One percent of anything doesn’t sound like much, does it? For example, in the CSR world, if I wrote a blog article every week about how important a 1% increase in employee participation is, how quickly would you tune me out? After all, is a discussion about employee participation worth the effort if all we are talking about is 1%?
For perspective, let’s look at the impact of 1% in some other contexts. Would you be excited about a 1% pay raise? I didn’t think so. But what if I told you that we could lift 1% of the world’s population out of poverty – would that get your attention? The World Bank reports that 767 million people – 10.7% of the global population – live below the international poverty level of just $1.90 per day. If we could help lift 1% of the world’s population out of poverty, that would impact more than 70 million people! Hmmm … sometimes 1% is a lot.
The example of positively impacting just 1% of the world’s population also sums up why so many of us are so attracted to the missions of our charities and NGOs. And why so many of us work in this niche industry called Corporate Social Responsibility. We see opportunities to make the world a better place … even one percentage point at a time.
Back to Corporate Social Responsibility. What is the impact of “1%” when it comes to employee participation in Workplace Giving programs? Is that a lot or a little?
Let’s find out.
Defining Workplace Giving and Employee Participation
To make sure we are on the same page, let me share a quick recap of Workplace Giving. Today’s companies are developing complex CSR strategies, with initiatives that include sustainability, employee engagement, compliance and philanthropy. Workplace Giving captures several types of programs in that latter category. These include employee payroll deduction giving (such as a fall United Way campaign), cause campaigns, disaster relief, Dollars for Doers, gift matching, team grants, and the ever-more-popular peer-to-peer giving.
The commonality in all of these programs is that a gift transaction is created as a result of employee activity. And an increase in employee participation means more giving. (For further descriptions of a wide range of CSR and Workplace Giving programs, please visit CSR Matters’ resource Glossary.)
How much money is given through the workplace?
This is a great question and a really difficult number to pin down. Nevertheless, it is important to dig in and do our best to figure this out. (Statisticians beware, this isn’t perfect.)
First, because it is getting so much press, let’s look at the recently released Giving Institute’s Giving USA 2018 report. Total giving for 2017 increased 5.2% to $410 billion. When examining giving by source, we see that contributions from Corporations represented 5% of total giving, or $20.5 billion. And the better news is that giving from Corporations increased 8% over 2016.
Lots of great giving data. The challenge with Giving USA’s corporate giving numbers, however, is that getting a true Workplace Giving fundraising number is much harder to come by. This is because Workplace Giving programs represent a mix of individual donations, corporate grants and matching. Consequently, an accurate CSR program giving total would be split up among multiple sources in the pie chart above.
So we keep looking.
Two other estimates of total giving through the workplace come from America’s Charities and Charity Navigator, at $4 billion and $4.8 billion respectively, although we don’t find much in the way of analysis backing these numbers up. And finally, the last national campaign total published by United Way Worldwide reported total Workplace Giving of $4.26 billion in 2013. If we extrapolate that number at 3% growth annually, we arrive at $4.8 billion for 2017.
So, knowing that the CSR industry could use a more thorough and independent tracking across all Workplace Giving programs, at CSR Matters we rely upon that $4.8 billion as a reasonable estimate for the amount of dollars raised annually through Workplace Giving programs.
Is that the best we can do?
Hmmm … $4.8 billion raised. That’s from employee donations, matches on gifts, and grants related to volunteer activity. Is that a lot? Seems like it is, right? Well … maybe not.
In the U.S. alone, our total full-time private sector workforce is about 126 million, plus we have another 22 million government employees. If we use 148 million as our target for “full Workplace Giving participation”, then our Workplace Giving programs are raising $32 per FTE. That doesn’t seem like so much anymore. But we know that the majority of our workforce does not give through Workplace Giving. In fact, we probably do not even reach half of our workforce to give them the opportunity to give through work. As an industry, we have more work to do, don’t we?
But what if we – our CSR industry – reached every employee? Then what?
To our original question, let’s ask the following: does raising Workplace Giving dollars from an additional 1% of our fellow employees make a difference?
It turns out that the answer to that question is “yes”. So let’s see just how much of a difference 1% can make.
Reaching the full workforce
Thanks to data and research published by CSR vendors such as YourCause and America’s Charities, we have a pretty good sense of Workplace Giving activity at Mid-sized (500-9,999 employees) and Enterprise level (10,000+ employees) companies. Participation rates average 19% and 14%, respectively. And average annual giving is $702. For the Public Sector, participation is closer to 11%, with an average gift of around $410. We also know that companies often match employee donations, with 28% of Mid-market companies and 65%+ of Enterprise companies offer matches that average out to about $1:$1.
The Mid-market, Enterprise and Public Sector markets represent our historically most active giving workplaces. But what if we could reach all companies – what if we had the right kinds of software, coupled with the right services and incentives to make giving through the workplace a preferred method of giving? Then we could reach the full workforce.
And extrapolating the metrics, we also want to reach the 67 million workers in Small Business (1 – 499 employees). Now our Workplace Giving potential looks like this:
- $4.8 billion given today
- Another $10.7 billion generated by reaching all 148 million employees, assuming the same participation rates
- Total Workplace Giving potential = $15.5 billion
Wow. By just reaching all of our fellow workers, we can triple the giving. Triple!
Why we are missing so many workers
It looks like we may be leaving a lot of potential giving “on the table”. Right? Well … we are. “Why is that?” you ask.
The answer is simple. Per 2016 U.S. Census data, there are 32 million businesses in the US alone, employing those private sector workers. The CSR industry covers the F500, even the Global1000, really well. In fact, CSR vendors spend a lot of time calling on the same 500 or 1000 companies. The challenge is to reach the larger markets … to blanket the Mid-market and Small Business companies.
The good news is that we are getting better at all of this CSR “stuff”. Better software, more scalable services, and more efficient funds distribution makes it much easier to reach the entire workforce. Better still, we have a new and powerful voice wading into the debate over the importance of CSR to Corporate America: Wall Street. Larry Fink, chairman and CEO of BlackRock, the world’s largest asset management firm, issued a provocative challenge in his 2018 Letter to CEOs. And it is a game changer. Blackrock intends to hold CEOs accountable for the long term strategic health of their companies. And in so doing, Fink offered this guidance among his insights:
Companies must ask themselves: What role do we play in the community? How are we managing our impact on the environment? Are we working to create a diverse workforce? Are we adapting to technological change? Are we providing the retraining and opportunities that our employees and our business will need to adjust to an increasingly automated world?
In other words, every company must have a CSR strategy.
And that brings me to “the 1% question”.
Calculating the 1%
We need to start thinking and talking in terms of the potential for workplace giving … not just the $4.8 billion status quo. If we challenge ourselves to go after the largest market coverage possible, then opportunities look quite different.
And 1% looks like a game changer … better put, a world changer.
For every 1% of the workforce that we engage in workplace giving, that’s another 1.48 million donors. And when you factor in both the employee giving (blended average annual giving of nearly $500) and the current employer match rates, 1% of the workforce will generate another $1 billion for our neighbors and our communities. Think about that for a minute. That deserves repeating.
Every participating 1% of our workforce can generate $1 billion for charity!
If you are following the math, then you might be asking this one last question: what is the total potential giving for Workplace Giving? Now that is an inspiring question, isn’t it?
Assuming that everyone participates, that current average giving levels are sustained, and that every company matches employee gifts, what is our total potential for Workplace Giving?
And the answer is: $146 billion.
Are you inspired?
Think globally, act locally
We have all heard this phrase before:
Think globally, act locally.
Great advice. I am one person. I cannot make the entire workforce give to charity, and I cannot force every company to match those gifts. As a consultant, I can’t even reach every company or every CSR professional to share this message. But I can do my part. And so can we all. We can do the little things, step by step, one percent at a time. And lots of “1% efforts” can add up. It reminds me of the Mother Teresa quote about doing the small things.
If you are a CSR professional, challenge yourself, your team and your company to increase employee participation in your programs. Engage employee feedback. Evolve stale programs. Role out a new program. Reach remote employees.
If you are a company exec or a CFO, increase your CSR budget to encourage greater employee participation in your CSR programs. We have seen the positive impact of the 2018 tax cuts rippling through companies across our economy. There is more cash flow to invest in your business. Invest some of it in CSR. Start matching employee donations. Underwrite new CSR programs. Develop strategic partnerships with key charities that perhaps align with your corporate or employee engagement goals.
If you are a CSR software vendor, find more customers. Stop fighting over the same 500. Add more employees to your donor base, 1% at a time. Reach deeper into the Mid-market. Develop products that will reach Small Business. Make it as easy as possible for employees to give, for CSR professionals to increase employee participation. You know the metrics better than anybody – donors give more through Workplace Giving than almost any other channel except a capital campaign or a bequest. Why? Because of the impact of incentives such as gift matching and payroll deduction.
If you are a charity, work with your corporate partners to help them understand the impact of every 1%. Help companies with Signature Programs, for example, to better steward donors participating in those programs. CSR professionals are not necessarily fundraisers, but you are. So offer to help.
And if you are a CSR consultant or in the media following this industry, take up the call. We can raise more money – we can change the world – 1% at a time!
In fact, that last point is a reminder to all of us – we should everything we can to increase employee participation, because all of those “1% efforts” really do add up!
Bringing it home
The lesson for me in working through all the numbers, thinking about employee participation potential is this: We CAN do better. And we should. Corporate Social Responsibility matters!
CSR matters because of the people we help, the lives we change, the communities we enrich, the environments we sustain.
Now, as I write this, I recognize that most of us are not the people on the front lines – those heroes working every day in our 1.6 million nonprofits and charitable organizations to change the world. But if they are soldiers on the front lines, then we are the supply lines. And if we can move the participation needle 1% – if we can get another 1% of the workforce to participate in Workplace Giving – then we can move a lot more supplies to the front lines. We can do our part to change the world.
Remember: giving through the workplace has built-in incentives that increase employee participation. With company match programs, more people give, and they give more. Through payroll deduction, donors give more. In a company culture that values and promotes employee engagement, teams of like-minded, hard-working, caring co-workers inspire each other to do and give more. And when they do, everyone benefits.
If you’d like to join the call – join the “Changing the World 1% at a Time” team – give us a shout. Let’s talk more. CSR Matters is committed to helping all of us help others. Together, we can change the world … 1% at at a time.