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What’s the Value of a Federation?

In more than 30 years of experience in workplace philanthropy, some of the most common questions I’ve encountered regard the role of federations. While increasing numbers of corporate leaders recognize the value of employee engagement through participatory philanthropic activities that support CSR initiatives and business strategy, it’s still perhaps not fully understood how the nonprofit federations fit into that.

And yet, when considering developing and administering a program that offers diverse (or focused) cause choices, meaningful volunteerism and educational opportunities, and efficient processing and distribution systems, a federation can be a company’s best friend.

As the traditional model of workplace giving has evolved this relationship is even more critical; federations have evolved as well in response to changing technology and partner and donor needs – while still bringing to the table decades of experience in the industry and direct connections with diverse charity members.

Why Charitable Federations?

Federations have traditionally been a feature of most workplace philanthropic campaigns for three main reasons:

  • Charities voluntarily choose federations as their representatives in the workplace. My federation was created by its founding member charities specifically for this purpose, and they continue to play a critical role in our governance.
  • Federations take on the job of evaluating hundreds of member charities annually.  This means workplace partners and employee donors can be confident that the organizations they choose to support meet the highest standards of performance and financial integrity. When you consider that there are currently more than a million 501(c)(3) organizations operating in the U.S. alone, this function is invaluable.
  • Charitable federations provide many benefits to companies, donors and charities. For corporate partners the federated model creates efficiencies in every arena — from providing a single point of contact that represents many charities, to offering resources that help reduce the cost of the program to the company. EarthShare’s online pledging technology, for instance – Give @ the Office – allows our partners to extend an inexpensive, effective way to make donations to our member charities, and beyond.

 

These benefits don’t stop at the administrative level; charitable federations are now offering complete turn-key programs and a range of activities to promote employee engagement.

At EarthShare we convene employee groups in several major cities for Green Team Forums. These free, private peer meetings unite professionals from a wide range of local industries in each city for candid discussion about corporate sustainability and environmental issues that affect today’s workplace.  As employees have emerged as one of the primary drivers of corporate sustainability initiatives, these forums also create a space for like-minded professionals to explore challenges and exchange best practices around engaging their workforces in those initiatives.

The EarthShare @ Work toolkit also offers educational and hands-on experiential opportunities. We can facilitate workbook supplemented discussion courses that combine education and social dynamics that engage employees in aligning their actions with sustainability initiatives; inspire them to innovate new ways of doing business; and create more focused corporate strategy.  Through our volunteerism program we work closely with employer partners to create enriching opportunities and events with our network of national and local environmental and conservation organizations.

 

Modern federations are consultants and advisors.

Many charitable federations understand that the face of corporate and employee philanthropy has evolved, and recognize the growing need to connect those activities with the bottom line. Helping workplace partners align their employee engagement and giving programs with market strategy and culture is part of the modern federation’s value proposition.

At EarthShare we specialize in connecting our employer partners with environmental charities and nonprofits. But for corporations to work successfully with any community, it’s crucial that missions align and the employees feel strongly about their cause choices and the results they’re supporting with their money and time. We also encourage partner companies to ask themselves the right questions when planning an employee engagement and giving program, something we outlined in a recent article.

Of course, the best planned program is for naught if it doesn’t drive employee engagement and participation.  Particularly during troubled economic times, helping employers address the challenges of building employee motivation is a needed service.

 

Efficiencies of federating your employee giving program.

One of the most important benefits of using the federated model – and perhaps the most misperceived – is the financial disbursement aspect.

Federations offer the service of aggregated reporting and distributions to many individual charities, and as we are set up for that purpose our internal systems can readily support the administrative aspects of processing a giving program.  Bypassing the federation and sending employee contributions directly to individual charities is much less efficient and costs the company and the charities in resources that could be better applied elsewhere.

From the company’s perspective, it is cost prohibitive to process pledge data and distribute monthly checks to numerous charities. Federations ensure accurate reporting and distribution of campaign results to the company, to donors and to participating charities.

For charities, federations eliminate the unnecessary expense and work engendered by having to process individual financial transactions. This allows charities to focus on and direct funding and manpower to their mission work instead of to administrative functions like reporting and processing – a fact that every donor can appreciate.

 

Connect, contribute, volunteer.

Today’s charitable federation offers seasoned guidance and resources to build the single critical element that drives participation: helping employees develop vital personal connections with the program and causes. Whether that means bringing in charity speakers to explain how donations are being used, providing compelling data and success stories to illustrate the impact of participation, or offering technology solutions to make participation as easy and interactive as possible, a federated partner is set up to extend these resources and work to create true engagement around corporate CSR and engagement goals.

Kal Stein
Kal Stein


Kalman Stein has been President and CEO of EarthShare since its inception in 1989. Under Mr. Stein's watch, EarthShare has successfully partnered with a wide range of corporate and public sector workplaces, engaging more than eight million employees nationwide in connecting with and supporting environmental and conservation causes. Mr. Stein is a founder of the Charities @ Work coalition, and chair of the Combined Federal Campaign Foundation.
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