[Note: I (the primary author) am writing this entirely in a personal capacity. Funding for the bounty and donations mentioned in this post comes entirely from personal savings and the generosity of friends and family. Colleagues at Open Philanthropy (my employer) reviewed this post at my request, but this project is completely unaffiliated with Open Philanthropy.]
In 2023, GiveWell reported that it received over $250M from more than 30,000 donors, excluding Open Philanthropy. I expect (though haven’t confirmed) that at least $50M of this came from unmatched retail donations, meaning from individuals who don’t work at a company that offers a donation match. I can’t help but hope that there may be some way to offer these donors a source of matching funds that wouldn’t otherwise go toward charitable causes.
Over the last couple of years, friends and I have spent >100 hours looking into potential legal, collaborative corporate donation matching opportunities. I think there may be promising ways to partner with corporate donors, but I haven’t found a way forward that I am comfortable with, and I don’t think I’m the best person to continue work on this project.
Some donors may be choosing to give through surrogates (friends who work at companies that match donations) without understanding the risks involved. My understanding is that there can be several (particularly if donors send surrogates money conditionally, e.g., by asking them to sign an agreement to give through their company’s match):
- The surrogate might inadvertently violate their company’s terms for donation matching.
- The surrogate, donor, or company might fail an IRS audit if they don’t correctly report the donations + match.
- The surrogate or donor might be sued by the company.
- The company might discontinue its matching program and/or claw back funds from recipient nonprofits.
“Getting to yes” with a corporate partner in a completely legal, transparent, and good faith way could direct significantly more resources to organizations improving the world, and reduce the risks from doing so informally. Because of this, a few friends and I are excited to offer a $100,000 bounty to anyone who is able to create an opportunity for retail donors to get donations matched by a corporate partner that fulfills the following conditions:
Criteria for bounty eligibility
- The corporate partner is an aware and enthusiastic participant. I think there are strong reasons why companies might be excited about a collaborative giving initiative.
Per DoubletheDonation, 65% of Fortune 500 companies offer a matching gifts program, and corporate philanthropy exceeds 20 billion dollars per year. Much of this giving takes the form of a donation match; e.g., a number of blue chip companies offer a $10,000 annual donation match to their employees - accounting for the company’s tax deduction, this donation match often represents less than 3% of the average benefit-eligible employee’s costs to the company (comp, benefits, travel/equipment expenses, prorated hiring costs, etc.) For this modest offering, companies enjoy valuable upsides:- Strong PR (e.g., People Magazine’s top 100 Companies that Care, or Engage for Good’s Halo Awards)
Improvements in staff morale/retention[1]
- Qualifying for certain ESG financial classifications
- Doing good in the world
If a company is willing to match $10,000 per employee per year, they may be flexible about whether the money comes from the employee or others in the community — the company’s contribution is the same either way and the company still enjoys the upsides of giving.
We agree to the particular cause(s), recipient organization(s) and corporate donor(s) in advance. (As context, foundations like Soros, Gates, and Hewlett offer generous employee matches. I would not feel comfortable approaching those foundations for this project, but I would feel comfortable approaching a company like Coca-Cola[2].)
You’ve gotten approval on a way forward from multiple lawyers specializing in tax and nonprofit law. I would also want to speak with these lawyers. In particular, you have found a solution for addressing US tax law’s requirement of donative intent for both the employee and employer’s contribution.
- The scale of corporate matching you achieve successfully absorbs at least $1,000,000 of corporate funding in one year for causes/organizations that we agree to in advance, at a minimum of a 1:1 match. (E.g., a $500k contribution from donors which a company matches 2:1 would count. A $2M contribution from donors that a company matches at 1:2 would not).
- I would find the necessary donors for $1,000,000+ in donations. This donor base would be comprised of a couple dozen personal contacts who have pledged to donate a share of their income or savings.
- Of course, the ideal outcome of this project would be a much more absorptive match that persists for multiple years, similar to Facebook’s old Giving Tuesday format.
Here’s what I envision success could look like:
- A partner company hosts an event (say, on Giving Tuesday) where the company agrees to match a pledged pool of donor funds, or
- A partner company changes their donation match policy to explicitly allow staff to donate money on behalf of strangers, this is cleared by multiple nonprofit/tax lawyers, and a sufficient number of employees opt in to lend their match.
We are open to compensating strong candidates for their time to look into this in addition to paying a bounty. We would probably reduce the size of the bounty for candidates who are also being paid hourly. The types of candidates I could imagine being a great fit include:
- Mid- to late-career professionals with connections to decision-makers at companies that could offer a match.[3]
- Legal specialists.
- Someone who has helped startups develop their donation matching programs, and may be able to work with a company to build this type of communal donation program from the ground up.
How to get in touch about this opportunity
If you are interested in speaking with me about pursuing this bounty, please fill out this brief expression of interest. I’m happy to share more of what I’ve learned so far on a call with selected form respondents.
Key caveats:
We will only pay the bounty to someone who we have spoken with before starting this work. We reserve the right to withhold payment if a solution does not meet our criteria, feels risky to us personally, or if the opportunity wasn’t generated by the bounty-claimer. We do not plan to sign a contract guaranteeing payment if certain criteria are met; however, we are happy to provide references and potentially escrow the bounty to a trusted mutual contact.
Thanks in advance for considering!
- ^
A friend who helped start the foundation of a notable tech company told me “more than half [of the employees at my company] said that the company's CSR/philanthropy was one of their favorite and most proud aspects of the company culture. It came up a lot in exit interviews etc... it was also a closing point that our recruiting team used a lot for candidates who were on the fence!”
- ^
I am mindful of the optics of partnering with certain organizations, and of how the partner organization may otherwise use matching funds.
- ^
I've heard that leaders of client-driven companies where branding is especially important, such as management consultancies, may have high autonomy to choose causes for their company's giving.
This seems great to me, kudos for organizing. I'm sure a bunch of people will be interested to see the outcome of this.
If it's successful, I imagine it might be able to be scaled.
I don't really understand what would be in it for the corporation, but I haven't thought very deeply about it. (This is all from a US perspective. I'm using Coca-Cola as the company in my examples given its use in the post, and GiveWell as the potential charity).
Under I.R.C. 170(b)(2)(A), most corporations can deduct charitable contributions up to 10% of their taxable income. More discussion here. Maybe companies could try claiming their matching donations as an employment-related business expense instead of as a charitable donation per se, but I doubt (e.g.) Coca-Cola is running up against that 10% cap on the latter. I suspect that few corporations need the matching program to get credit for donating more from a tax perspective.[1]
If Coca-Cola wanted to give money to GiveWell (conditioned on strangers also giving money), trying to do this through an employee-matching system rather than through a more direct method seems awfully convoluted to me. I'm guessing Coca-Cola would prefer to give in a way that maximized the reputational benefits flowing it to / made its donation look as big as possible, and that experts in fundraising could tell them how to best accomplish that. I'm not sure why Coca-Cola would want to reinvent the wheel here.
If for some reason Coca-Cola wanted to give more money through employee matching in general, then it would have the option of increasing the generosity of their matches for authentic employee donations. From its perspective, that seems a superior option in light of the usual goals of an employee-match program. To the extent that the corporation thinks there is PR benefit from higher employee donations, that isn't going to fly when it comes to light that the employees were acting as mere conduits for strangers. Moreover, one would expect more of an employee morale/retention boost for charities the staff strongly cared about (and their willingness to donate some of their own money is a signal about existence and intensity of staff preference).
So I'm not sure I see a clear use case here unless an employer (1) wants to give money to specific charities we endorse, (2) wants to do that through an employee-matching program for reasons that I am not predicting, and (3) feels that public disclosure of what is going on would not undermine the employer's objectives. If I'm missing something, then figuring out what it is might be helpful in thinking through strategy.
That being said: I assume that a company that is willing to match up to $10,000 per year first obtained projections on how much that policy would actually cost on a per-employee basis. I doubt they budgeted close to $10K/employee/year for this, although I don't know what the participation rates are in reality. This site suggests ~31.25% of matching funds might be claimed.
The most obvious exception would be those without taxable income. But even then, I suspect there may be less risky ways to justify charitable donations as an ordinary business expense than through what sounds a whole lot like straw donors. Cf. Marquis v. Comm'r, 49 T.C. 485 (1968) (charitable deductions allowed as business expenses, albeit under somewhat unusual circumstances).
Thanks for this comment Jason, you raise a valid point. I do think this will be challenging — part of the motivation behind this bounty was that friends and I don't think we could facilitate large-scale corporate donation matching through our own connections. However, there is some precedent for companies matching non-staff funds, and I can imagine a few theories of success:
Last year, Walmart launched a campaign to match up to $2.5M in customer donations to the Red Cross. Amazon, Google, Facebook and others have run similar matching programs for specific nonprofits that are open to the public. PayPal has run public Giving Tuesday donation matching campaigns similar to Facebook’s old Giving Tuesday format.
There is a law in India requiring certain companies to donate at least 2% of net profits to registered nonprofits; many US companies set aside a pot of resources (in tech it is often 1% of profits) for giving. So in some cases, CSR leadership merely decide how to allocate existing resources for corporate philanthropy (though in other cases, encouraging a company to give could grow the total amount they donate). With low confidence, I would guess that causes are often chosen by a single passionate senior leader at a company or by an internal champion persuading a small group of senior decisionmakers.
I’m unsure about the extent to which retail donors’ matching funds incentivize companies to give, but I would guess that it helps at least somewhat. Executives might be excited by a $10M company-branded initiative that only "costs" the company $5M. I also think there are ways to frame retail donor co-funding as coming from community members or customers, rather than from strangers.
I don’t have a view on whether it’s more tractable to persuade companies to pledge a pot of matching funds or to change their employee donation matching policy. I could imagine that an initiative allowing employees to lend their unused donation match for an org-wide giving event would be meaningful to many staff members, and could lead to greater orgwide morale gains than a “use-it-or-lose-it” donation match policy. I could also imagine that certain early-stage startups may be openminded about designing their donation match to include a public matching component.
Ultimately, I’m unsure about how realistic this idea is or how likely the bounty is to get claimed. But we wanted to offer this bounty in case it might cause someone reading this post to work some magic and grow the set of resources going to great nonprofits!
I imagine that there would be willingness to do a matching-raised-funds program, where the company pledges to match funds that employees have pledged to charities. For example, someone chooses to do a 10k run for a charity and gets friends and family to pledge to the charity, or chooses to do a birthday fundraiser in lieu of presents. This seems like it would qualify for the bounty, and the framing seems less weird than what you proposed, even though it's essentially identical.