Making charitable donations as easy as 401(k) contributions

Employees want to use their money for good, and employers who support those efforts can help make their impact go even further. 

Seventy-one percent of employees say it's important that they work for a company that supports charity and volunteer initiatives, according to data from America's Charities. In 2022, corporate giving programs gave $21.08 billion, according to the National Philanthropic Trust; currently, 65% of Fortune 500 companies offer a company-sponsored donation program. 

To ease the process of giving and ensure employees can send their contributions to an organization that aligns with their values, charitable giving platform Daffy launched Daffy for Work. Employees can set aside money into a personal fund, which employers can then match. Any dollars set aside can be directed to the charity of an employee's choice, eliminating the need for paperwork or other documentation. 

"Most employees want to believe that they're working for a good organization, for a company that makes a difference that matters," says Adam Nash, co-founder and CEO of Daffy. "A commitment to giving in your community is one of the strongest signals that your company cares about all the stakeholders and people who touch the company." 

Read more: Want to combat burnout? Empower employees to volunteer

While well-intentioned, traditional giving programs can be cumbersome for employees to navigate, and require documentation or a disclosure of the charity they want to give to. The result is that $4-7 billion of corporate matching goes unclaimed by employees, according to Double the Donation, a matching fund database. 

"The fundamental problem with the existing giving programs is that they are kind of like expense tracking," Nash says. "You're asking your employees to go in, keep the receipt for their donation, go into some corporate site, upload this receipt, and then hope that money will come out on the other end. There's a lot of friction there." 

Nash says they modeled Daffy for Work in the way that 401(k) accounts are set up — employers cover any set up fees, and employees have access to a tax-free way to invest  money for charitable purposes. Employees can then direct their funds to any charity within the U.S. 

"We help employees pick out their 'giving goal' of how much they give to charity every year, and they can put that money aside every week, every month, or every quarter," Nash says. "Then anytime they want to give that money to an organization or cause they believe in, they have that money already put aside.They don't have to tell their company which charity they gave their money to and they don't have to upload a receipt." 

Read more: How to revamp your corporate philanthropy policies

If employees set aside just 1% of their paycheck to direct to charity, an additional $100 billion would be given to charity each year, Daffy's research found. The platform's research also revealed that when employees set a goal for how much they plan to give, they give 32% more than they would have otherwise. 

"If all of us gave to charity in the way that we put money aside for retirement or our kid's education, that's $100 billion in the U.S. alone," Nash says. "We know that people love our product and that they give more when they use our product. Extending it to the workplace helps companies make giving part of their company culture and their talent brand." 

Employers also benefit from engaging in charitable causes without having to make a political statement or taking a stance on social issues, especially in today's contentious climate. A tech solution is a win-win for employees, organizations, and most importantly, people in need. 

"Employers don't want to be involved in the details — they love the idea of having a culture of giving and incentivizing their employees to be more generous, but they don't want to get in the middle," Nash says. "Let's have the best of both worlds, while putting real financial resources behind it."