Posted on January 16, 2009

Companies Cutting Back on Matching Gift Programs

A growing number of companies that have been hit hard by the recession are cutting back on their charitable matching gifts and volunteer programs, the Wall Street Journal reports.

Such programs have been popular for decades with nonprofits, employees, and companies themselves, which see the programs as both a recruiting tool and a way to burnish their image while receiving tax deductions. Over the past year, however, more than a dozen large U.S. companies — including Northrop Grumman, General Motors, and Pfizer — have closed the door on their matching programs or significantly reduced the matching ratio, while others have lowered matching limits or excluded retirees or part-time employees from participating.

Although matching programs make up a small portion of total corporate giving — about 10 percent of the $8.6 billion given by corporations in 2007, according to HEP Development Services — cutting such programs could have a significant effect on nonprofits and universities, many of which are already struggling to raise funds. According to the Council on Foundations, the typical foundation endowment has lost 30 percent of its value over the last year or so, and confidence in the markets has been further eroded by the $50 billion Ponzi scheme allegedly run by Bernie Madoff.

At the same time, some companies have managed to maintain — or even increase — their matching-gift programs. In December, the GE Foundation announced that it would redirect 20 percent of its total charitable giving in 2009 — about $20 million — to nonprofits working to provide basic needs and would double the match for employees and retirees who donate to food and shelter organizations.

Still, many nonprofits — especially those in communities in which major companies are headquartered — are worried about cuts in corporate matching gift programs. "We lost Ford in 2006, and this past October we lost GM, and they were our biggest matching-gift companies," said Lorrie Graff, annual giving coordinator at Michigan Technology University. "There is a definite impact to our annual matching...I don't know if they'll ever come back."