Nonprofits Win as Tech Company Replaces Referral Bonuses With Donations

The innovation coming out of Silicon Valley has affected the way we communicate with each other, consume information, and shop for vacation to groceries. These fast-growing companies are also changing how corporations give.

 

Instead of offering cash bonuses, which can top $7,000 for especially hard-to-fill positions, cloud-based content-management provider Box gives $500 to referring employees to donate to nonprofits of their choosing.

The Boxer Referral Bonus for Good program helps inspire employee referrals at a lower cost — a key feature at the mid sized tech company, which must vie for employees in a notoriously tight job market while watching its bottom line.

The Box employee headcount has more than doubled in recent years to over 1,700. Nearly one-third of its new hires come from such employee referrals.

So it was no small risk when the company seized on an idea from a staff member to upend its referral program, starting in January 2016. Since then, it has generated more than $100,000 in nonprofit donations, says Bryan Breckenridge, executive director of the company’s foundation, Box.org.

The program is a natural complement to the company’s other workplace-based charitable efforts, including employee giving and volunteer opportunities.

The idea has huge potential, says Mr. Breckenridge, particularly for start-up companies that are not yet profitable and can’t make large donations but that aspire to build philanthropic corporate cultures attractive to millennial workers. At Box, talking at lunch about how you’re going to donate money has proved more interesting than how to spend a cash bonus, he says.

"This $500, especially for our younger employees, it’s frankly a lot more money than they would ever donate personally, being early on in their careers," Mr. Breckenridge says.

In January 2016, the Boxer Referral Bonus for Good program kicked off. Recognizing that not everyone would be happy to lose a chance at additional cash in their pockets, Mr. Breckenridge and his colleagues took care with how they marketed and promoted it to employees.

In addition to the $500 donation, each employee who makes a successful referral is eligible for a quarterly drawing to win a free vacation. That winner is selected with dramatic flair at company wide meetings, Mr. Breckenridge says. He also uses the meetings to highlight the nonprofits that boxers have chosen to donate to, he says, among them the Environmental Defense Fund, Code2040, and Charity: Water, as well as funds focused on disaster relief and refugees.

Employee referrals at the company are up both in absolute numbers and as a percentage of employees, say Mr. Phillips.

"In the end, we have created a net savings as a company on this program but elevated our charitable giving dramatically," Mr. Breckenridge says.

Box is by no means the only company pushing the frontiers of corporate philanthropy and employee engagement. Salesforce, for example, gives all employees seven paid days annually for volunteer work. Its top 100 volunteers get $10,000 grants to donate to nonprofits of their choice, and 10 volunteers are selected for a trip to Hawaii.

Derrick Feldmann, who has spent years studying the charitable-giving habits of millennials as CEO of the consulting and research firm Achieve, says that corporate culture involving social good ranks third — after pay and benefits — for millennials when it comes to choosing an employer.

More companies are taking note, offering employees things including paid time off to volunteer.

"We are in a new era of corporate social responsibility," Mr. Feldmann says.

The Box program hits on a lot of key notes, he says, including engaging employees on how philanthropic capital will be expended, instead of company heads deciding where to direct the money. He describes that bottom-up approach as a sort of "democratizing" of the workplace.

Mr. Breckenridge notes that thousands of start-up companies in San Francisco alone have received or are seeking venture-capital funds. Asking those backers for money for a charitable program may not resonate, he says.

But if they were to go to investors and say, "We are going to turn on a mechanism that is going to help us acquire fantastic talent, and perhaps at a lower cost, and set the tone for the culture of our organization to be contributors to the community, the investment community would be falling all over themselves to fund those endeavors," he says.

That’s not blind optimism, he maintains.

We invite you to join the webinar to learn more about how nonprofits can take advantage of these and other sustainable philanthropy models. Register now!  How to Use Sustainable Philanthropy to Advance Your Nonprofit