Payroll Giving is a sophisticated, streamlined approach for employees to make regular donations to their preferred nonprofits and causes by deducting contributions from their paychecks. This method empowers employees to consistently support causes they are passionate about without needing to take an action or fetch a credit card. With Goodworld’s Payroll Giving functionality, admins have the flexibility to customize pledge frequencies, set up program disclaimers, create compelling calls to action, and even encourage pledges which are percentages of salary rather than dollar amounts to enhance employee generosity and impact.
Mechanics of Payroll Giving
Payroll Giving is feature within a workplace giving campaign in Goodworld, allowing participants to pledge donations at predetermined intervals, typically aligned with pay periods. These pledged donations can be directed to multiple funds or directed to a single fund, depending on the employees’ preferences.
Critical Coordination with Payroll Departments: The success of a Payroll Giving campaign often requires close collaboration between the payroll department of the participating company and the nonprofit responsible for distribution of the donations. Goodworld Impact Fund – our 501(c)(3) – is such an organization but United Ways often operate in this capacity as well. Unlike traditional online donations, payroll donations are pledges, meaning no actual transfer of funds occurs until the company pays the sum total of employee deductions for a particular period (typically monthly or quarterly). At that point, the company either pays an invoice provided by the nonprofit or tallies the deductions themselves and writes a check to cover the total owed.
Campaign Duration and Pledge Collection: A standard Payroll Giving campaign spans a full calendar year, during which time the pledged charitable deductions are being withheld from employee paychecks over that 12-month period. To ensure accounting simplicity and accuracy, pledges are typically collected at the campaign's onset within a 2-week period known as the Solicitation Period.
The Solicitation Period serves a dual purpose:
Participation Measurement: It enables the company to gauge the rate of employee participation early in the campaign.
Contribution Estimation: It provides a basis for estimating the total combined contributions that employees will make via payroll over the course of the 12 months.
Important Considerations for the Solicitation Period:
The number of employees invited to participate during the Solicitation Period is predetermined.
Employees hired after the Solicitation Period may not be eligible to participate in the current campaign and should instead be considered for the subsequent year’s campaign to maintain consistency and fairness in the contribution process.
That said, many companies are flexible enough to allow participation mid campaign.
Rollover Gifts and Payroll Giving
The Rollover Gifts feature enhances Payroll Giving campaigns by allowing admins to seamlessly carry over pledges from previous campaigns into the current one. Admins can either auto-renew these pledges or offer employees the option to opt-in, ensuring continuity in their charitable contributions. Additionally, admins can customize the call to action on the pledging screen to highlight any specifics of the new campaign. This feature allows employees to review their past pledges, maintain the same preferences, or make adjustments, streamlining the process and fostering ongoing participation in charitable giving.
Nude to Increase
Admins are empowered to give donors a friendly “nudge”, allowing them to increase their gift by a specific amount. Admins can control the language of encouragement along with the percentage increase options that are displayed to donors.
Setting Up A Payroll Giving Campaign:
To initiate a Payroll Giving campaign:
Create a New Campaign: On the Campaigns tab, click "Create New" and then select the Workplace Giving template from the list of Goodworld templates. This will ensure the base features and settings are enabled. This is the designated account that will receive the total pledged contributions at the campaign's end.
Fund Selection: During the setup process, you will have the option to select specific funds that employees can choose to contribute to, thereby offering flexibility in supporting various causes.
Steps of Payroll Giving:
Labels (Select Giving Types)
Admins can customize the labels and description for the payroll giving option in the first step of the donor journey.
Summary (Call to Action)
Here, admins can customize the title, subtitle and bullet points that the employee would see before committing to a payroll pledge. The bullets are intended to describe how Payroll Giving works and its benefits.
3. Pledge
Within the Pledge tab, admins can customize the call-to-action that is visible at the top of the form. Admins also have the option to encourage donors to pledge a percentage of their salary instead of a dollar amount. The button labels along with the suggested salary percentages are customizable, along with default selections and pay periods.
Admins also control what pay period frequency options are available for donors to choose from. In combination with Goodworld’s tagging feature, admins can even set custom rules to donors only see the pay periods that are relevant to them. For example, if a certain department has a pay period frequency that is specific to that department, and those employees are tagged in the Goodworld platform in such a way, then they will only see that relevant pay period frequency when making their payroll pledge.
The total pledge disclaimer allows for admins to customize the minimum total pledge amount required to make a payroll pledge and the text in the description box. Admins can also add extra instructions or information beneath the “Continue” button.
Encourage % of Salary
Admins also have the option to encourage donors to pledge a percentage of their salary rather than a dollar amount. Admins can customize the language of the labels, along with the percentage options, default selections and pay periods.
4. Confirmation
Here, admins can control the call-to-action and description on the final step before donors complete their payroll pledge.
Benefits of Payroll Giving
Tax Benefits
Payroll giving allows employees to make pre-tax donations directly from their paychecks, reducing their taxable income. This means that employees can enjoy immediate tax savings, as donations are deducted before taxes are applied, making charitable giving more affordable.
Steady Income for Charities
By facilitating regular, ongoing donations through payroll deductions, this feature ensures that charities receive a consistent and predictable stream of income throughout the year. This reliable funding enables nonprofits to plan and execute programs more effectively.
Hassle-Free Philanthropy
Payroll giving simplifies the donation process by eliminating the need for additional payment methods like credit cards or bank transfers. Employees can support their chosen causes automatically with each paycheck, making philanthropy effortless and ongoing.
If you have questions about Payroll Giving, schedule a support call with our success team.