Empowering Staff to be Agents of Change through their Financial Support

While my first article offered ways employers can empower staff to act upon their social and environmental values through corporate volunteer programs, this article presents companies with ways to enable staff to financially support causes that are important to them.

1. Retirement Plan Fund Options – According to Schroders 2022 Retirement Survey, 87% of respondents want their investments to align with their values and 74% would increase their retirement plan contribution rate if Environment, Social, and Governance (ESG) funds were offered in their company plans. However, the New York Times reports that only 2.9% of retirement plans actually offer ESG funds. Adding ESG funds to retirement plans would create an opportunity for employers to attract employees, especially younger ones.

The few plans that do offer ESG funds, frequently offer just one US large company “blend” fund, meaning a mix of growth and value stocks (Barron's). Funds focusing on water scarcity or racial inequity, for instance, are not likely to be found among 401(k) fund options. This provides another way for employers to differentiate themselves by providing the full range of equity and bond ESG fund options, so employees can build a diversified retirement portfolio that aligns with their values.

ESG funds underperformed in 2022 because of the selloff in technology stocks, but over the longer term, ESG investment returns equal or exceed other funds. Late last year, the Department of Labor announced that employers can use ESG factors when selecting funds for retirement plans, reversing an earlier Trump administration policy, and clearing the way for plan fiduciaries to add ESG funds to their plans.

2. Shariah Compliant Funds in Retirement Plans – Shariah law prevents Muslims from making certain investments. Employers can show their sensitivity to employee’s religious practices and provide investment options for Muslim staff by offering funds that comply with Shariah principals.

3. Charitable Donations through Payroll Withholdings – Employers can support their staff’s social and environmental values by offering the option to make charitable contributions through payroll deductions. Several companies have products that integrate into the employer’s payroll system to facilitate this. This chron.com article shows you how.

4. Publicize Your Matching Gift Program – According to Double the Donation, 78% of donors working for companies that match employee charitable gifts are unaware that their employer will match their donation. Only 7% of employees actually submit the matching gift request. Although this might create a greater expense, companies will increase employee goodwill by reminding them that their charitable gifts will be matched by the company.

5. Staff Input for Employer Grants – Frequently corporate giving is directed to a senior executive’s preferred cause. Instead, demonstrate your commitment to employee values by allocating a portion of your charitable giving budget to causes selected by the staff. Here are some ways:

Partner with Employee Resource Groups (ERGs) *

a. Some ERGs support particular charities. Employers can partner with ERGs to select charities to support with grants.

b. Survey Employees – A Benevity study showed that 85% of employees feel that including them in the employer’s charitable giving decisions builds trust in the business. Survey the staff to determine the issues they care about the most and support organizations with that mission.

These steps will build trust and loyalty among staff by showing that social responsibility is an important company value.

* Employee Resource Groups (ERGs) are voluntary, employee-led groups whose aim is to foster a diverse, inclusive workplace. Members share a characteristic, whether it's gender, ethnicity, religious affiliation, lifestyle, or interest.