022: How Workplace Giving Works and Why it Matters – America’s Charities

Service icons_podcast Workplace giving enables companies to setup reoccurring donation systems for their employees and support a culture of corporate giving and purpose. Steve Delfin, the CEO of America’s Charities discusses the importance of unrestricted funds for nonprofits and how a change to an all online system will harm giving in the federal campaigns.

Transcription

Episode 22

Speaker 1: This is Using the Whole Whale, a podcast that brings you stories of data and technology in the nonprofit world. This is George Weiner, your host and the Chief Whaler of wholewhale.com. Thank you for joining us.

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Speaker 1: Most of us are familiar with the 401k’s that get setup through our workplaces but what about giving? How familiar do you feel most people are with workplace giving and the idea that we should be setting aside money each month to go toward causes we care about? Welcome to Episode 21 where we ‘re talking with Steve Delfin, the CEO of America’s Charities. And America’s Charities does exactly that. They help companies set these really fantastic plans up where employees can choose the charity that they want a portion of their money going to every month. And they also work with the federal government employees through the combined federal campaign allowing millions of dollars to go to not-for-profits in an unrestricted way that allows them to do their amazing work. Today we‘re gonna hear a bit about how technology is impacting America’s Charities and the field at large.

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Speaker 1: And I ‘m here with Steve Delfin, the CEO of America’s Charities. Steve how’re you doing?

Speaker 2: I’m doing well George. How’re you doing today?

Speaker 1: I ‘m doing OK. How, how are things in Virginia?

Speaker 2: Things are great in Virginia. We’re trying to raise more money for some great charities that we represent trying to get people to think a little differently about how they engage with philanthropy, so all is good and, you know, we’re doing great things trying to change the world.

Speaker 1: Brilliant. Let get a little more specific, specifics on What is America’s Charities? It ‘s a broad name. What the heck do you guys do?

Speaker 2: Yes. And you know it ‘s funny. It used to be very easy to describe what we do. We used to be primarily a membership organization representing a group of really top quality charities and helping them get access into various forms of employee workplace giving programs, both in the federal government as well as in the private sector. But in the last five years, in addition to doing that, we’re finding that we have to be more to all those parties. We have to help the companies better understand how to leverage their resources to help those charities. We have to help charities better understand the needs of employers and companies as it relates to philanthropy and CSR. And then as donors have more options in ways to give and engage, we have to take that into consideration as we look at, how does workplace giving relate to the more contemporary, and the current donor who has more ways to engage with nonprofits.

Speaker 1: That’s great. So, you’re getting solid nonprofits in the door of workplace giving. Can you give me an idea top line like how much are you helping to raise in unrestricted funds every year for your, you know, aggregate charities?

Speaker 2: Sure. So, the total amount that we raise each year is in the neighborhood of $35 to 40 million dollars. That is a relatively small amount of the total that’s given to workplace giving which is estimated to be somewhere in the neighborhood of four billion dollars. But we represent a group of national charities that typically don’t benefit from workplace giving at the local market level. So, we actually have a kind of a unique niche in that regard. And as companies become more national, more global in nature, they are looking for ways to engage with nonprofit organizations that share that, not only a local perspective but also the national and even global perspective.

Speaker 1: That ‘s a lot of money. I love the unrestricted, unrestricted dollars for nonprofit is fantastic. I ‘m a little confused, though. Like what is workplace giving? Is this like a jar at the door, when someone shows up at work and they just, you know, drop in a dollar every day?

Speaker 2: No. It actually is, we’re talking about repetitive giving through workplace giving that’s tied to payroll. So, the average employee who participates in what ‘s called the workplace giving program will give around $300 to $500 annually by having a little bit taken out of their paycheck each week. Those are pre-tax dollars so they have that advantage as well. And we know from research and surveys that have gone on for a number of decades that this is not only an efficient way to give but employees like to give that way because it, it allows them to make a decision and kind of set it and leave it. And it generates, on per capita, large amounts of unrestricted dollars for those charities and, you know, in our case we’re looking to, we‘re looking to getting more people engaged in workplace giving but also try to engage people in giving wherever they feel comfortable doing it. It ‘s more the act of repetitive giving, annualized giving, in a way that ‘s attached to your payroll, might be through a portable giving account much like you have your IRA attached to whatever form your income is. And then the education and the information attached to how that money is used. Which I think is a big area where technology begins to come into play.

Speaker 1: Yes. So, say a little bit more of that, you know, how has technology really begun to play a role in this marketplace of, you know, making it easier to give?

Speaker 2: Well, you know, if you look back, this is 2014. So, if you just look back to the year 2000. So, you know, 14 years ago. Online fundraising was in its infancy. And there were three or four seminal points that took people from giving through direct mail, and through telemarketing, and through direct gifts to using technology. One was obviously 911 and the creation of the use of online giving for that. The second was Katrina where you saw online giving really gain its steam. And, still, and technology has driven all that and continues to drive it. So, even in workplace giving where technology is tied to payroll and it’s tied to the employer’s technology platform, you have a variety of platforms that can, in fact, help the employers better engage employees through more robust technology that the employer purchases to help them in their employee engagement, employee philanthropy program. So, technology is a great enabler but in philanthropy you can ‘t lose the trust. You still have to have people understand how their dollars are used, have opportunities to volunteer with charities, or provide pro bono services. And so, our job is to try to operate in this new and complex, and sophisticated environment to help people both leverage technology for giving but also use technology as a way to inform people about what they‘re given to and the outcomes produced.

Speaker 1: Got you. So, just to the, I guess benchmark, or frame of reference of our 35 million, you know, this year, what percent is coming through digital means versus still like somebody writing a good old-fashion check?

Speaker 2: Sure. You know I believe, although I have no quantitative information to say this, and you probably identified an area that we could do a better job in. I believe that probably 60 to 75 percent of the money we raise is done using a digital technology platform.

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Speaker 1: I did some follow-up on what the true numbers were because I really did care about this cause it ‘s significant. So, we ‘re talking about that again, 200 million give or take coming from the federal government, and what happen is about 70 percent of that last year was through paper, paper submissions, checks written to charities, that America’s Charities then processed. Thirty percent came from online. Now, you ‘re saying, well, what if we just suddenly switched to an all online system? Wouldn’t that create efficiency? Well, Florida State did exactly this and last year, they experienced a 40 percent drop in overall campaign giving which is crazy. Because they stopped allowing any paper submissions, any checks from being processed. I mean, it’s hard to believe but it seems as though just the pure switch to online causes and can cause significant drops in overall giving which could prove pretty devastating to this federal national campaign.

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Speaker 2: Now, you have to understand in workplace giving that there are many employees and particularly if you look at the public sector campaigns being government, state and local government campaigns and efforts where you have employees who do not have access to technology or you have public sector organizations and departments that don’t have the budget for technology. And we’ve seen that come into play many times at the federal government. So, you do have to be flexible to be able to provide the ability to give through payroll deductions though means that might be still paper-based. I know that’s unfortunate but you have to meet people where they are and where they can give. You have postal workers who don’t have access to computers. You have military personnel who don’t have access to the technology. So, our job is to bridge the gaps while also being very cognizant of the fact that those gaps will be bridged around technology in both those instances in the future, and we have to be ready to make sure that we can still leverage that environment.

Speaker 1: Yeah. And I think that’s a good note. You‘re really trying to herd some cats so to speak.

Speaker 2: [Laugh]

Speaker 1: You have to make sure by land, sea by air. By, you know, whatever it may be coming in that you can aggregate and then sort of disburse these funds accurately for all of your member charities.

Speaker 2: So, I think there’s two aspects to that. One is the aggregation aspect in organizations like ours. And there’s a handful like America’s Charities. There’s a group called Global Impact. There ‘s Earth Share. There ‘s Community Health Charities. We all do essentially the same thing for slightly different groups of charities. And the value of the work we provide for our charities, is we aggregate the money, we aggregate the data about the donors, and we provide that in an organized, timely scheduled fashion for the charities so they don’t have to hire people to do that work for them. And, you know, in essence, that’s kind of, that’s not dogs and cats who need to be adopted. It’s not children who have a disease. But when you look at what charities do and are being asked to do, the complexity of reducing the complexity of the complication of the backrooms and the companies of the charities infrastructure, it’s a huge part of what we do and is what the value we bring in so that they can, in fact, deliver more in the way of services to people in communities. So, that ‘s a critical role that groups like ours play, and from a branding perspective, it’s a very difficult sell because it doesn’t have an emotional appeal to it. So, that’s one of our biggest challenges.

Speaker 1: Yeah, I don’t think accounting is a very sexy sell.

Speaker 2: We ‘re America ‘s sexiest aggregators. How about that?

Speaker 1: Consider the craft.

Speaker 2: There you go.

Speaker 1: Maybe there ‘s a calendar option for you guys.

Speaker 2: [laugh] OK.

Speaker 1: Oh, boy. We devolved. You mentioned postal workers. You mentioned some government employees. And so, you have a private sector and you have the, you know, the government sector. Can you tell me a little bit about that world and the combined federal campaign?

Speaker 2: Sure. So, in, in the world of workplace giving and employee engagement, which are increasingly becoming the same thing because companies, all employers realize that an engaged workforce is a workforce that ‘s more productive. And a major way to do that is by allowing employees to connect to community, connect to volunteerism, provide their skills and resources for the better good of the community. So, in the public sector, which is the federal government, state and local governments, those workplace giving programs are highly regulated. So, in other words, there ‘s rules of who gets in and under what conditions, and there‘s paperwork that has to be done. And there’s compliance issues, there ‘s vetting, there’s all that kinds of stuff. So, it’s very much a regulated and compliance environment. So, if you meet the rules and you do the things right, you get in the campaign, and the campaign is run under certain rules, and money gets distributed, and then money gets raised. The problem is, is that over many years, particularly the federal government ‘s has being doing that, they have not kept up with the technology advances. And they have not put a lot of infrastructure into their workaround this unlike companies who’ve actually put more and more infrastructure into it. The federal government right now is in the midst of making a switch. They’re trying to put the entire combined federal campaign which is a 200 million dollar workplace giving program. It’s the largest workplace giving program in the world. And they’re trying to take it all online in one fell swoop. And in doing so are inadvertently creating disincentives for people to give who aren’t gonna have access to the technology who currently can give. And so, that’s a, that’s a case where technology is an enabler and it will make things better, but there has to be a point in which you allow some of that transition to occur. And then also acknowledging that some people, because of the nature of their jobs, simply don’t have access to the technology you’re putting forth, and you have to accommodate them. Otherwise, they are kind disintermediated from the process that they’ve been involved in in the past and that’s not a good thing. And that problem doesn ‘t exist in the private sector side, except that some companies are putting all of their marbles in technology to deliver an emotional appeal or deliver information about the charity and in fact are putting too much reliance in technology and not integrating it into their broader employee engagement, employee communication strategies, which is the place where America ‘s Charities comes in. And we help them develop programs and strategies to be able to do that.

Speaker 1: Wow! Lot ‘s to unpack there but just to start with, you know, the combined federal campaign. Steve, are you suggesting the government is not good at large scale technology rollouts?

Speaker 2: [Laugh] I ‘m more than suggesting that.

Speaker 1: [Laugh]

Speaker 2: I’m saying that is a fact. And as we saw with the health.gov, and as we’ve seen with many federal rollouts of technology, their ability to enter the marketplace at a point where people have already been at for five years is difficult. So, and you’re hitting that exact point here. What the federal government is trying to do and the assumption they’re running on, is that people will have access to technology. They will use the technology for giving in ways that they’ve not before, but they’re not building a technology platform that allows for that engagement to happen, nor to provide the information people need to connect to giving to the outcomes. They need time to do that. They’re gonna need more time in the private sector because the federal government moves more slowly. The problem is they’re jumping in with both feet and they’re not actually doing any testing, and they’re making assumptions that you would never make in the private sector about how this would all play out. And that’‘s where we, we think that they need to do a better job and we need to move a little more slowly, actually.

Speaker 1: But, Steve, just to play devil‘s advocate here, aren‘t we gonna get like significant increases in efficiencies on this campaign once it‘s digitized?

Speaker 2: Yes, but, and I will say, yes but. So, where, where you have people who have access to technology, there will be efficiencies. The problem is that if efficiency is the only barometer then for your campaign but you‘re not worried about how much money you raise in total, then your net gain on that for charity is negative. So, if you have more people using technology but the ones who can‘t use technology can‘t give it all. So, your net gain in fundraising is a minus something. And we saw, we’ve seen numbers that would suggest that ‘s the case. I will, I will give you an example that even in the private sector where we‘ve seen that happen. I won‘t name the name of this very large technology company, ironically, who took their workplace giving program that used to raise several millions of dollars, and said we‘re gonna put it online, and put it as part of our employee ‘s system platform. And if you want to give, you go that site and you give money. They went from raising three or four million dollars down to raising less than 100 thousand dollars. So, you know, you have to, you still have to give the same people who gave before, the opportunity to continue giving if you‘re changing to an all technology platform and give time for that to occur. So, that people can actually make the switch and not feel like they‘re being left out of the process.

Speaker 1: Yikes. Yeah, I don‘t know if any of the, if that partner rhymes with the either shmugal or schmamizon, but, well, I assume it‘s at that level, right?

Speaker 2: It‘s at that level, but I will not, I will not say for fear of being sent something in the mail. [laugh]

Speaker 1: Fair enough. Nothing officially said.

Speaker 2: There you go.

Speaker 1: But can you give me an idea of any sort of projection of what a sort of, I don’t know, dollar amount from the drop that this might have on the combined federal campaign? You already mentioned it’s the largest in the country.

Speaker 2: Yeah.

Speaker 1: What is the down-side? Like, how much is there potentially at stake?

Speaker 2: So, the Office of Personnel Management which is the federal agency that is in charge of the combined federal campaign. And they‘re the federal agencies that is basically the HR arm in the federal government. They think that, through the changes that they‘re making, they will see efficiency gains in the nature of 15 to 25 million dollars in terms of efficiency gains. We think that, that‘s probably, it ‘s probably a high-end, but maybe 15 million. The problem is by eliminating the ability to give by paper to the federal, to the military, and to postal workers, and others who will not have access in the near future to the technology, you‘re gonna lose 50 million. So, the net gain on that is a minus somewhere between 30 and 40 million dollars or whatever the math is. It ‘s a big, big number. And when you sit, when you think in terms of unrestricted dollars being the types of dollars that leverage other funds. So, every unrestricted dollar that a charity raises, generally generates another two to five times that and other resources, either in-kind or matching gifts. So, when you take 50 million dollars out of the marketplace, you‘re really taking somewhere between 150 and 300 million dollars out of the marketplace. And that ‘s horrible public. If you want to put it in government perspective, that ‘s bad public policy.

Speaker 1: Yeah. I guess if the only metric we care about is efficiency, it ‘s good news. But to tell the whole story, it‘s really cutting off our nose to spite or unrestricted giving.

Speaker 2: Yeah. I mean, if your metrics is efficiency, and you go from it costing 10 cents on the dollar to seven cents on the dollar, and you do that but you raise 50 million less dollars, is that really success?

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Speaker 1: So, just to change gears here, like what, is there anything people can do at this point? Or, you know, are the gears already in motion? How do people take a positive step with regard to workplace giving?

Speaker 2: Sure. Well, as it relates to the federal government, the gears are in motion but there‘s always steps that can be taken. I mean, the Office of Personnel Management responds to, people, things they hear through their Members of Congress who are part of the Oversight Committee. And I won ‘t, you know, go into all those folks but there’s, Congressional Oversight Committee that, that are concerned about monies that give back to charities in their marketplace because, frankly, 30 percent of all federal monies that go to nonprofits are gonna be cut out of the budget the next two years. And so, you really need these funds going directly to charities from individuals who want to give. So, on the federal government side, it ‘s making your elected representative aware that these changes are going on and that the real need is for OPM to be thoughtful, to engage people, and to slow down. So that the changes they make don‘t do more harm than good. On the private sector side, the field is wide open. What‘s happened is, workplace giving has moved from being about just raising funds to how does workplace giving fall into a broader employee engagement and corporate social responsibility program. Charities who are involved with companies can really take an active role in giving their case to companies to be included in workplace giving programs, and take advantage of volunteer opportunities that they afford. As it relates to growing actual workplace giving we, our research that we‘ve done in the last three years, shows that companies are still expanding workplace giving programs. But they‘re doing it using new technology platforms and what they need are charities to feed them information and tell their stories so that they can leverage these platforms with better content that they get from charities. And part of what we’re doing at America‘s Charities is helping our members understand how to do that, in fact, providing that content to employers to use in the future of our charities.

Speaker 1: Yeah, it sounds fantastic. You know if you ‘re, it seems like a large company, you can come to someone like America‘s Charities and your plug and play. Let it help your people give more money which, you know, leads to better engagement, more workplace satisfaction, and that sort of storytelling.

Speaker 2: That‘s absolutely correct. And I think the thing that companies are struggling with and everybody is, is as the economy tries to recover, most companies are still holding back on expenditures for anything that‘s kind of what they would call, you know, kind of soft or corporate programs and services. So what we have to do in the nonprofit sector, is help those people responsible for corporate social responsibility, for employee engagement, employee philanthropy to justify the expenses that the companies are making in that area by showing them what the impacts are in the community. How those funds and those efforts and the individual donor dollars have actually helped make a life, what makes a difference in the lives of people in the community. And in many cases, help the employee themselves. So, what we try to do at America‘s Charities is, we‘re trying to help companies develop a strategy for how to best leverage the technology, to best understand which charities are providing the most impact in the community, helping companies select those charities for special focus, and then providing them with the content around which they can drive their technology platforms whether they’ve created them internally, or bought them, or get them externally from a number of the providers in the marketplace. And finally, we have our own technology platform which is a basic platform. And works well for mid-size companies. But more importantly, we know the marketplace for all the other guys who are out there who might be applicable for larger employers.

Speaker 1: Awesome. So, as we move to sort of wrap up here, I‘ve got an important question, I guess, just for you, which is, you know, why do you do this? Why do you believe in America‘s Charities and this issue?

Speaker 2: Well, you know, I‘ve, I ‘ve worked, I‘m kind of, there ‘s a new term out there called tri-sector athlete. And while I‘ve been around for a number of years, I‘ve been doing this work for 30 years. I kind of view myself in that role. I started my career working for the federal government. I then went to work in the private voluntary sector for a number of large national charities. I then transitioned to where I was the head of CSR for Booz Allen. And then I‘ve worked as a consultant. So, I‘ve, I ‘ve approached this from, from varied points of view but at the end of the day, it’s what now being called tri-sector athlete. So, I know how to connect the pieces. And what I see with employee workplace giving and what ‘s happening, I see great opportunity here. And for America‘s Charites, what it means for us, is we‘re having to pivot a bit from our traditional role, simply funds collector and distributor to an organization that helps our key stakeholders which are employers, employee donors, and the charities to understand how to be more effective collectively. And that‘s a, when you look at what ‘s happening in the sector now, it‘s all about how do we create more impact with scarcity of resources. How do I identify who ‘s doing the best job in solving a problem? And then how do we attract the resources to those organizations that are doing that? And we see that as being a pivotal part of what we do. And technology is obviously key in all aspects of that, whether it‘s from creating awareness, to creating the recognition of what‘s happened to showing what the impact is, to actually raising the dollars.

Speaker 1: That‘s great. So, how do people find you? How do people help you, Steve?

Speaker 2: Well, let‘s see. So, there‘s a couple ways people could help us. Any employer, large or small who ‘s looking to either start or revitalize their workplace giving program should come to our website at www.charties.org, take a look at the services we provide and feel free to reach out to us on our website through our email there. Or they could contact me directly, Steve Delfin, [email protected] D-E-L-F-I-N. Individuals who are looking to volunteer for nonprofit organizations that are part of our membership, they can reach out to us. They can actually reach out to a number of our members organizations that are on our website. And we‘re looking for people to help them with pro-bono assistance in kind support. But our niche is how do we grow more workplace giving programs. So we ‘re really focused on employers right now. So, particularly employers who are interested in rethinking, redoing or considering how they do employee engagement workplace giving in their broader philanthropy efforts should reach out to us through our website directly.

Speaker 1: Steve, thank you so much for taking the time. As soon as Whole Whale gets to that, you know, tipping point past ten employees, we‘ll be giving you a call.

Speaker 2: All righty, George. I will, actually, I will get you involved before then as you already are.

Speaker 1: Alright.

Speaker 2: OK, then.

Speaker 1: Take care.

Speaker 2: Bye, bye.

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Speaker 1: It‘s fantastic being able to talk to Steve about this topic. He‘s a leader in the space and he ‘s extremely knowledgeable. Full disclosure here. I am a board member of America‘s Charities. And I ‘m a board member because of one simple fact. I deeply believe in giving not-for-profits unrestricted money. Meaning, it ‘s not saying go, you know, don ‘t spend this on overhead. Don‘t spend this on this, putting handcuffs on the money. I believe not-for-profits are the smartest and best people to decide where money needs to go. What‘s more, I think it can potentially really lead into what I deeply believe which is the improvement of data and technology systems in nonprofits. And it ‘s just not that sexy to say, hey, here’s some money to go invest in your technology. People want on the ground impact. They want the stories that they can, sort of, put on the Christmas card, on their fridge. But I don‘t believe that‘s what‘s moving the needle forward. America‘s Charities and other workplace giving type of organizations like these are getting that type of money in the hands of great not-for-profits. What the combined federal campaign is suggesting doing, is switching completely over to online. Ignoring people that are only writing checks using a paper system. By switching over to online you get efficiency but the wrong metric followed blindly can lead to terrible results. I am very much at heart a believer in technology you hear the way I talk about it. Technology is supposed to be an amplifier. It‘s supposed to allow and increase the ways we interact with organizations. The way we execute on what we‘re supposed to be doing in the field. It shouldn‘t be a limiting factor. It shouldn‘t be dated. It shouldn‘t be blocking people and that is precisely what a simply online move by a combined federal campaign will do. And the data are there. It ‘s going to chop about 40 percent or 80 million dollars off of this total amount of unrestricted giving and that bugs me.
So, ultimately, I hope that America ‘s Charities is able to fight this, but more importantly, grow the size of the pie outside the world of the Fed and look to the private sector to make it a standard. As standard as 401k‘s are asked about when you walk in the doors of the organizations you hope to work for. And as standard as that 401k is, I really hope it is. And what is your policy for giving on an annual basis, on a monthly basis? How do you handle workplace giving? Because it matters more and more and that‘s how I truly believe we can get more unrestricted dollars in the hands of more great nonprofits.
Thanks for joining us today as always. If you get a chance, you can always go to the website wholewhale.com\podcast for all the helpful bits on this story. Thanks.