BLOOMINGTON – In a surprising move that has implications for not-for-profit organizations in central Illinois, State Farm is cutting back on its charitable giving in at least one area. The company website notes retirees will no longer be eligible for the company’s charitable matching gift program, effective with the new year.
The Bloomington-based insurer will continue to accept requests for donations completed this year, until the end of January 2023. Later donations won’t be eligible for a match.
“This will definitely affect the amount of money that is received for all these wonderful nonprofits and the things that they do. I was sad to learn that news,” said Norris Porter, development director for the McLean County Museum of History.
State Farm isn’t saying much about its decision.
“We are communicating directly with our associates and retirees and have nothing additional to share,” spokesperson Gina Morss-Fischer said in an email statement.
State Farm will still match gifts from current employees. There are about 14,000 of them in and near Bloomington-Normal. Still, Porter said, retirees are significant beyond their numbers.
“A lot of times, they have more financial resources at that point in their lives. And so they make bigger gifts and bigger matches and so it’s going to be a real impact on local nonprofits,” said Porter.
Pat Vickerman, Illinois State University’s vice president for university advancement, said not every big company matches retiree gifts. Some do. Some don’t.
“With each company, they have their own set of policies and procedures whether they match retiree gifts at certain amounts, or certain areas that they’ll match as well,” said Vickerman.
A nonprofit scholar and author said State Farm is generally among the most philanthropic of companies nationwide. Doug White has written multiple books on corporate giving and advises charities.
“State Farm is a good example of a company with the kind of public purpose and corporate philanthropy ethos. I was surprised to see that, let me put it that way. I don’t think that’s normal. I don’t know why they would do that, although I suspect it has something to do with, you know, their own budget,” said White.
He said the move also comes at an odd time, following the worst of the pandemic.
Right now, White said businesses are trying to return to normal. And when there is a worker shortage, White said matching gift programs are popular because many workers respond to social causes.
“This does personalize the process and engages the employee more. And at a time right now, when corporations are finding it difficult to retain employees for the long haul, then their effort to provide this benefit to the employee is crucial,” said White.
Some analysts said the nationwide workforce shortage is particularly grave in the insurance sector.
Of course, the employee engagement that matching gift programs foster is apt for current workers, but not necessarily for former workers. Admittedly, White thinks a matching gift program for retirees is relatively rare among big businesses. On the flip side, he said retirees have historically mattered to the company, too.
“Retirees are and were, and State Farm has always acknowledged this, an important part of their growth as a company and also an important part of the community that they are in when they retire. So, to stop that is, well, I won’t say it’s so much surprising, more disappointing, but I get it,” said White.
State Farm’s policies on philanthropy have historically focused on safety, community development and education. Company documents say State Farm “helps maintain the vibrancy of our communities by assisting nonprofits that support community revitalization. The program matches retiree gifts to qualified nonprofit organizations, public and private K-12 schools, and two- and four-year U.S. colleges and universities. Matchable gifts can range from $25 to $4,500 per calendar year.”
That upper dollar value limit just went up some in June, according to company web pages. White said those articulated values fit State Farm and follow rationales other companies use to direct charitable giving.
“In many cases, it’s based on what they’re doing from a from a corporate perspective,” he said.
Those values and the bump-up in donation limit make the decision to stop matching retiree donations puzzling.
Vickerman said corporate matching gift programs have totaled between $400,000 and $600,000 in each of the last several years for ISU, though not all of that is from State Farm.
“They’re certainly a significant portion of our annual matching gift program that comes in, certainly one of our largest matching gift programs,” said Vickerman.
Vickerman said matching programs are a relatively small share of total ISU fundraising and gifting. He estimated the impact of the end of the State Farm matching gift program will be less than 10% of total philanthropic dollars that come to ISU each year.
Smaller not-for-profit institutions may feel the loss more keenly, as will those in Bloomington-Normal, where there is a large concentration of company retirees.
“So many donors that nonprofits have in that community are employees or retirees from State Farm,” said Porter of the history museum.
Those organizations aren’t writing off State Farm, though. Porter hopes the end of retiree matching is just a shift in strategy.
“They’ve been so wonderful over the years in terms of investing in nonprofits all over the country that I can’t imagine that’s going to change. They might have different ideas, or a different focus … I’m interested to hear what that might be,” said Porter.
Other local agencies voiced an appreciation for their relationship with State Farm.
“We appreciate our good working relationship with State Farm and expect it to continue,” said a Salvation Army statement.
“We have always appreciated the donations received from State Farm and its current and retired employees and we look forward to continuing to be a focus of their generosity,” said a statement from Carle Foundation.
And Vickerman said matches are very nice, but the university also looks for the programs State Farm wants to support as an institution — things like cyber security and the College of Business. Those, he said, are the discussions ISU has with the State Farm Foundation.
The climate of giving is actually pretty good for nonprofits right now. Vickerman, Porter, and White said donations have risen slightly the last two years.
Inflation and a potential recession make the outlook less certain.