Charitable Giving Stipends for Employees

Charitable giving stipends are employer funds employees can designate to any charitable cause of their choice.

By Amy Spurling


Whether it's ongoing support for a cause you align with your company, a one-time donation or fundraising event, or an effort to help employees pursue philanthropy, charitable donations bring untold value to your organization.

For companies starting out, it can be difficult to know how to get started with giving back.

Here's what is covered in this guide:

  • What is a charitable giving stipend?
  • Ways to offer a charitable giving stipend
  • The benefits of charitable giving stipends
  • How to make charitable tax deductions

How to set up charitable giving stipends for your company


What is a charitable giving stipend?

First, a brief definition:

Charitable giving stipends are employer-funded donations employees can designate to any charitable cause of their choice.

Employees can use these stipends to donate directly to a charitable organization, or the company may opt for more structured giving programs where employees can pledge a certain amount and the company matches it up to a predetermined limit. Often, employers give stipends to incentivize volunteering (i.e., a volunteer grant).

Aside from cash, charitable giving stipends can be used for gifts of property and equipment. They may also cover travel expenses for staff members who are participating in a charity event.

They're an essential part of a wider employee giving program, which helps your company establish a culture of service and appreciation and reinforces your larger purpose.

A brief note on the tax implications of charitable giving stipends:

  • Charitable contributions from companies to nonprofits may qualify for tax deductions.
  • Donate to charitable organizations because you feel a connection, not because you want to reduce income tax liability.
  • It's best to consult with a qualified tax advisor for paperwork and tax purposes.
  • Compt is 100% tax-compliant, so you can set up a charitable giving program, get employees involved, and put it on autopilot.
charitable giving stipend

Are you ready to set up a charitable giving stipend?

Employee giving doesn't have to be complicated. Learn how charitable giving reimbursement through Compt makes donating easier for you and your employees.


Ways to offer a charitable giving stipend

Companies use charitable giving stipends in one of two ways, which makes them easy to set up.

Add on to an existing employee giving program

If you already have some sort of donation-matching or volunteer incentive but want to make it easier and more accessible to boost participation, charitable giving stipends can help. You can set up a system that automatically sends employees monthly or quarterly payments designated as donations to the charities of their choice.

Example: A software company might already have a program in place that matches donations up to $2,000. They could try offering all employees an additional $500 stipend each year to donate to whatever charity they want – with the bonus of matching employee donations up to $2,000.

Start from scratch

If you're just starting out, you can use charitable giving stipends to launch a new employee giving program. You can start small and gradually increase the amount of stipend funding over time. This way, your company benefits from increased employee engagement while building positive relationships with charities or organizations that align with its mission.

Example: A boutique marketing agency already offers its employees perk stipends, so they decided to add charitable giving stipends to their existing perk program. They created a system where employees receive $50 per quarter, which they donate to whatever cause they choose. The agency also matches employee donations up to $500, so employees feel incentivized to get involved with charity work.

Leading organizations make charitable donations part of everyday life

Across the board, one thing is for certain: companies are stepping up their game when it comes to employee giving. The combination of a global movement toward increased corporate social responsibility and innovative new technology has both inspired and enabled companies to contribute like never before.

  • Basecamp offers $1,000 to employees for charitable donations (and matches it).
  • Clif Bar gives employees a $2,000 per year donation-matching stipend.
  • Dell offers employees who volunteer for 10 hours a voucher for $150 toward the organization of their choosing.
  • Salesforce offers special grants and stipends tied to volunteering and tenure milestones.
  • Verizon offers a $750 stipend to any employee who volunteers 50 hours or more.

Learn how to set up a stipend-based employee giving program here!


The benefits of charitable giving stipends

Of course, the growing trend these days practically mandates corporate social responsibility (CSR) initiatives. 93% of employees believe companies should lead with a purpose. 76% say they should make positive impacts in their local communities. And a huge factor influencing job satisfaction? The ability to make a difference.

The vast majority (70%) of consumers agree. They want to buy from companies that prioritize social impact.

The easiest way to prove your social impact? Get employees involved in giving back. That’s where charitable giving stipends come into play.

Aside from the obvious PR boost, there are plenty of tangible benefits to offering a donation-matching program.

Strengthen your company's relationship with the community

Encouraging employees to donate to causes they're passionate about helps you build relationships and trust in local communities. It also helps you establish a company culture that puts community engagement at the forefront.

Improve employee performance and engagement

According to data from BrightFunds, companies with employee giving programs are twice as likely to be engaged at work, 5.6x likelier to trust company leadership, and have a 3.6x higher chance of recommending their company as a great workplace.

Open up your recruitment pool and attract top talent

Employees want the companies they work for to make an impact, so when your company provides an outlet for donations, you’ll be more attractive to job candidates. Plus, current employees will appreciate their opportunity to give back on behalf of the company.

They're easy to use

What good is a charitable donation program if your employees won't use it?

Research from America's Charities tells us the average participation in employer-sponsored giving programs is just 10%. Tons of employees want to give back, but they might not be interested in a volunteer-based stipend or the hassle of organizing a fundraiser.

Charitable giving stipends make it easy for employees to donate and get involved with their favorite nonprofits without the extra hassle. All you have to do is set up the program, provide employees with information on how to use it, and let them do the rest.

Employees can log in to your platform of choice (like Compt) and select a charity they want to donate to. They can also donate directly from their paycheck if they prefer.

They're easy to offer

Just because your employees can use your program doesn't mean your HR team can.

Finding and working with bona fide nonprofits is a massive headache come time for tax season. Stipend software is fully-managed and 100% tax-compliant, so your CFO, HR back office, and accounting teams don't need to worry about dealing with the technicalities.

Compt is now integrated with Givz. Now, Compt users can directly donate to any of the 1.6 million+ registered 501(c)(3) charities in the US. And HR can manage their entire program in just 30 minutes per month.


How to make charitable tax deductions

Now for the fun part. If your organization makes charitable contributions through stipends, there are tax benefits. And no. They aren't straightforward.

  • For a donation to qualify for an income tax deduction, the recipient must be a bona fide 501(c)(3) organization. That means the IRS must approve them as being tax-exempt under section 501(c)(3) of the Internal Revenue Code (verifiable with the IRS's search tool).
  • Employers must handle charitable deductions post-tax. Employees won't get the tax deduction each pay period. It will come out of their after-tax earnings.
  • The 2017 Tax Cuts and Job Act made it harder to deduct charitable contributions. The standard deduction (now $12,000 for individuals and $24,000 for couples) is much higher. Only about one-third as many people itemize and, eliminating the tax incentive for those who do.
  • A donor-advised fund is one way to get around this. A donor-advised fund lets employees donate enough money in one year to qualify for the maximum deduction. The funds can then be distributed to charities over several years, ensuring employees get the most out of their charitable donations each year.
  • For charitable gift donations, it depends on how much you donate. Donating clothing to a homeless shelter? You can deduct the fair market value. If the cash value of your stipend is $250, you'll want them to acknowledge it in writing.
  • Payroll deduction is handled post-tax. Deductions for charitable giving can only be taken on employees' tax returns, not from each paycheck.

The IRS also has rules about how much you can deduct from taxes.

You probably won't reach these limits with employee stipends alone, but you certainly might if you have other charitable initiatives like volunteering, company donations to public charities, or sponsorship of events.

  • The maximum deduction allowed for cash contributions is 50% of your adjusted gross income (AGI).
  • Contributions of non-cash assets are limited to 30% of AGI.
  • Certain private foundations, cemetery organizations, and veterans' groups also limit your deduction to 30%.
  • Companies can carry unused deductions forward up to five years.
  • All contributions must be made before December 31st of the tax year.

How to set up charitable giving stipends for your company

Charitable giving stipends are one of the best ways to offer meaningful employee perks to your team. Not only do they help you show the world that your company is dedicated to making a difference, but they can also have a huge impact on morale and engagement in the workplace.

Plus, they're lots easier to set up.

1. Define your budget.

Figure out how much your company can afford to give each month. It doesn't have to be a huge chunk of change. Start with stipends of $50 to $100 per employee and work your way up.

2. Decide on your spending timeframe.

When setting up your charitable contribution program, you have a few options when it comes to timeframes:

  • Monthly: distributing a small amount to each employee at the same time every month for them to donate
  • Annually: a lump sum of money is given to employees once a year, and they can choose how much of it they want to give back
  • Seasonally: giving employees a certain amount at different times of the year (e.g., at the end of the summer or before a holiday)
  • Quarterly: the same as seasonally, but with payments every three months

It all depends on how you want to incentivize employee participation. For example, some companies host donation drives around the holidays or celebrate the end of a quarter with a special incentive (that includes donations).

3. Set your stipend criteria.

Use Compt to manage and track your charitable donation program. Set parameters for your stipend, including dollar amount, time of disbursement, and frequency. Then, employees can choose from more than 1.6 million 501(c)(3) nonprofits to donate to.

Not a customer? Schedule a demo.

4. Invite employees to join.

Once your program is ready to go, you'll want to let everyone know about it. Send an email and create a Slack channel that explains how the donation process works and what charities they can donate to.

Be sure to include as much detail as possible so employees understand all of their options. And don't forget to shout out employee donations in the messaging channel!

Just getting started with stipends? Check out our guide to setting up perk stipends for the first time.


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Amy Spurling

Founder and CEO

Amy founded Compt, employee stipend software that enables companies to offer truly personalized employee perks while being fully tax-compliant and inclusive for global teams. Amy's experience as a former three-time CFO and two-time COO managing Finance and HR drives her belief that companies and employees can achieve much more together when employees are fully supported. Her favorite Compt stipend category is Charitable Giving.


Are you ready to set up a charitable giving stipend?

Employee giving doesn't have to be complicated. Learn how charitable giving reimbursement through Compt makes donating easier for you and your employees.

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