Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Employee Contribution Fund

What it is:

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

How it works (Example):

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 it Matters:

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.