February 5, 2012; Source: Washington Post | Workplace giving constitutes the single-largest pool of funds for the nonprofit sector, according to Boston University scholar Emily Barman. Charity Navigator estimates that workplace giving generates nearly $5 billion annually for nonprofits. While the nature of workplace giving has been evolving for decades, that change is accelerating now, creating new opportunities and challenges for nonprofits to tap this important source of often unrestricted funding.

Until the 1970s, United Ways were the dominant vehicle for workplace giving. Since then, other charities and federations have competed for access to individual contributions through the workplace. In the last decade, employers with workplace giving programs have increasingly offered their employees more choices in nonprofit beneficiaries, and thus reshaped the dynamics of how employee donations flow toward nonprofits. Donor choice is now the norm for workplace giving: the majority of United Ways, for example, now offer some form of donor control over how resources are allocated. According to a corporate workplace giving program survey published by the LBG Research Institute in 2010, the vast majority of responding employers offer choices other than United Way to their employees.

It’s hard for smaller employers to implement flexible workplace giving programs because administrative support requirements can be complex. But a new online giving portal focused on the Washington, D.C. metropolitan area aims to simplify the process. The D.C.-based nonprofit Catalogue for Philanthropy (CFP) vets and connects smaller local nonprofits (with annual budgets under $3 million) with local individuals and companies in the metropolitan region. Individuals can visit the main CFP website to connect with volunteer and donation opportunities; this is similar to other regionally focused online giving portals recently launched by Groupon and Razoo. However, CFP also offers an opportunity for corporate sponsorships, through which companies gain a customized portal for workplace giving and can tie such giving to their company brand. 

The move toward increased donor choice in workplace giving has many drivers, from general consumer interest in customization, to employer interest in cost-effective benefit programs and branding. Another potential driver is backlash against strategic initiatives such as United Way’s Community Impact investments, which narrow the range of eligible nonprofit activities at the community level. No matter the cause, however, the changed environment for workplace giving creates communication opportunities and challenges for nonprofits to make the case for investment, especially unrestricted investment. Do you have a strategy for the new world of workplace giving? –Kathi Jaworski