Book Excerpt: How Microsoft Uses Employee Donations to Build a Culture of Goal

[Editor’s Note: Akhtar Badshah, who led Microsoft’s philanthropic efforts from 2004 to 2014, writes about the roots and impact of the company’s giving campaign in his new book, “Purpose Mindset: How Microsoft Inspires Employees & Alumni to Change the World.” This excerpt is reprinted with permission.]

Entrepreneurs have only one focus-make a great company and make sure the company survives, prospers and grows. If the company is young and on a growth track, especially in the 1980s, philanthropy and giving back to the community are not always priorities. That’s why it’s important to take a closer look at how Microsoft launched its employee donation campaign, create this “good donation machine” over the last 35 years, and continue to expand its influence around the world.

When Bill Newcom appeared to Microsoft as his first legal advisor in 1985, he made two important decisions. Since then, over the last 35 years, we have been instrumental in creating programs that have impacted the lives of millions and inspire thousands of employees. I am deeply involved in their community. The first was the creation of the Community Affairs Division as part of a legal group focused on the company’s charitable activities, and the second was the introduction of employees who would make a charitable match to all full-time employees in the United States. These two decisions were the moment that allowed many Microsoft employees not only to rejuvenate their generosity, but also to inspire them to create their own movement as a changemaker.

Community Affairs has two main responsibilities. It is the guidance of direct investment in the corporate community and the guidance of employee programs to encourage philanthropy. In terms of employee philanthropy, the first employee effort at United Way began in 1983 and was encouraged by Mary Gates, the mother of Bill Gates, who was deeply involved in United Way locally and across the country. She advised her son to start an employee salary deduction initiative. This allows employees to donate to United Way and deduct that donation from their salary every other month. In the first $ 1,000 match, this effort raised $ 17,000.

“In the early days, I think it was just perceived as employee benefits,” said Brad Smith, Microsoft’s president and chief legal officer. “And this was a time when companies weren’t trying to offer free meals to everyone in the cafeteria, free laundry services or anything else that they could generally buy for themselves. Matching gifts are something that people value and certainly did. “

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By the time I joined Microsoft as Head of Community Affairs in 2004, four important decisions were made that further stimulated the “good donation machine.” In 2002, Pamela Passman was appointed Vice President of General Affairs of the Legal and General Affairs Group.

She made three decisions. First, she convinced then-CEO Steve Ballmer that budgeting employees should be budgeted as employee benefits within human resources, not as part of a charitable budget. She argued that the philanthropic budget was constantly under pressure as the employee base grew and the popularity of employee donation campaigns increased. Making the donation program a personnel benefit allows you to free community affairs funding for ongoing community-based projects. More importantly, moving the budget within the Human Resources department ensures its permanence and is treated like the benefits of other employees. According to Pasman, “This was the fastest decision I’ve seen Steve make. At the highest level, leadership is committed to helping employees follow their passions. I showed that I was there. “

Also in 2002, the second decision was to stop processing employee donations through the United Way. In the late 1990s, employees were able to donate to 501 (c) (3) qualified nonprofits based in the United States, but the money was processed by United Way and employees paid pass-through fees. .. Employees expected that the entire donation would be sent directly to the nonprofit of choice and would not have to pay this fee. This decision meant that Microsoft had begun to collect processing fees. The company increased its financial participation in donation programs and increased employee confidence that donations had the greatest impact.

The third major decision was to extend the employee’s match to a year-round match. This meant that employees didn’t have to wait for donations until October and didn’t have to match donations. Employees can now plan donations based on their financial cycle to meet the needs of supporting nonprofits. Instead of waiting for an emergency, employees wanted to respond and send the match immediately.

Bill Gates increased employee matches from $ 10,000 to $ 12,000 in a 1997 memo that launched the employee donation campaign that year. It was raised to $ 15,000 in 2013 and is now at that level.

The employee donation program is also successful. The reason is as follows.

1. The program continuously evolves according to where the employee wants to go, creating opportunities for the employee to grow. Providing employees with time, talent and the opportunity to spend their treasures is very important. Several elements have been introduced. Opportunity for employees to serve on a non-profit board and train how to serve effectively. An online tool that makes it easy for employees to discover volunteer opportunities. And micro volunteer program. All of these have come a long way in building the culture of their purpose.

2. A powerful operational system has been created that secures the flow of funds for employees and distributes them in small quantities to thousands of nonprofits around the world. Given the regulations and laws of many national and local governments, it is not easy to move money this way. These laws have also changed and require strict compliance policies. In addition, operational programs have evolved to serve employees in the most effective way, switch match processing and billing to employees to Microsoft, handle fees and external vendors as the program grows. I paid for the cost of moving to. And finally, move to another vendor that can offer the best technology to meet your current needs. These moves are very difficult because they need to be carried out unimpeded by the contributions of employees and the match.

3. The message of the program has evolved over the years. What started as a fun competition between different groups and departments has evolved into a very competitive endeavor. Employees felt encouraged to participate because the group wanted to get the highest participation rate or the most funding. Ultimately, the competitive side of the program was dialed back due to receiving some negative feedback, and new incentives such as the Dollar for Do Program were added to keep the program growing. I did.

4. Program offerings are continually evolving to meet changing employee needs. Rather than focusing on just one month of donations, more micro-volunteer opportunities and Hack for Good were added throughout the year. The continuous evolution of the program is critical to the continued success of such efforts.

Inspired by Mary Gates and officially launched by Bill Newcom, the moment turns into a growing movement that inspires employees and offers a unique opportunity to find purpose both inside and outside the job. In doing so, the movement affected the well-being of thousands of nonprofits and changed the lives of millions of individuals around the world.

“Donations at Microsoft are like getting up in the morning and drinking coffee,” says Nadella. “It’s a habit formation and I’ve never seen anything like this. Donation campaigns allow me to mark my year at Microsoft.”

“Purpose: How Microsoft Encourages Employees and Graduates to Change the World” Published as the first release from Harper Collins Leadership by Akhtar Badshah In a broader publishing relationship With Microsoft Alumni Network..

Book Excerpt: How Microsoft Uses Employee Donations to Build a Culture of Goal

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