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.

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Paul Tracy
Paul Tracy

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 3 million monthly readers.

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