Want to Donate to a Good Cause? Try Using Your Insurance

As people look for ways to donate in today’s climate without overextending their financial resources, many are getting creative and turning to providers they already use. Numerous providers partner with charities, organizations and initiatives as part of their corporate social responsibility commitment. Whether it’s through companies providing home, life or auto insurance, for instance, it’s an indirect way of using your dollars to help the community and those in challenging circumstances.

Americans long to help those in need. As a nation, we voluntarily donate seven times more than continental Europeans. Statistics show that 60% of U.S. households donate in a given year, with average contributions adding up to between $2,000 and $3,000.

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      The process of choosing which causes and charities are most important to you is very personal, as is determining the best way to show your support. Trading time for money through hands-on help has typically been a solution for households where direct monetary contributions don’t fit the budget.

      But social distancing is changing the rules of the game and making this system both challenging and ill-advised. By signing up with insurance providers who match your values and give to causes you support, you can make a lasting impact without adding to your expenses or compromising your health. Some insurance companies even provide ways for you to contribute to charities directly.

      Have a direct impact through your provider

      New, innovative insurance companies like Lemonade, a home and renters insurance company, are shaking up traditional business models by having a portion of your unclaimed benefits go straight to a charity of your liking.

      Lemonade sets itself up as a Public Benefit Corporation and is a Certified B Corporation. This business structure is different from a nonprofit because it has shareholders and aims to make a profit. Still, it commits as a company to create a positive social and environmental impact.

      In Lemonade’s case, it starts with taking a flat fee for services. The company then holds on to the rest of the money to pay for claims. Every year, the company adds up the unclaimed money from you and others who chose the same charity when signing up for a policy. Lemonade then gives up to 40% of that amount to that charity. In 2019 alone, $631,540 was donated to 26 charities through Lemonade’s Giveback Program.

      Assurity Insurance is another Certified B Corp making an impact. In 2019, the company partnered with NeighborWorks Lincoln, a local nonprofit, to build 14 homes for moderate- to low-income families in the Antelope Valley community in Lincoln, Nebraska.

      You can also use your life insurance to contribute directly to charity in various ways, such as:

      • Listing a charity as a beneficiary. Instead of leaving money to family or other heirs, you can name a charity as the recipient of some or all of your death benefit. Unlike citing a charity in your will, this is a private transaction that others don’t have to know about if you don’t want them to. In case you later change your mind, you can list charities as a revocable beneficiary to make it easy to change policy terms or who receives death benefits.
      • Adding a charitable giving rider. Newer life insurance policies may have the option of a charitable giving rider for policies with face values above $1 million, with 1% to 2% going to a qualified charity you designate.
      • Gifting a life insurance policy. You can buy a new insurance policy for your favorite charity or gift one you no longer need. You do this by naming the charity as the policy owner and beneficiary, transferring full ownership. If there are still premiums left on the policy, you can pay them through gifts to the organization.
      • Donating policy dividends. Some whole life insurance policies pay dividends to policyholders based on the insurance company’s financial performance. Although these sums amount to less of a benefit than the above strategies, it’s an excellent way to give back to a nonprofit you believe in without adding to your expenses.

      Choose an insurance provider that matches your values

      A few insurance providers will have programs in place, allowing you to contribute part of your payments to them to a charity. But many more enable you to have an indirect impact through their partnering efforts with various causes and nonprofits.

      A 2020 McKinsey and Company report found the insurance industry’s charitable giving was between $560 to $600 million annually between 2015 to 2019. Doing business with these providers is a vote for the nonprofit organizations and social missions they support. Learning more about where an insurance provider contributes can help you decide whether the company’s values match your own before purchasing insurance.

      Here are some top insurance companies and causes they support to help get your search started.

      Aflac Insurance: Supports and comforts children with cancer by raising awareness and donations for childhood cancer research programs and donating to the Aflac Cancer and Blood Disorders Center of Children’s Healthcare of Atlanta — voted one of 2020-21’s “Best Children’s Hospitals” for cancer. Many of Aflac’s independent sales agents and employees contribute directly from their paychecks.

      Allstate Insurance: Donates to various causes and has a program that empowers youth and works to end domestic violence, transform communities and develop nonprofit leaders. Some nonprofits it supports are WE Charity and Facing History and Ourselves. Through the Allstate Foundation Helping Hands Grants and Allstate Foundation Emergency Response Fund, the company contributed $7.5 million to community initiatives in 2018. More recently, Allstate donated $5 million to domestic violence victims, youth in need and first responders and local communities.
      Chubb: Gave $10 million globally toward pandemic relief efforts, partnering with nonprofits around the world, including The Global FoodBanking Network, Feeding America, Robin Hood and Project HOPE. It also donated 100,000 masks for health care workers in NYC and Toronto.

      Farmers Insurance: Donated $21.3 million toward charitable causes over the last five years. It has strategically aligned itself with four national nonprofits: Operation BBQ Relief, National First Responders Fund, SPB and Team Rubicon. Farmers also contributed $500,000 to the Trusted Choice COVID-19 Relief Fund.

      Guardian Life: Has community partnerships to provide donated dental services, workforce readiness programs and free for-credit personal finance courses at 14 community colleges. It also committed $500,000 in COVID-19 relief to support Feeding America and local charities where Guardian has offices.

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      GEICO: Has raised over $3.4 million for the Children’s National Hospital in Washington, D.C., to help the hospital provide expert care and healing programs and conduct research studies.

      MassMutual: Strives to build thriving communities and directs two proprietary national programs: FutureSmart, which provides financial education in schools as a form of economic empowerment and LifeBridge, which helps parents fund their child’s education through free term life policies. These programs are part of the company’s LifeMutualProject, a foundation-led initiative seeking to develop empowered neighborhoods.

      Mercury Insurance: Joined with the California Medical Association to launch Care 4 Caregivers Now, a unique program providing mental and emotional wellness coaching and support to frontline health care workers during the COVID-19 pandemic. Mercury donated $150,000 to fund the program.

      Nationwide: Has donated over $498 million since 2000, including $50 million to the Nationwide Children’s Hospital and $60 million in grants to the Nationwide Foundation Pediatric Innovation Fund. It also supported pandemic response efforts by contributing $5 million to local and national charities like the American Red Cross, Feeding America and United Way, as well as giving medical supplies to hospitals.

      New York Life: Has contributed $300 million to charitable causes since its founding, and focuses its giving on bereavement support, middle school transitions and supporting charities their employees and agents are passionate about.

      Northwestern Mutual: Has contributed over $25 million toward its primary charitable focus, childhood cancer, through its National Childhood Cancer Program. It also offers two scholarships annually for children and siblings affected by childhood cancer. Northwestern Mutual is committed to bettering Milwaukee and Southeast Wisconsin neighborhoods and has donated hundreds of thousands to programs like Teach For America and Schools That Can Milwaukee.

      State Farm: Funds national scholarship programs like the National Merit Scholarship Corporation and has a matching gift program for State Farm associates giving to qualifying post-secondary schools and charitable organizations.

      Travelers: Pledged $5 million toward COVID-19 relief efforts to help families in North America, the United Kingdom and the Republic of Ireland, with much of the money going toward charities meeting urgent and unmet needs. It also repurposed their Hartford, CT kitchen facilities to help nonprofits prepare and deliver meals and is working with a Minnesota food bank to meet the needs of the area.

      USAA: Has invested over $10.7 million to military-focused nonprofit organizations across the nation during COVID-19. USAA is also providing meals and financial help to military families struggling because of the pandemic and funding research to fight COVID-19.

      Wells Fargo: Is committing $1 billion over the next six years to address U.S. housing challenges. In 2020, Wells Fargo implemented a $20 million Housing Affordability Breakthrough Innovation Challenge to bring new housing affordability ideas. It’s also donating $175 million in COVID-19 relief efforts to the most vulnerable areas.

      There’s always a way to contribute to the greater good

      Whether you want to increase your charitable contributions or start giving as the global pandemic sheds additional light on vulnerable communities throughout the U.S., you can do so even on the tightest of budgets.

      Whether you’re reviewing your existing providers or shopping for new ones, it’s worth noting how each company gives back to the community, and how their philanthropic commitments align with your values.

      For example, corporate giants like Wells Fargo, which provides homeowners and flood insurance, are pledging $1 billion over the next few years for economic opportunity initiatives. Various other insurance companies target their giving to categories of causes, such as childhood cancer, which you can support simply by being a customer.

      There are also creative insurance companies like Lemonade, which allow you to contribute directly to a charity of your choice with a percentage of your unclaimed premiums. And if you’re looking to get life insurance, the impact of your dollars can be two-fold: once by investing in a life insurance company with a charitable giving commitment, and then again by donating part or all of your death benefit to a qualifying charity.

      In the end, every penny counts

      These are often overlooked opportunities to combine a service you need with supporting causes you believe in. If you’re looking for ways to multiply your charitable impact, consider researching where your home, life or auto insurance company invests their profits and resources.

      You may be pleasantly surprised that the dollars you’re spending are already doing a lot of social good. If not, there are many other companies you can do business with that are committed to using their financial and human resources to strengthen communities, end injustices and fulfill emotional, physical and psychological needs in populations needing it the most.

      We welcome your feedback on this article. Contact us at inquiries@thesimpledollar.com with comments or questions.

      Lorraine Roberte

      Contributing Writer

      Lorraine is a south Florida-based personal finance and digital marketing freelance writer who drafts content for businesses and startups that gets attention on social media and visibility on search engines. She has published on prestigious sites such as Thrive Global, Elephant Journal, Red Tricycle and Tweak Your Biz. When she’s not creating content or running her business, you can find her either lounging at the beach with a good book or trying to learn a new language.

      Reviewed by

      • Andrea Perez
        Andrea Perez
        Personal Finance Editor

        Andrea Perez is an editor at The Simple Dollar who leads our news and opinion coverage. She specializes in financial policy, banking, and investing.