonprofit organizations with a 501(c)(3) status in
Education (CASE) found that 47 percent of               the geographic area the company serves. The
companies surveyed limit their match program to         SPX Corporation is one example of the growing
educational institutions. The 2002 Blackbaud            number of companies using this option. While
survey of 11,500 companies using their matching         the CASE survey also reports that only 23 percent
gift database software found that 68 percent of         of the companies surveyed use this option, its use
respondents are focusing their matching gift            is growing.
programs on four-year colleges and universities.               It is important to note that the majority of
       Option Two is to match gifts to targeted         corporations designate their match as unrestricted
nonprofit organizations addressing issues such as       or for the same purpose as the employee’s gift.
the arts, environment, literacy, and community

                      Guide to Creating a Successful Matching Gift Program                                3
         Which employees are eligible?

     he majority of corporations surveyed
     for this publication allow any full-time
                                                             The CASE survey reports that 39 percent of
                                                       respondents encourage corporate directors to
employee with a minimum of one year of service         participate in the matching gift program. DTE
to participate in the matching gift program. Both      Energy is one Michigan company that encourages
the CASE survey (75 percent) and Blackbaud’s           director participation. And 33 percent of the
2002 survey summary (93.5 percent) confirm this        CASE survey respondents report that retirees take
finding. The eligibility of employees rests with       advantage of the program. Because retirees are a
the company because most nonprofit                     growing class, the future financial implications for
organizations do not have the capacity to verify       the corporation must be considered when
employment status.                                     including retirees.

          What should the level of match be?

      n employee could use the whole match for
      one gift to a nonprofit, so it is important to
                                                       $2,000 as the annual maximum match per
                                                       employee. The maximum match payment per gift
have both a minimum and a maximum level for            varies greatly depending on the status of the
individual matches and for each employee. The          employee. The Blackbaud survey reports that 17
common minimum for a matching payment is $25           percent of respondents have $1,000 as the
as confirmed by nearly 50 perent of respondents        maximum budgeted per employee per year—a
to the Blackbaud survey. Comerica Bank for             level confirmed by the majority of respondents to
example has a minimum match of $25 with                the CMF survey.

         What should the ratio of match be?

       hile the matching rate can be tiered based
       on the seniority of the employee, it is
                                                             Some corporate foundations and giving
                                                       programs increase the match ratio at certain times
recommended that every employee be treated             of the year, for example during Thanksgiving or
equitably by having one matching rate. The             the winter holidays. While there are no legal
Blackbaud 2002 summary reports that 73.2               prohibitions on increasing or decreasing the
percent of respondents indicate they match             matching gift amount during a fiscal year, legal
employees on a 1:1 ratio. This ratio is supported      experts note that once a matching gift program is
further by the 2000 CASE survey that reported 85       in place, the corporate foundation or giving
percent use a dollar for dollar match. CMF’s 2001      program is responsible for funding requests
survey also found the matching rate of 1:1 as          properly made during that time period. In
being most typical.                                    addition, the matching amount should reflect the
                                                       matching gift program’s funding levels at the time
                                                       the request was initially filed by the employee.

                     Guide to Creating a Successful Matching Gift Program                                   4
          How often should the match be paid out?

    ecause the volume of matching checks can
    be large, many matching programs pay
                                                     matching gifts semi-annually or even annually.
                                                     Nonprofit recipients and employees indicate that
matches continuously if they have the staffing       knowing the payment is scheduled is more
resources and needed software. While this is the     important than the frequency of payment.
optimum practice, it is not unusual to pay

          What type of gifts should be matched?

     he studies confirm that matching employees’
     gifts of cash or checks are the norm. There
                                                            IRS officials say corporate foundations and
                                                     giving programs should be careful not to match a
are three major categories in the response to this   portion of an employee’s donation that may
question by participants in the Blackbaud Survey.    benefit that person directly. An example of this
   ❖ Gifts made by check or cash are matched         would be the donation to attend a benefit event
     by 97.8 percent                                 where a certain percentage of the donation covers
                                                     the cost of a meal. In response, many companies
   ❖ Gifts made by credit card are matched by
                                                     matching gift forms clearly state that no match
     83.6 percent
                                                     will be provided for donations that provide a
   ❖ Gifts of stock/securities are matched by        material benefit, such as dinners, golf outings,
     60.4 percent                                    tickets or auctions to the employee, a relative, or
       While only a small percentage (7.5 percent)   designee.
in the Blackbaud survey match volunteer time, the           Because many Michigan companies have
Council of Michigan Foundations is receiving a       operations in Mexico, Canada and other countries,
growing number of requests for information from      the question of matching the gifts of employees at
companies interested in supporting their             those plants has been raised. Matching gift
employees’ volunteerism. According to Laura          programs that include non-U.S. employees are
Trudeau, program officer with the Kresge             rare. However, it may be allowed in response to a
Foundation, formerly with Bank One, programs         natural or man-made disaster, and the matching
that match employee volunteer hours are “a           gift program may limit matches to an organization,
wonderful way for many employees with limited        such as the International Red Cross, that has a
resources to participate in a charitable giving      501(c)(3) tax-exempt status with the Internal
program.” One example of this type of match in       Revenue Service and is doing charitable work at
Michigan is the Whirlpool Foundation’s Dollars       those foreign sites. Contact CMF directly for
for Doers Program that will make a one time $500     more information on this issue of including
gift per employee to a nonprofit in which an         foreign operations in your matching gift program.
employee and family has volunteered 50 hours of
service over a six month period. The Whirlpool
Foundation form is included in the appendices.

                     Guide to Creating a Successful Matching Gift Program                                  5
            What should the process be in paying the match?

     mployees and recipient organizations need
     to know there is a designated contact person
                                                         requirements for the recipient nonprofit
                                                         organization to a minimum. If payments include
to help answer questions about the program.              the date, name and contribution amount,
Questions can be minimized however, if the               accounting for the gifts is simplified. “You must
Matching Gift Program form, usually no more              remember that the recipient institution handles
than one page, includes the answers to the               many different types of donations, including
questions covered above. Creating written                matching gifts,” said Melonie Colaianne, vice
program guidelines and requirements for                  president of the Masco Foundation. “Since the
employees that cover everything from eligible            donations are for the benefit of these
types and dollar amounts of donations to steps           organizations and those they help, it is in
and deadlines for submitting match requests will         everyone’s best interest to try and reduce as much
help avoid misunderstandings and ineligible              cost, confusion, redundancy and duplication of
donations.                                               effort whenever and wherever possible. When
       Examples of four such program forms are           possible, make your matching gift program rules,
included in this Guide. In order to reduce the           administrative requirements, guidelines and even
administrative costs to the company or foundation        documentation as much like those of other
of handling what are relatively small gifts to           corporate foundations or giving programs to
recipient organizations, the information needed          provide a consistency for recipient organizations.”
and the procedures for checking on the matching                  For each gift in excess of $250, the com-
gifts should be kept to a prudent minimum.               pany should receive a receipt from the nonprofit
       Each form has a section for the employee to       organization that receives the matching gift. The
complete and then send along with their gift to the      IRS also requires that a corporation, but not a
eligible nonprofit organization. The listing of          foundation, must receive a receipt for matching
eligibility criteria on the form is a helpful reminder   gifts of more than $250 by the date on which it
to the employee using the form. The Blackbaud            files its tax returns, or the actual due date for the
study reports that 91.3 percent of its respondents       corporation’s income tax returns, whichever is ear-
start the process by sending the company’s               lier. This same legal requirement regarding re-
matching gift form to the nonprofit (usually with        ceipts does not apply to foundations, however
their gift).                                             many foundations still require a receipt from a
                                                         recipient institution for internal financial and ac-
      The nonprofit organization then completes
                                                         counting purposes. Additionally, the receipt
the recipient section of the form and returns it to
                                                         should state that no goods or services were pro-
the company for verification and payment. The
                                                         vided to the foundation or corporation in ex-
form should require that the authorized
                                                         change for the donation.
representative of the recipient organization sign
the form certifying that to the best of their                  There are a number of software products
knowledge they are in compliance with the                available to help with the management of
company’s matching gift program criteria.                matching gift programs. While CMF has a policy
                                                         to not recommend a specific vendor, contact
       In addition, a common goal of matching
                                                         information for Blackbaud’s Matchfinder product
gift programs is to keep the administrative
                                                         and several others is included in the Appendices.

                      Guide to Creating a Successful Matching Gift Program                                       6
8          How should the program be communicated with
           employees and eligible recipients?

P    rogram administrators surveyed for this Guide
     identified the single most important factor in
the success of their programs as Communication!
                                                               ❖ A wish to leave a lasting imprint on
                                                                 society by making a significant
Communication! Communication! “Letting                         ❖ A feeling of value and satisfaction
employees and recipient organizations know the                   through helping people; and
specific criteria of your matching gift program will
go a long way in heading off trouble down the                  ❖ Tax benefits.
road,” said Susan Broman. If the program is
paying matches semi-annually, the administrator                  Most companies do not publicize the
should not wait several months to tell an employee        matching gift program to eligible nonprofits but
that a requested match received is to an ineligible       seem to rely on their employees to get the word
organization.                                             out. However, many nonprofits include a list of
      Administrators recommend using internal             corporate matching programs in their annual
communications tools—newsletters, brochures,              solicitation letters as a reminder to any of those
intranets, and meetings—to remind employees               companies’ employees that may be on their
about the matching gift program and to update             mailing lists.
them on program changes and successes. Whatever                  Respondents to the 2001 CMF survey
the communication tool, the matching gift form            expressed concern that increased media coverage
needs to be highly visible and accessible to              would result in escalating matching gift requests
employees. Encouraging employees to participate           that, in turn, could deplete existing budgeted
in your matching gift program, and providing them         funds. In addition, respondents expressed
with the information needed to make decisions             concern that other charitable causes would
about their charitable giving, is another best practice   inundate them with requests for assistance and the
of effective programs. According to those                 perceived negative reaction if those requests were
surveyed, many employees want and need to be              denied. Many companies issue no press releases
educated about the benefits, rules and results of         on matching gifts and allow the recipient
donating their money to worthwhile causes.                organization to handle any media contacts, but do
      “A solid matching gift program begins with          have a designated corporate spokesperson
providing employees educational material to help          available for interviews.
them learn about the need for giving and what it                 A common question for administrators of
will mean for them, their families and their              new programs: how many employees should we
communities,” said Cora Barrow, Contributions             expect to participate? The level of participation is
Administrator for the Matching Gift Plan of the           in many ways directly affected by the amount of
PQ Corporation in Detroit.                                visibility and promotion the program is given by
      Reasons for giving should be a focal point of       the company. It is not uncommon for
any informational dialogue with employees when            participation rates to range between 30 and 50
outlining charitable programs such as a matching          percent of eligible employees. However, there are
grants initiative. Those reasons may include:             examples where that range has increased when the
      ❖ Giving back to a supportive community;            company, with employee input, decides to
                                                          challenge employees to respond to an issue or
      ❖ A desire to perpetuate a certain                  community emergency.
           viewpoint or philosophy;
      ❖ A memorial to a friend or loved one;

                       Guide to Creating a Successful Matching Gift Program                                  7

    n sum, based on the survey of Michigan           ❖ Operate the program with a simple one-
    companies and literature review conducted          page matching gift program form with
    in preparing this Guide, the following             both employee and recipient verification
conclusions are offered about matching gift            sections;
programs. The majority of programs:                  ❖ Provide the form to employees on a
                                                       continual basis through their payroll
   ❖ Match annual gifts of full-time employees         system, newsletter or other communication
     with a minimum of one year of service,            tool;
     and a growing number of programs                ❖ Have a designated contact person for
     include corporate directors;                      both employees and recipient
   ❖ Match employee donations on a 1:1 basis;          organizations.
   ❖ Provide a minimum match of $25 with a             Finally, because both state and federal laws
     maximum of $1,000 in donations              do change concerning charitable giving, the
     per employee per year;                      Council of Michigan Foundations recommends
                                                 review by legal counsel at least every other year to
   ❖ Will match employee gifts of cash or
                                                 ensure adherence to all relevant rules and
   ❖ Fund educational institutions, although
     the number of programs matching all
     501(c)(3) nonprofit organizations in a
     company’s service area is growing;


                   Guide to Creating a Successful Matching Gift Program                                 8

    Sample Forms

       I. Consumers Energy Foundation

       II. Whirlpool Foundation

       III. Steelcase Foundation

       IV The Kresge Foundation

     Software Vendors

       V. Software Contact Information

        Guide to Creating a Successful Matching Gift Program
Appendix I—Consumers Energy Foundation

             Guide to Creating a Successful Matching Gift Program
Guide to Creating a Successful Matching Gift Program
Guide to Creating a Successful Matching Gift Program
Appendix II—Whirlpool Foundation

             Guide to Creating a Successful Matching Gift Program
Guide to Creating a Successful Matching Gift Program
Guide to Creating a Successful Matching Gift Program
Guide to Creating a Successful Matching Gift Program
Appendix III—Steelcase Foundation

              Guide to Creating a Successful Matching Gift Program
Appendix IV—The Kresge Foundation

             Guide to Creating a Successful Matching Gift Program
Appendix V—Software Contact Information

    Blackbaud, Inc.                           MicroEdge
    Matchfinder                               Gifts
    Financial Edge                            MicroEdge, Inc.
    2000 Daniel Island Drive                  619 West 54th Street, 10th Floor
    Charleston, SC 29492-7541                 New York, NY 10019
    800/443-9441                              800/899-0890, ext 250
    FAX: 843/216-6111                              

    Bromelkamp                                NPO Solutions, Inc.
    Pearl                                     FIMS
    106 East 24th Street                      89 North State St.
    Minneapolis, MN 55404                     Concord, NH 03301
    612/870-9087                              603/224-3400
    FAX: 612/870-9616                         FAX: 603/228-5718                           

    CyberGrants, Inc.
    Two Dundee Park
    Andover, MA 01810
    FAX: 978/824-0301

    Grant Administrator
    Dyna-Quest Technologies, Inc.
    365 Boston Post Road, 144
    Sudbury, MA 01776
    FAX: 978/443-8634

                  Guide to Creating a Successful Matching Gift Program
      The Council of Michigan Foundations would like to give a special thanks to the administra-
tors, directors and employees of the corporations and/or their related foundations that partici-
pated in our survey and provided valuable information and suggestions for a successful matching
gift program, including:
Amerisure Mutual Insurance Company                        JSJ Corporation
Charles Stewart Mott Foundation                           Karmazin Products Corporation
Colgate-Palmolive Company                                 Kellogg Company
Comerica Charitable Foundation                            Kmart Corporation
Comerica Inc.                                             Masco Foundation
Consumers Energy Foundation                               Mazda (North America) Inc.
Consumers Energy/CMS Energy                               Mead Corporate Foundation
Continental Teves Inc.                                    Monroe Auto Equipment Company
CoreStates Financial Corporation                          Nationwide Mutual Insurance Company
DaimlerChrysler Corporation                               Northern Telecom Inc.
Detroit Edison Company                                    PACCAR Inc.
Difco Laboratories                                        Peterson Consulting Ltd. Partnership
Dow Chemical Company                                      Pharmacia Foundation
Dow Corning Corporation                                   Proctor & Gamble Company
Eaton Corporation                                         Sara Lee Corporation
Federal-Mogul Corporation                                 Scientific Brake & Equipment Company
Fleet Financial Group                                     SPX Corporation
Ford Motor Company                                        Standard Products Company
General Motors Corporation                                Steelcase Foundation
Georgia-Pacific Company                                   Steelcase Inc.
Gerber Products Company                                   U.S. Bancorp
Haworth Inc.                                              W.K. Kellogg Foundation
Ingersoll-Rand Company                                    Whirlpool Corporation
J.P. Morgan Chase & Company                               Wolverine World Wide Inc.

    In addition, the following national philanthropic organizations were contacted in preparing this

American Association of Fund-Raising Counsel
Association for Research on Nonprofit Organizations and Voluntary Action
Council for Advancement and Support of Education
Council for Aid to Education
Council on Foundations
Internal Revenue Service
Michigan Attorney General’s Office
National Association of College and University Business Officers
National Center for Charitable Statistics
National Charities Information Bureau
National Commission on Philanthropy and Civic Renewal
National Committee for Responsive Philanthropy
National Committee on Planned Giving
National Council of Nonprofit Associations
Society of Fund Raising Executives

                     Guide to Creating a Successful Matching Gift Program
                      Council of Michigan Foundations
                                  P.O. Box 599
                             Grand Haven, MI 49417

                            Fax: 616/842-1760 or 842-3010

                                    Written by:
                                  Robert S. Collier
                                Michael B. Gallagher
                                 Vicki J. Rosenberg

                                    November 2002

Cost: CMF members: Download at no cost from, “Member’s Only” section
                   Print copy available from CMF office at $5 each
     Non-members: Order from CMF office at $15 each; pre-payment required
              Guide to Creating a Successful Matching Gift Program

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