Charitable Giving at Work: Why Pressuring Workers Backfires

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“I am a midlevel manager in a credit and collections firm located in the South that has a history of providing college scholarships and grants that goes back many years. In fact, several of our employees received these awards, which helped them to attend college. We encourage our employees to donate to the company’s education foundation or to the local university that we support and which has been responsible for granting scholarships to many of the people who work here. We will match whatever the employee donates. But recently, we have noticed a great deal of resistance to charitable giving by recent college graduates who, I must tell you, are much better paid than former groups of entering employees and who also received grants from this company.

Charitable Giving Strategies for Not-as-Wealthy Donors

“Additionally, our employee base is much more diverse than ever before, with new people from many countries. I let it be known that everyone expects that if you have received benefits from the company, then you should be generous, think of others and pay it forward, but what I am saying isn’t working. Have you got any suggestions? Thanks, ‘Erin.’”

What discourages employees from charitable giving

I ran Erin’s question by Jane Couperus, director of Planned Giving in the Division of Advancement at California State University, Bakersfield. She provided a list of the things not to do, things that would discourage a sense of generosity by an employee or even family members. Do not:

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Make charitable giving mandatory. Forcing an employee to donate means that they are not giving from their heart, but because of the pressure you as the employer are putting on them.

They will not experience the joy of giving — that warm feeling of having done something that will benefit others. Also, the employer might not know that the employee could be giving to other charitable causes — their church, for example.

Limit to whom the employee may donate for matching funds. An unintended result of restricting matching contributions to one charity or organization is that it can greatly reduce the employee’s desire to give to other charities.

Erin’s company would be more successful by developing a list of choices where employees could donate in addition to their own, company-sponsored foundation.

How to Fail as a Leader

Restrict employee generosity to merely dollars, instead of encouraging them to volunteer their time — a few hours — at a soup kitchen or elementary school, for example. If an employer fails to encourage alternatives to donating money, that could spill over into other areas where employees might otherwise be charitable. Charity is not only governed by a checkbook, but also by giving time, and giving one’s time to charity has a way of encouraging people to give more of their financial resources.

Assume that everyone shares the same views about charity. Employers should check out Charities Aid Foundation’s World Giving Index, which examines the nature of giving around the world. It looks at aspects of giving behavior and ranks countries by asking participants if they’ve done any of the following in the past month:

Helped a stranger, or someone they didn’t know who needed help?
Donated money to a charity?
Volunteered their time to an organization?

CAF’s findings may correlate with what Erin is discovering, that several in her diverse group of employees could very well be from countries where personal giving — even if they have received a college scholarship — isn’t something they normally do or where residents in general aren’t known for being generous to charities.

Also, perhaps an employee comes from a country with very high taxes, and therefore, the employee feels they have already given enough.

Erin needs to explore these possible explanations for why some newer employees do not wish to donate.

Fail to respect employees’ giving history by revealing who gave how much and to whom. This would be very embarrassing to an employee or family member who did not donate or who gave a very small amount to the organization’s pet project. You can’t shame someone into donating.

Refuse to let employees recommend which charities receive donations. The greater the participation of employees in the selection process for company donations, the more likely employees will be inspired to give to charity themselves.

Imply that the more they give, the greater their chances of advancing in the company, especially when it comes to political donations. This would be incredibly unethical and would paint any manager who did this as someone you cannot trust. Generosity must come from the heart, not because of threats that “you’ll never advance unless we see you supporting this cause.” Political and charitable donations should never be treated the same.

In Philanthropy, Gen Z and Millennials Do It Their Way

Charitable donations have a way of uniting people! Avoiding these pitfalls could encourage your employees’ spirit of generosity.

Dennis Beaver practices law in Bakersfield, Calif., and welcomes comments and questions from readers, which may be faxed to (661) 323-7993, or e-mailed to Lagombeaver1@gmail.com. And be sure to visit dennisbeaver.com.

Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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After attending Loyola University School of Law, H. Dennis Beaver joined California's Kern County District Attorney's Office, where he established a Consumer Fraud section. He is in the general practice of law and writes a syndicated newspaper column, You and the Law. Through his column, he offers readers in need of down-to-earth advice his help free of charge. "I know it sounds corny, but I just love to be able to use my education and experience to help, simply to help. When a reader contacts me, it is a gift."