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A Refreshing Approach To Holiday Bonus Giving

By Erik Folgate

Check out this article from USA TODAY about a bank in Fargo, North Dakota that gave $1,000 holiday bonuses to employees.

This bonus was not like any other $1,000 Christmas bonus you might receive from your business. The bank put a stipulation on this bonus. You had to “pay it forward” to someone else. The concept is that you give someone $1,000, and they give it to someone else. Employees are not allowed to give the money to their family members or other employees, and they must document how they gave it away by videotaping it, or I’m assuming they must give the money back. At first glance I thought to myself, “I hope the employees knew about this beforehand”, because some people count on those bonuses to buy their family gifts. But, then I thought about how awesome it will be to watch all of those videos and see all of the creative ways that people came up with giving away $1,000.00. That excites me so much, and now I kind of wish my company had done that! That bank will be giving away $500,000 to people who will need it most, and that is what Christmas and the holidays are all about.

What would you do if you were given $1,000.00 to give away? Who would you give it to, and how would you do it? I’m going to think about my answer and post it later.

A reader, Robert, made a good point. The employees still received their normal 4.5% bonus, but this was on top of that.

Erik Folgate
Erik and his wife, Lindzee, live in Orlando, Florida with a baby boy on the way. Erik works as an account manager for a marketing company, and considers counseling friends, family and the readers of Money Crashers his personal ministry to others. Erik became passionate about personal finance and helping others make wise financial decisions after racking up over $20k in credit card and student loan debt within the first two years of college.

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  • http://expat.savagenet.com Robert

    The article mentions (waaay down at the bottom) they got their regular 4.5% bonus. This exercise was on top of that. Interesting idea.

  • ParatrooperJJ

    Hopefully the bank gave the money straight to the designated recipient and not to the workers, otherwise the workers will owe income tax on the $1000.

  • Minimum Wage

    Waaait a minute…

    The $1,000 bonus is taxable income to the employee receiving it. When the employee donates it to a QUALIFYING charitable organization, it becomes deductible ONLY if the employee itemizes deductions.

    Some of the employees – especially younger and/or newer employees who do not yet own homes – won’t be able to itemize, and therefore will wind up worse off when the $1,000 which they don’t get to keep is taxed.

    Who would accept a “bonus” that makes them worse off?

  • Minimum Wage

    Anything donated to an individual would not be deductible.

  • Lea

    not necessarily taxable income if they never had constructive receipt. It appears that the employees identify recipients, but the company transfers the money.

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