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Legal Issues When Matching Employee Donations to Charity

By Christopher Coble, Esq. | Last updated on

Most companies are aware that matching contributions for employee donations to charity is one of the best gifts you can give your employees. Matching your employees' gifts can demonstrate that you care about the issues that they care about and it gives employees a voice in the company's charitable efforts.

But no good deed goes un-litigated, as they say, and employee gift matching programs can raise some legal concerns for small businesses.

Which Good Cause Is Good Enough?

Under most matching gift programs (at least those not aimed directly at the employer's political action committee), an employer will match an employee's donation to the charity of the employee's choice. But as Forbes points out, "Companies need to identify what issues or organizations they will support and define the boundaries."

In other words, you can't leave it all to your employees to choose the charities. Doing so could require too much work and too much risk on your end to create a vetting process, perform the necessary due diligence, acquire proper documentation, and ensure the employee isn't benefiting economically from the match. By creating a list of approved organizations beforehand, you will only need to go through this process once, rather than repeatedly for each employee.

A Written Policy for Writing a Check

Make sure you got your matching policy in writing and that eligible employees understand it. That will keep everyone on the same page when it comes to corporate gift giving.

Some other legal considerations you may want to keep in mind when putting together your policy:

  • Any volunteer activity or charity event should be unrelated to company's usual business.
  • Your employees' participation should not bring direct economic benefit to company.
  • Charity events should take place outside regular working hour.
  • Employees' participation should be truly voluntary.
  • Your company should not employ and regularly pay workers to participate in charity events.

Before putting a matching donation policy in writing, you may want to consult with an experienced business attorney in your area.

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