Here's why billions of charitable giving dollars go unused every year

As Giving Tuesday nears, more than 26 million people in America work for companies with charitable-donation matching programs, yet as much as $7 billion in donations from those companies go unused every year. 

One of the biggest reasons for this is simple: People don't know their employer has one of these programs.

I know. I was one of those people until just recently.

The good news, however, is that a single email changed that and can do the same for you, just in time for what is traditionally one of the biggest giving days of the year.

My story

In late August, I started an online fundraiser for the American Cancer Society, using GoFundMe. I did it in honor of what would've been my late father's 75th birthday. He died in October 2020 after a multiyear battle with cancer, and I couldn't think of a better way to honor him than to raise funds to help wipe cancer off the face of the earth.

Once the fundraiser page was live, I began reaching out to folks: first family and then friends, colleagues, social media connections and even my employer, LendingTree. I wasn't shy about it.  

I vaguely remembered hearing something during my three years with the company about LendingTree matching employees' charitable donations, but I wasn't certain, so I sent an email to a colleague.

Later that day, I got a response: Yes, the company matches up to $1,500 in cash donations or volunteer hours per employee, per year.

That was an eye-opener for me.

It made me want to find out more about these programs and share what people needed to know about them. After all, if I didn't know about my company's policy, it seemed likely that most people didn't know about their company's policy either, meaning that lots of money was being left on the table. That is absolutely the case.

Charitable donation matching programs are everywhere

Countless companies have donation-matching programs. The idea reportedly dates to 1954, when General Electric created the first matching donations program. Today, these programs are common.

According to DoubleTheDonation, which works with companies to help maximize their programs, 65% of Fortune 500 companies offer matching-donation programs – from Disney to Apple to American Express — and more than 26 million people work for companies of all sizes that have these programs. 

Companies such as DoubleTheDonation or BrightFunds offer tools to help companies streamline the donation process for employees, whether you're looking to create your own fundraiser, set up a recurring donation or request a match for a recent donation you've made.

However, many employees never take advantage of these programs. According to DoubleTheDonation, while $2 billion to $3 billion is donated through matching programs annually, anywhere from $4 billion to $7 billion in matching donation funds goes unclaimed every year.

That is a staggering amount of money being left on the table. An additional $7 billion in the hands of charities around the country could have a seismic impact. It could change the world for the better in incalculable ways.

Raising awareness is key

But how can we change it? How do you unleash those billions of dollars?

Job No. 1 is to increase awareness:

• Ask if your company has a donation-matching program. If they do, learn more about it and take advantage of it. If they don't, ask why and then ask them to consider starting one.
• Then tell your friends, family and coworkers to do the same thing.

The more people who know about these programs, the more they will be utilized. The more they're utilized, the more money will into the hands of charities. And the more money charities have, the more good they can do.

And ultimately, that's what it's all about.

Getting the most out of your company's donation matching program

While it's great to be excited about helping a worthy charity, there are some important things to know before you donate. As with any financial transaction, rushing into a donation without doing your homework can lead to regret.

Here are a few tips for using your company's donation matching program:

• Don't forget to actually ask for the match: Everyone has a to-do list a mile long, so it is crucial that you take steps to ensure that you put in a request for a company match. If you donate through a donation program's online tool, it will likely be easy — just make sure to indicate that you want your company to match your donation, and if it is eligible, the match request will be submitted when you make the initial donation. If you make the donation through other methods, your best move is to request the match from your company as soon as you complete the donation. If that's not possible, consider putting a reminder on your calendar, set for a few days after the donation date.
• Remember that it is not just about the money: Cash donations are always great but volunteering your time can be just as important. Many companies will donate a set amount, say, $25 per volunteer hour, so be sure to ask your company about its policy. It's a great way to give if your budget is stretched too thin for a cash donation.
• Understand the maximums: Matching programs, while generous, have limits. Before you donate, make sure you understand what those limits are. For example, LendingTree will match up to $1,500 per employee per calendar year, which includes both cash donations and donations based on volunteer hours. Some companies reportedly will even match $10,000 or more per year, per employee. Many of these  online donation tools will track for you just how much you've donated and had matched in a given year — though it is probably a good idea to track that yourself, separately, as well. Of course, there's nothing that says you must limit your donations to what your company will match.
•  No need to "give until it hurts": Just because your company will match donations up to a certain amount each year, doesn't mean you have to give the maximum amount. If your cash donations begin to cause you real financial hardship, it is time to reassess. As noble as it may be to donate, wrecking your own finances to do so is not advisable. Examine your budget to see how much in funds you have available for donations and proceed from there. And again, remember that volunteer time can be every bit as valuable as that cash.
• Give to multiple organizations if you prefer: These donation programs are flexible. If you have multiple causes about which you are passionate, divvy up your donations among them. The online tools that most donation programs have typically allow you to easily search charities throughout the world — meaning that your options are likely wider and more varied than you might imagine. And all these organizations will be grateful to you for your contribution.
•  Understand the pros and cons of donating with a credit card: Online tools make it so easy to donate with a debit or credit card. That's a wonderful thing for those deserving charities, but it is not without cost. Before you donate, look at the fees associated with your donation. Know that if you donate $100 with a credit card, only $98 or possibly less will be given to the charity — whereas if you write the charity a check or pay in cash, the whole $100 will go to the organization. However, some online donation tools may give you the option to cover the cost of that transaction, which may lead to that $50 donation ultimately setting you back $52.50 or something similar.
•  Spread the word: Odds are that many of your coworkers have no idea your company will match donations, so tell them. Don't be pushy, and don't be judgmental if they decide not to take part. Simply letting them know about what these donation-matching programs offer can be enough of a gentle nudge to make a difference.

Matt Schulz is Chief Credit Analyst at LendingTree.