Putting some extra thought into selecting gifts for employees and clients can be a smart strategy that doesn’t have to cost a fortune, Workforce reports. Firms already shell out more than $100 billion in gifts annually and many times those gifts are expensive and fail to generate any holiday cheer.

One startup, Alyce, uses artificial intelligence (AI) to help firms hone in their gift giving strategies. The corporate gift giving service emphasizes personalizing gift giving for both a firm’s employees and its clients. “…You can just tell that employees are happier when they get something that they are actually going to use and are actually going to want…,” says Alyce CEO Greg Segall.

The firm’s AI-driven system taps into a database with more than 30,000 gift possibilities, Small Business Trends reports. It then reviews social data for intended recipients as well as the firm’s business goals and aligns both to create a personalized gift. Recipients get notified of the gift and can then choose to keep it, pick another gift or make a monetary donation to charity based on the value of the gift.

“There is just an incredible amount of time, money and energy spent in sending corporate gifts, with very little visibility into how to send a gift that someone actually wants, let alone how to measure the impact of sending the gift itself,” Segall tells Small Business Trends.

Zenefits, an HR software company, recommends companies not spend more than $25 per employee on gifts and to not play favorites, Workforce reports.

Halo Recognition, a New York-based firm that helps companies with strategies to recognize and reward their employees, suggests not doing anything “too extravagant,” says CEO Cord Himselstein. “I think that you should bring something for everyone and I think that you should get them something you know that they want or like. “I don’t think you want to be generic and get the same thing for everyone.”

While many employees would appreciate gifts from their bosses, a growing number would rather see their companies focus on philanthropic giving, Bloomberg BNA reports. This year, 87% of companies “understand there is an expectation to support causes and issues that are important to employees,” America’s Charities notes in its snapshot of workplace philanthropy. Charity giving programs amount to more than $4 billion in donations annually, and employees average five times more in donations compared to traditional individual donors, America’s Charities finds.

Randstad U.S. in a recent survey found that 75% of employees say it is important for their company to be involved in charitable initiatives. That is far higher than 11% and 9% of employees who rate cookie sharing and gift exchanges, respectively, as their top workplace holiday traditions. Companies should survey their employees to learn what makes them most passionate, says Jim Link, chief human resources officer for Randstad North America.

“There will always be more engagement for causes in which employees feel personally invested,” Link tells Bloomberg BNA. Even better is for companies to work with charities that are somehow connected to their business or services, Link notes.

“There’s no one-size-fits-all for how employees want to volunteer,” says James Starr, president and CEO of America’s Charities. Any program should be well-conceived with a clear mission and inform employees of the impact they are having from their participation, he notes.

But employers also need to be aware of potential problems, says Jason Branciforte, a shareholder with Washington, D.C.-based Littler Mendelson. For one, employers should steer clear of backing a charity that could give rise to charges of bias if that group limits its support to a certain class of employees. Employers also need to ensure their workers understand that their participation is not mandatory so as to avoid employees feeling pressured to support a charity that they do not back. The most important criteria for employers is to keep their programs voluntary and flexible, Branciforte says.