posted on 06-06-2019

Employee Contribution Fund

Updated August 11, 2020
Written By
Paul Tracy

What is an Employee Contribution Fund?

An employee contribution fund is a company-sponsored plan where employees deposit (contribute) their own money towards a charity.

How Does an Employee Contribution Fund Work?

In an employee contribution fund, a company sets up a program where employees can make donations (usually deducted directly from their paychecks) to a charity that the company supports.

Often the company will match the funds. For example, if an employee contributes $10 to the fund, the company might contribute an additional $5 or $10 in response.

Why Does an Employee Contribution Fund Matter?

Employee contribution funds can raise a significant amount of money for a charity because of the company match that is frequently part of the program. They also send the message that the company is socially responsible and is behind a cause at a grassroots level.