Our data shows that enabling payroll donations is the second-most powerful driver of participation, as it gives users the option for their donation to be automatically deducted from their paycheck. This makes giving seamless and it reduces steps for employees.
Whether it’s a one-time or recurring donation, donating through payroll allows your employees to donate any amount, big or small, directly from their next paycheck — so anyone can take part in your program.
Here are some other benefits of payroll giving:
- Drive participation by simplifying the donation process and encouraging recurring donations
- Integrate easily with leading HRIS systems
- Automated tax receipting
- No credit card merchant fees, meaning more funds go to nonprofits
- Engage Globally (and locally) with 13 currencies available
The Benevity Payroll Process: Step-by-Step
The process is a collaborative cycle between Clients and Benevity to ensure employee donations are accurately deducted and distributed.
Step 1: Employee Selections & Donation Cut-off
- Action: Employees within their designated pay groups sign up for recurring or one-time payroll donations via the Benevity platform.
- The Cut-off: On the Donation Cut-off Date, Benevity "freezes" the data for that specific pay cycle. Any changes made by employees after this date will be captured in the following pay cycle.
Step 2: Deduction File Generation & Download
- Benevity's Role: Benevity generates a "Deduction File" containing all the donation amounts requested by employees.
- Client's Role: Usually the next day after the cut-off, the Client’s payroll administrator downloads this file from the MFT to prepare for payroll processing.
Step 3: Payroll Processing
- Action: The Client imports the deduction file into their internal payroll system (e.g., Workday, ADP, SAP).
- Payroll Run: The Client processes payroll as they normally would, incorporating the donation amounts as post-tax (or pre-tax, depending on the region/setup) deductions.
Step 4: Pay Date & Deduction Capture
- Action: On the official Pay Date, the funds are deducted from the employees' paychecks.
- Result: The Client now holds the funds that need to be sent to Benevity for distribution to the selected charities.
Step 5: Uploading the Success File
- Action: Once payroll is finalized, the Client generates and uploads a Success File back to Benevity.
- Purpose: This file confirms which deductions were actually successful (e.g., if an employee was on unpaid leave and didn't have enough earnings to cover a donation, that donation would be marked as "unsuccessful").
Step 6: Reconciliation & Committing Donations
- Benevity's Role: Benevity reconciles the data from the Success File against the original Deduction File.
- The Post-Commit Report: Once reconciled, Benevity "commits" the donations. They then generate a Payroll Reconciliation Post-Commit Report, which confirms the final amounts to be invoiced.
Step 7: Invoicing & Donation Report
- Action: The total deducted amounts (the "Success" amounts) are included in the monthly Donation Report.
- Final Step: The Client receives an invoice for these total amounts. Once the Client pays the invoice, Benevity distributes the funds to the respective non-profit.
If you’re interested in exploring payroll for your program, please reach out to support, or learn more through our Payroll course.