Tap into the Untapped: Corporate Donation Matching by the Numbers

Tap into the Untapped: Corporate Donation Matching by the Numbers

October 21, 2020
26 minutes
EPISODE SUMMERY

Adam Weinger · President, Double the Donation | Double the Donation's statistics on corporate donation matching offer a pretty compelling reason for nonprofits to venture down the donation matching rabbit hole. Take, for instance, the percentage of donations that are matched: 1.31%. Or the funds left unclaimed each year: $4-7 billion. Or the increase in average donation amounts when nonprofits mention matching gifts: 51%.

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EPISODE NOTES

Adam Weinger's experience working for one of the heavy hitters in the corporate donation matching world, Capital One, led him to see the problem from a donor's perspective: while the company had a generous matching program, it got lost in the daily minutae and myriad communications from the company to its employees. Then, once he caught wind of the program, Adam didn't quite know what to do or how to claim the funds.

So, where's the breakdown? How can nonprofits raise donors' awareness of these funds, and how can Double the Donation help turn donation matching into a real source of income? Adam, President of Double the Donation, and Justin Wheeler, CEO and Co-founder of Funraise, sit down to hash it out.

Tune in to hear Adam Weinger's incredible case study, get guidance on centralizing your corporate donation matching into a unique revenue stream, and shine a light on ways that you can grease the wheels for your donors and close the gap on that unclaimed mountain of cash.

Oh, and those corporate donation matching stats we mentioned... you've gotta check them out for yourself.

TRANSCRIPT

Hello, I'm Justin Wheeler, and welcome to this episode of Nonstop Nonprofit. Today, I'm sitting down with Double the Donation's president Adam Weinger explaining the business of corporate donation matching. If you're not focused on corporate matching, you're not alone. Only 1.3% of individual contributions are matched at the average nonprofit, leaving an estimated $4-7B dollars in matching gifts on the table each year. Now, I know that sounds like some sort of science fiction, because who wouldn't want to snap those funds up, right? And that's exactly what Adam and I are discussing today. Why aren't donors, nonprofits and companies aware of these funds? And how does Double the Donation help nonprofits turn donation matching into real source of income? Adam even gives us a doozy of a case study in the Leukemia and Lymphoma Society. It's interesting to hear what led them to view corporate matching as a full revenue channel and the resulting increase that they saw. And when I say interesting, I mean, holy mackerel, jaw-dropping beyond belief, incredible. That type of interesting. In this conversation with Adam, while we go down the rabbit hole of corporate donations statistics, I encourage you to check the numbers for yourself. And we shine a light on ways that you can grease the wheels for your donors and close the gap on that unclaimed mountain of cash. Let's dive in!

Justin Wheeler Hey listeners, so excited for today's podcast. We are speaking with Adam Weinger from Double the Donation and today we're going to talk about all things company matching. Adam, thank you so much for joining the podcast.

Adam Weinger Absolutely. Thanks for having me.

Justin Wheeler Before we dive into your business and just the company match landscape. Tell us about yourself, who you are and what got you started in this career.

Adam Weinger Absolutely. So I'm Adam. I live in Atlanta where I went to college at Emory, and I stumbled into corporate matching after college. I had my first job at Capital One and I was making different donations to different nonprofits. I was volunteering as a big brother in the Big Brother Big Sister organization. And one day, about 18 months into my job, a colleague said, Hey, Adam, do you think Capital One will match or did you know that Capital One will match that gift? And it was the first I really heard about it. And it kind of set me down this path to talking to different nonprofits about employee matching gift programs, what they were doing, what the opportunity was. And now fast forward eight or nine years. Here we are.

Justin Wheeler So basically, you learned that your company would match your donation and you had that moment of, oh I'm sure there is other corporations that would match. And so you started your business to tell us more about your company and the services you guys provide.

Adam Weinger Yeah. So when I made my different donations and I first heard about the companies matching gift program, I printed off the paper form, didn't know what to do with it. It sat on my desk at the office. And eventually, you know, I threw it away. I'm a little embarrassed to admit it. I didn't know what to do with it. No one followed up with me about it. And two months went by and I said, okay, I'm not going to worry about this. So at Double the Donation, we tried to solve some of those challenges. So how can you raise awareness among donors? How can you inform them of what the company's process is? How can you help donors submit matches? And we build and sell software to nonprofits to help them promote matching gifts and ultimately bring in more money from those programs.

Justin Wheeler Yeah, and it's fascinating. I saw you guys as a website that anywhere between four to seven billion dollars is left on the table from corporate matches. Talk to us about that. And how do we fix that problem? Because that is a massive problem, especially in times like now where nonprofits are so under-resourced as a result of the economy. So how can we take that money off the table?

Adam Weinger Yeah, it's a staggering amount. And it's spread out across thousands of companies everywhere from, you know, the 65%t of Fortune 500 companies that have employee matching gift programs to 50, 100 person companies that have them. And there's challenges across the board. You know, donors have no idea if their company has a program. Nonprofits don't know which companies have them. Companies only mentioned it once per year or on page 37 of the employee benefit book. Nonprofits don't have anyone who owns matching gifts at the organization. So all those things kind of come together. And what you see is only a small percentage of donors who work for a company with the matching gift program, know about it, and ultimately go and submit their match. The key is to tackling all of those different barriers.

Justin Wheeler That makes total sense and obviously at Funraise, we're big fans of the business as a partner. We've leveraged your guys this technology into our giving experience. So when donors give it's a field on the giving form where they can essentially lookout to see if their company has a matching policy or program. And we've seen pretty good conversion. But on top of that, even if Funraise didn't put that in the field and we were partnered, you would still get access to whether or not your company matches. So how does the process typically work when, you, an individual puts in their business name, Google, for example? And what happens after the donation is complete? How does the process kick-off?

Adam Weinger Yeah, so the key is really solving the challenges around identifying which donors are matching gift eligible, knowing where those donors need to go to submit their match and kind of helping them get there so that they can spend the 30 seconds that they need to tell Google, hey, I made a gift to $500, it should be match eligible, I'd like you to match it. So as someone's going through the donation process, and you mentioned it there is a field on the donation form where you ask the donor to see if their company will match their gift. So it pulls from our database, we have thousands of companies in our database representing somewhere between 15 and 19 million individuals in the workforce who work for a company with a matching gift program. So we identify where they work. And then immediately after the donation, we're able to provide them and say, hey, Joe. Hey, Sally, did you know Google has a matching gift program? This $500 gift can be doubled. Here's where you need to go. Here's the information that you need. Please spend the 30 seconds. So you start working and solving that ID, informing donors, following up with donors, tracking it. They've submitted it. And you start to tap into some of that four to seven billion dollars.

Justin Wheeler Got it. That makes sense. So how big is the market? We know how much is being left on the table. How big is this market when it comes to corporate matches?

Adam Weinger So today, I would say somewhere between one to three billion dollars every year is being submitted by donors to their company and getting matched. So you're kind of looking at around 20% of donors who are eligible are submitting their matches. We've kind of looked at different organizations of different sizes, universities, and you see some of the larger peer-to-peer organizations raising a couple million dollars and K through 12 schools raising, you know, $30,000-40,000.

Justin Wheeler So 20% are matching. Is it because the remaining 80% just don't know if their company's match? Or is that the primary driver, would you say?

Adam Weinger I think there's two primary drivers. One that donors have no idea. So if you work for Google or you work for Home Depot, the only times that you really care about the company's matching gift program is the day you start when you get the 80-page benefit book and matching gifts are a little paragraph on page 37. And maybe if you're lucky, the company sends out one email about it over the course of the year because they have so many business related updates to send out to their team members. So there's kind of that lack of awareness, which is something that I personally experienced when I was that Capital One in that my first 18 months, I didn't even know the company had to program. And then once I found out about it, no one really followed up with me. I didn't know how to submit my match and therefore I did it. So you're seeing that across all sorts of donors for pretty much every company.

Justin Wheeler Right before this interview, I was looking at our own data to see what what corporations are leading the way across our customer base, and I was kind of surprised, actually saw what Disney was one of the leading corporations, followed by Google. I thought Google be number one because they have a pretty rich matching program. Is it generally the larger corporations that are making up most of that one to three billion or is it spread out across the industry?

Adam Weinger So you definitely have the larger corporations that employ a lot of folks. So you look at Home Depot, they employ a hundred or two hundred thousand individuals, probably the same with Disney. Google employees a lot. So I do believe and we did some research into this, I believe it was like 70% of the opportunity was coming from the top 500 companies in our database. And then, of course, you know, you have the smaller companies that employ 100 individuals where they still have challenges with promoting matches.

Justin Wheeler Got it. So we talked a little bit about how kind of Funraise and your business integrate, if a nonprofit is working directly with you, talk to us about what that looks like and what sort of product is offered when they're working directly with your company.

Adam Weinger Yeah. So at the core of what we do is we build maintain a database of companies that match donations and then we help organizations raise awareness and promote those matches to their donors. So if an organization works directly with us, they have access to our database of companies that have programs, the forms, the guidelines, the instructions, eligibility criteria, minimums, maximum. So if you think about Disney, they have a minimum match of $25 dollars, but they'll match up to $25,000 per an employee, per year.

Justin Wheeler Wow!

Adam Weinger And they match gifts from full time and part time employees. So there's kind of a lot there and a lot of of an opportunity. So organizations who work directly with us kind of get access to that information and then most of our clients work with a partner like Funraise where we have a really awesome integration, where that information is being able to be presented during the donation process and followed up on.

Justin Wheeler I can definitely speak to when we are demoing Funraise company matches is definitely one of those things that catches individual's attention very quickly. And just like you said, you know, there's usually no one dedicated to it and the person maybe that is taking point on it, it's such an incredibly manual process that it almost doesn't even feel like it's worth it to them. And so when we get to this portion of our demo talking about how it's integrated into payments, it's just a light bulb moment for a lot of fundraisers.

Adam Weinger Yeah, I mean, the Funraise experience is a really elegant one. You guys did a great job. Your team did a great job of integrating our tools into the Funraise donation process.

Justin Wheeler So tell us about if you can if there's a particular case study or customer that you can share, that's really taken this as a serious fundraising channel. I think a lot of times nonprofits think about this more as a passive, kind of be treated passive, and therefore, you know, the return isn't going to be as great if there's not a real strategy behind it. So is there a customer or example that you can share that really illustrates the more you invest in this channel, the more return you will see?

Adam Weinger Yeah, I mean, I think you're right. It's oftentimes a very passive source of fundraising for most organizations. And I get it right, they're matching gifts are not as sexy as hosting a new fundraising event or a night out somewhere. You know, when I think about organizations, we've got a lot of good examples. One that really stands out to me is the Leukemia and Lymphoma Society. So we started working with them a little bit over three years ago. So they have 56 different chapters scattered across the U.S., and at the time, they were bringing in about three and a half million dollars per year in matching gift revenue. They actually went on and hired a consultant to evaluate what was preventing them from raising more. And really discovered it was localized in each of their 56 chapters. Nobody owned matching gifts. They didn't know where any of their donors worked. They didn't have anyone following up. Kind of the only thing that was done was hopefully kind of verifying the matches and receiving the funds. So they put a pretty big project into place. They have a lot of large peer-to-peer fundraising events and they put a robust strategy around how can we identify which donors are matching gift eligible during the donation process and then how do we follow up with those donors? So they centralized all of the matching gift efforts into a national office. They figured out kind of some business rules. So which donor should they follow up with personally versus which should they let our system kind of automatically drive to completion. And ultimately, over two and a half years, that grew from $3.5M dollars to about $7.3M dollars in matching gift revenue.

Justin Wheeler Wow! Which is larger than about 90% of nonprofit budgets.

Adam Weinger Yeah!

Justin Wheeler So that's pretty impressive. So the more effort you put into it, obviously, the more you're gonna get out of it. What would be the reason why someone maybe does personal follow up vs. letting the system kind of complete the process? Is it just because it's typically a major donor, more handholding? Or what would be the sum of the reasons why you would approach a more manual process versus automated?

Adam Weinger Yes. So I think most organizations do want to have a personalized touch for their major donors. So within our system, we do have some rules and criteria that an organization can set up that says if the gift is more than $5,000, maybe don't do anything automated, right. You don't want to reach out to someone who just gave $1,000,000 to your organization with any type of automated -mail. So there's definitely that component. And then there's a component where, you know, even if we provide the donor with exactly what they need and we take them where they need to go, ultimately they have to kind of hit submit because it is an employee benefit and not everyone does it. So LLS, Leukemia & Lymphoma Society, has some business rules where they say, let's follow up with every opportunity that represents more than, say, $1,000. Let's pick up the phone and call those donors. Thank them for their original gift and see what they can do to help kind of push that forward.

Justin Wheeler Got it. That makes total sense. So I'm curious to know about sort of the impact Covid-19 has had on corporate matching? As corporations are, and as we've seen, looking for areas to cut, have they cut back on their matching dollars or has that been largely on an unimpacted by Covid-19?

Adam Weinger Yeah, it's been really interesting to watch and I think we've actually seen kind of both sides of things occurring. You have some industries that are really hurting. Take the airline industry, in a very tough position. So what we have seen as those companies cutting back on their matching gift program and then you have other companies that are doing fairly well. Take technology as an example. So you've seen companies like Google and Apple increasing their limits or increasing their ratios. You've seen some companies rolling out new programs. So I believe I just heard that Comcast, another Fortune 500 company, just rolled out a permanent employee matching gift program, which they had tested right when Covid-19 hit. So overall, when we look across our database, our database representing employers and employees that could get their gifts matched has actually grown over the last six months by a little bit.

Justin Wheeler Oh wow. That's, that's very encouraging. I was thinking, it could be a good strategy for organizations maybe who are losing revenue in other areas to look through their donor database to figure out where those donors work and to see if those gifts are eligible. So is there a timeframe on when a gift could be matched? Like I mean, is it within the year or are there some other time frame rules that apply to matching?

Adam Weinger So, two, there's kind of a couple common rules. One is within X amount of time. The most common being either six months or twelve months. And then the other one that's really common either by the end of the calendar year or by, say 30 or 60 days after the end of the calendar year. So some companies will say you have until February 15th to submit your match from 2020, but they're actually pretty generous periods of time.

Justin Wheeler Yeah, that definitely allows organizations to think through, even as you think about your year-end fundraising strategy, why not? You know, as part of your segmentation, reach out to donors that haven't we haven't received matching donor donations from but our eligible. Might as well. I mean if there's one thing we learned from LLS, you can double your matching donations if you just put a little effort into it.

Adam Weinger Yeah, we've actually seen a lot of work organizations kind of double down on matching, especially organizations who had a peer-to-peer component or which relied on in-person fundraising. Yeah. So we've heard from some of those organizations that they've actually kind of allocated some staff time towards matching gifts to kind of replace the time that was going towards in-person events. So when those events were getting canceled. Kind of giving the list of the top opportunities to different staff members in different markets to kind of follow up and pursue those opportunities where appropriate.

Justin Wheeler Got it. Another fascinating stat I found on your guy's site, you talked about how matching gifts actually increase, the mention of matching gifts, increase the original size of the donor's donation. What's the logic there? Is it more for my money type of thing? Or what else are you seeing in the data that leads you to see this?

Adam Weinger Yeah, I think one of the things that, you know, most donors do when they give us that they care about course, you know, the ability to make their gift go even further, they're able to make an even bigger impact. So you've seen a lot of studies out there where there have been multiple forms of solicitations going out, where it's an appeal for donation versus an appeal with a matching component that indicates that having a match represents a bigger opportunity to kind of bring up that average dollar amount. So we've had some of our larger clients as well, run different AB tests by incorporating our tools into their donation forms. And I've just seen when a donor realizes that their company will match their gift, that the conversion rate from that moment to the donation submission is higher and the average gift amount is higher.

Justin Wheeler Very interesting, because we've spoken to a lot of organizations who don't like it on the giving form because they feel like it's actually going to decrease conversion because it's more friction. The research you guys have done is showing the opposite. Where did the experience actually isn't adding more friction, it's actually motivating & incentivizing the donor to complete the donation because more money will go to the cause.

Adam Weinger I think it's a common question from organizations. I think there's this kind of natural default towards remove and strip away every possible field. I think there's a lot of validity behind kind of making for a very streamlined, easy donation process.

Justin Wheeler Yeah.

Adam Weinger But I also think that there's a lot of benefits in terms of being able to test. I'm sure fundraising has tested the donation flow to try to optimize that flow.

Justin Wheeler Yeah, I hadn't thought about it in that regard where kind of the psychology of your gift. I mean, your gift being doubled by your company actually, you know, obliges you to complete it because there's more at stake at that point. That is a pretty fascinating point. As nonprofits are listening to this, whether they already have a strategy in place for company matching or they're just getting started, what's one thing that every nonprofit can do to really optimize this experience for their revenue?

Adam Weinger I think a great starting point is to decide who your organization is responsible for matching gifts and who's accountable for bringing in those dollars and raising those dollars. I think if you were to ask 100 hundred organizations and 90 of them would say that there's not someone on their team who's responsible for growing their matching gift revenue. There may be someone responsible for processing it, recording it in the donor database, but not going after those dollars and raising it. And I think it's an opportunity for organizations of all sizes. One of the things that I'd love to see is K through 12 schools and who have a PTA or PTO, oftentimes have a matching gift coordinator or chair, a volunteer at the school whose job and kind of core responsibility for that year is bringing in as many matching gift dollars as possible. So I think it's something that every organization could do. If you're small, either with the volunteer or with an intern. If you're larger, kind of just defining what the organization kind of owns that matching and gift revenue line item.

Justin Wheeler Do you guys have any research or any information around if organizations, like let's say, you know, average organization raises a few million dollars annually, at what point does it become a full-time job to have someone just managing matching?

Adam Weinger Yeah, so I'll go back to the LLS example. So when they had it scattered across there, 56 different chapters and they also had someone in Nationals, they had the equivalent of about eight full-time employees focused on matching gifts. So it was eight full-time, you know, twenty hours here, 40 hours there, 10 hour ethere, it rolls up into eight, and that was bringing in about $3.5M dollars. When they went to centralize that, they were able to kind of bring that down to about two and a half individuals, bringing in about $7.3M dollars. So a lot of it came from the centralization, putting someone in charge of it, then becoming more familiar with matching gifts. Putting the strategy in place. So there are a hundred million dollars a year in individual fundraising. So it is definitely kind of a part-time role for most small to mid-sized organizations, especially if you kind of focus your time on those $500 opportunities or the $1,000 opportunities.

Justin Wheeler OK. That makes sense. Are there any industries in the nonprofit industry that aren't eligible to receive matching gifts? I'm thinking, you know, religious organizations... are there any sort of parameters that we should be thinking about here?

Adam Weinger That's a great question. So, yes, each company defines their programs a little bit differently. They kind of set their parameters on who they'll match to. What you see is nearly everyone matches to higher education. And then at least two-thirds of those companies match to pretty much all 501c3 organizations. Where the most common exclusion is, is houses of worship. So churches, synagogues, mosques, they're kind of rarely eligible and political organizations are rarely eligible. On the religious side, if it's like a food bank or a homeless shelter associated with one, they typically fall into the broader 501c3 category.

Justin Wheeler OK. Got it. So the thing that I'm thinking about my on my mind is how do we close the gap on this $4-7 billion? As you think about your own roadmap as a company and where you guys are going? What are some of the priorities that you guys have that you're really excited about over the next 12 months or so that you're able to share?

Adam Weinger Yeah, I think it comes to a couple of things. Continuing to figure out how do you like, identify which donors are matching gift eligible? So how can you pull in maybe an alternate data source? So how can you pull in maybe an employer name from, say, LinkedIn? How can you pull it from, you know, as someone's going through the donation process if you have an employee or record logged in the CRM, how can you automatically associate that?

Justin Wheeler Yeah.

Adam Weinger And then how do you drive those matches to completion at a higher rate? So how can you have better messaging out to donors? How can you make it easier for them? So some of the things that we've actually tested that we haven't fully released yet is having a direct mail component within our 360 match pro platform. So that way, if someone gave offline, maybe you if you don't have their email address, you follow up with them off-line. We're kicking around. What would a text messaging option look like pending upon how a donor gave? So continuing to tackle those two areas with kind of a focus on how do you get more and more data into our platform?

Justin Wheeler Awesome. Well, Adam, I really appreciate the time to jump on with us and to share about the importance of this market. I am really excited to continue to watch Double the Donation grow and continue to help nonprofits really accelerate their corporate match strategies. So thanks so much for joining the podcast and for being a partner with Funraise!

Adam Weinger Absolutely, Justin. Thank you!

Thanks for listening to this episode of Nonstop Nonprofit. This podcast is brought to you by your friends at Funraise. Nonprofit fundraising software, built by nonprofit people. Don't forget to get your next episode the second it hits the internets. Go to nonstopnonprofitpodcast.com and sign up for email notifications today. See you next time!