Rationale for Payroll Deduction
- It provides a virtual guarantee for a perpetual PAC income.
- It is the most cost-effective method of conducting solicitations. Solicitation efforts can be relaxed once a payroll deduction plan is in place.
- If deductions are calculated as a percentage of salary, contributions increase as salaries increase. This allows PAC income to increase without costly and time intensive solicitation efforts.
- It is a self-sustaining system that insulates the PAC from economic and company problems and guarantees income even during difficult off-election years.
- It allows a PAC to anticipate its income, thus allowing for a more sophisticated disbursement strategy.
- It allows expensive and time consuming solicitation efforts to be conducted less often and for resources to be redirected into communications and membership retention.
Benefits to Employees
- It makes it easier and more convenient for employees to participate in the PAC.
- Employees are familiar and comfortable with the payroll deduction process.
- It lessens the likelihood of annoyingly frequent solicitations.
- It prevents employees from having to decide whether or not to contribute from year to year.
- PAC participants are likely to receive more frequent communications from the PAC manager who can focus on membership retention and disbursement of contributions, rather than on solicitations.
Benefits of % Salary vs. Fixed Dollar Amounts
- You are guaranteed a consistent stream of PAC income through payroll deduction
- Once you enroll someone in this system, you do not need to ‘re-ask’ the following year. They are enrolled until they notify you otherwise.
- A % of salary appears more equitable for an incentive club – ie. it’s an equal ‘hit’ for all salary levels.
- When someone receives a pay raise, their contribution to the PAC is subsequently raised. Their raise equates a raise to the PAC.
- This system can eliminate the confusion of offering many giving options, based on salary bands. This simplifies the enrollment forms and options.
- To minimize confusion, you can also offer a sample chart with 4 or 5 salary levels, and what the corresponding monthly or pay-period contribution would look like.
- As a benchmark, most organizations use 1/2% for a suggested sustaining level of giving and 1% as the incentive club (high-dollar donor) level.