PAYROLL GIVING: Bridging the gap between Corporates and NGOs

29 Aug 2022

Over the last few years, as the world has transitioned from what was termed as ‘normal’ to a completely transformed way of life, one thing that stood out amongst the rest was how collectively yet individually, we all banded together. One tangible way that most people made an impact was by giving to charity. According to CAF’s giving report it was recorded that, in the wake of the pandemic, globally more people have helped a stranger than has ever been recorded before. This is reflective of the fact that people collectively and individually lived out the oft quoted saying, ‘giving is not just about making a donation, it is about making a difference’. While this may be the case in terms of individual giving, corporate giving has also seen a complete transformation, especially in the last two years.

In terms of giving, in India, corporate social responsibility contributes to 23% of private giving in its totality. This number is only expected to rise and is estimated to go up to 32% by 2026. However, the question that this brings about is, how can an employee also contribute towards the corporate responsibility of an organization?

The answer to this lies in implementing payroll giving. Payroll giving, employee giving or Pay as you Earn (PAYE) concept gives employees of an organization the unique opportunity to engage at a deeper level with a charity of their choice. In a nutshell, payroll giving is an organized monthly activity, where the agreed upon amount is directly deducted from your salary by your employer to the project of your choice. It is a great way to demonstrate your social commitment in an organized manner. Apart from payroll giving being easy and simple, it also initiates the ‘culture of giving’ in the organization and instils a team spirit amongst employees who feel linked to a larger cause.

Software giant, Microsoft’s India vertical began their employee giving program in the year 2000, and is now touted as the largest corporate giving program in the world. Through their program, employees of the company donate to a charity through their salary which is then equally matched by Microsoft. Since its inception within the company, 1,50,000 youth and children have been supported through the Giving Program and the company has helped over144 NGOs with a total of Rs. 19.32 crores.

Globally, IBM has paved the way for workplace giving. The tech giant began its workplace giving in the year 1978 for its employees in U.S. and Canada. Titled Employee Charitable Contribution Campaign (ECCC), the company gives its employees the opportunity to contribute their time, talent and monetary support to all local communities in which they live and work. Since its inception, IBMers have contributed more than $1 Billion.

These examples are a testament to the widespread positive impact that workplace giving can have and how they aim to foster the relations between the key players of; the market (corporates) and the society (NGOs).

While we have read about the positive impact of engaging in employee giving, it is important for us to understand what benefits payroll giving have for the employee:

1. Choose a Cause of your choice: Employee giving allows the employee to choose a cause that they feel the most led to contribute to whether that be education, skill development, healthcare, disaster relief etc.
2. Simplifies the donation process: Oftentimes, when an individual sets out to make a donation, the whole donation process can seem cumbersome and sometimes act as a deterrent to the act of giving. Employee giving seeks to simplify the process by directly deducting the desired amount from the individual’s monthly salary. In turn, making the process smooth and convenient.
3. Tax Benefits: Individual donations made to a charity are also tax deductible in India under section 80(G) of the Income Tax act and therefore, beneficial for the employee.
4. Volunteering: Payroll giving also allows the employee with various opportunities to volunteer. Many NGOs function because of the grants they receive or the money they fundraise from donors. These often are the only resources available to them for running programs and employing people. This often leaves a variety of gaps in service that the people do not have the capacity to fill. Volunteering allows the individual to use their skill expertise and enable the organization to bridge the gap. Statistics show that Deloitte India’s CSR activities saw its volunteering participation rise by a whopping 400%, during the lockdown.

While payroll giving is beneficial for you as an individual, it also helps the cause you intend to support. One major benefit is in the fact that a set monthly donation will help them plan and forecast their incoming funds in a more structured manner and enable them to implement their projects well.

If you have read so far and you want to encourage your employer to enroll in payroll giving, here is how INDIAdonates can help you:

1.     IDENTIFICATION: INDIAdonates helps narrow down and select projects which come under the same focus areas as your corporate organization. Our due diligence process ensures that we provide to you only the MOST credible NGOs.

2.     DONATE AND SAVE: Each employee will be provided with their own individual receipt, not only as an acknowledgement of their contribution but also to enable them to claim Income Tax exemption under 80 (G) of the Income Tax Act. Each employer will also be able to track the progress of the project through our portal.

3.     GET INVOLVED: For a more hands-on involvement in the project the employees wish to support, INDIAdonates also facilitates volunteering opportunities.

Payroll giving is an approach that, in the long run, promises to create a sustainable engagement and culture that will impact the charity, the individual and the wider community.