Companies with employee giving campaigns have a new option to offer their workers that provides the advantages of a donor-advised fund without some of the drawbacks. Growfund, a program offering by Global Impact, allows workers to contribute to personal accounts that can be invested, saved or donated anytime, just like a typical DAF. But since Global Impact is backing the program with its own funds, the minimum investment amount that most DAFs require—often many thousands of dollars—don’t apply, the organization said, making it more amenable for employees who want to make small, incremental contributions to charity.
“Growfund allows employees access to their own personal foundation through their corporate workplace,” stated Ann Canela, vice president of Global Impact. “Employees can give through one-time, recurring or payroll giving.“
According to the group’s representatives, the program allows workers to contribute to their accounts directly via the website or via payroll deductions, if the company has it set up to do so. The accounts can be accessed by the employee anytime, from anywhere, and are portable, meaning that they follow the worker should he or she change companies. There are no fees to the employee, who has a choice of some 800,000 charities to direct the funds to—the full roster of 503(c)(3) organizations rated through Guidestar are eligible for the program, and the website links to Guidestar’s reports for each one to aid Growfund account holders in evaluating which charity to support.
The funds are managed by a third-party brokerage, and investment options currently amount to a money market account and the Vanguard 500 Index Fund. Account holders can allocate their funds between the two as they wish, and can change those allocations at any time. In the future, the group said, the program will give account holders a greater range of options to choose from, depending on the amount of risk they are willing to take.
There are several ways in which companies can offer the service to their employees. The simplest option is to endorse it, spread the word and encourage workers to utilize it as one of several methods for supporting the causes they care about. There’s plenty of material on the website that companies can distribute to their workers that give the ins and outs of the program, the benefits of using a DAF instead of direct donations to charity and instructions for getting started. The onus would be on the employees to set up their accounts and make donations out of pocket as they see fit. This is entirely free for all involved, the organization told Corporate Philanthropy Report.
The next level up, however, comes with a cost. For $5,000, businesses can get what’s called a “white label” version of the program that allows it to be branded by the company—instead of Growfund by Global Impact, for example, it could be XYZ Corp Growfund (or something similar), which offers the same level of service and options as above but provides the company more exposure and visible connection with the program in the eyes of its employees.
The third option costs $10,000 and includes the white label version plus all supporting services available to set up and administer an automatic payroll deduction program. According to Global Impact, the $10,000 price tag is relatively low compared to other programs and makes Growfund more feasible for small and medium-sized businesses.
“Corporations can offer employees access to an additional strategy for financial wellness alongside their retirement plan,” Canela said. “And with money being invested with the first dollar, employees can be an extension of the company’s corporate citizenship and build their personal legacy.”
For more information on the program, visit www.mygrowfund.org.