How to Fund Your ERG

Employee Resource Groups are employee-led voluntary community groups that contribute to the diversity and inclusion of your organization. One of the primary steps in starting and running a successful ERG is securing funding. ERG funding varies from organization to organization and sometimes, from ERG to ERG within an organization. In this blog, we will discuss the funding practices of ERGs and how you can fund your own employee resource group to support employee communities in your organization. 

What is a typical budget for Employee Resource Groups?

The average annual budget for resource groups varies a lot based on company size and ERG activity. Research shows that ERG budgets can go up to as much as $75,000 - $100,000 annually. However, this number might not be the final metric for your own ERG. Several organizations allocate a central diversity fund that gets equally split into different ERG budgets; whereas other organizations require ERGs to submit separate ERG budget requests that are evaluated based on their contributions to broader DEI initiatives and other business objectives such as retention, talent acquisition, etc. 

What are the sources for ERG funding?

As discussed above, DEI funds and centrally allocated ERG budget are some sources of funding for your ERG. However, some organizations do not have budget allocations for ERGs at all. ERGs at these organizations function on sponsorships from executive sponsors. Employee Resource Groups have also been known to fund themselves through individuals and groups of members, and crowdfunding. Additionally, funds can be raised from other departments like HR, marketing, and communications by aligning ERG goals to outcomes that contribute to those departments. 

How are ERGs evaluated for funding?

To raise funding for your ERG, you must ensure that the ERG's goals align with the organization’s broader business initiatives and DEI goals. These goals and objectives must be measurable and reportable. Transparency in reporting ensures that possible funding channels can see the progress and impact of your initiatives on their own goals and objectives.

When raising appeals for funding, lead with measurable impact like employee retention, recruitment numbers, promotion, and upward mobility of employees from the resource group, etc. It is also a good practice to report impact numbers that contribute to the KPIs of other departments like sales, marketing, customer success, etc.

Related: 5 Key Metrics to Measure Your ERG’s Success

What are the benefits of executive sponsorship?

One of the primary funding channels for Employee Resource Groups is executive sponsorship. There are several ways in which an executive sponsor can aid your employee resource group. They can -

• Provide funds to run ERG activities and initiatives.
• Promote ERG activities and drive membership. 
• Navigate networking with leadership and other important stakeholders in the organization. 
• Build and maintain alliances with other ERGs and stakeholders.
• Provide access to opportunities. 
• Act as an advisory body.

How to secure executive sponsorship?

Once you have decided to secure executive sponsorship for your ERG: 

Step 1: Identify sponsors 

Evaluate your organization’s executive leadership to identify leaders that can act as sponsors for your ERG. You need to find members that have a vested interest in your employee resource group. This could be a leader that belongs to the same affinity group or has done previous work to support the group or just someone whose business initiatives align with your ERG goals. 

Step 2: Make a pitch

Once your resource group has identified suitable executive sponsorship prospect(s), it's time to make your pitch. Leaders are eager to accommodate time and resources for an ERG that presents a strong business case and clearly defined objectives. Here are some pointers to make an impactful funding pitch, your presentation should include the following: 

• The purpose of your ERG with goals, objectives, and mission statements 
• Quantitative and Qualitative data based on your employee experience survey 
• External research and data to support the need for equity in the workplace 
• Inputs about employee interest in the resource group 
• A proposed plan for the functioning of the ERG and upcoming events and activities 
• A proposed budget based on the data above 

Step 3: Close the deal 

When you receive interest from a leader, make the process quick and effortless for them. Go prepared with the ideal outcomes you want from them - this could be an organization-wide email that they send out announcing the sponsorship event. To make the task even easier, provide them with an email draft to push the announcement.

In conclusion

Organizations have varied practices for ERG funding, and ERGs should choose the best source of funding for their group after careful consideration of all the avenues available within the organization. However, there are certain best practices like reporting, making a good pitch, aligning with broader CSR objectives, etc. that can help you secure funding for your ERG. We hope this was helpful. For more resources on ERGs, read ERG Best Practices.