The Many Business Benefits of Giving Back to the Community

As we hit the holiday season — and the peak for charitable giving — here’s a look at how to get the most out of your business’s generosity

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Nearly one-third of all donations are made during the month of December. It’s called year-end giving, and for many non-profits it accounts for nearly half their annual income. It would be nice to think that it is the holiday spirit that drives us to give, but with 12 percent of that happening in the last three days of the year, it seems awfully likely that tax burdens might be a driving force.

The truth is that there are many reasons to give, beyond the tax benefits. Regardless of how you give, there is typically more to it than altruism. Just like any other financial decision, giving strategically can have residual benefits and provide returns.

Even if you don’t get a traditional return on investment, it’s certainly a better use of the funds than taxes (sorry, Uncle Sam). Here are three reasons why your company should plan for giving back, that aren’t just about taxes:

  1. It’s a great way to build awareness and trust in your community.
    Giving takes on a lot of forms for a business. One of those is sponsorships, which typically are for very specific events or items and they come with recognition. Think of it as an advertising budget with a cause. Whether it is a fun run, a ballet, or your kid’s soccer team, sponsorships create a ton of goodwill in your community.
  2. It’s a morale booster.
    You may be surprised how much your employees enjoy and appreciate the company giving back. For maximum impact, allow your team to have a say in where the giving budget goes. Knowing that you are making a financial impact in areas that mean something to them is a signal that you actually care about them as human beings. When possible, allow employees to attend events and represent the company at related functions. They will never be so proud to wear your logo.
  3. It will get you invited to the table.
    Showing continued support for organizations is a sure-fire way to get invited to sit on a committee or a board of directors. If you can carve out the time, having a seat at these tables is a fantastic way to meet influencers in your community. Several of our best customers, vendors, and brand advocates came from relationships developed in a board room.

Just because your company is cash strapped doesn’t mean that you can’t help or gain the rewards of being charitable. As corporations and small businesses, we can give in different ways and we each have our own set of unique benefits and opportunities.

Here are four different ways your company can help a non-profit:

  1. Cash Donations
    Every organization needs cash resources to function. Small businesses know that all too well. When you have it to give, often a cash donation is the best way to make an immediate impact. A true donation is given without any sort of benefit back to the company, allowing it to be tax deductible.
  2. Sponsorships
    Much like a cash donation, you are often writing a check. In return though, you typically get an advertising benefit. Any “donation” you make that comes with recognition for your company might technically fall under this umbrella for tax purposes. Check with your accountant to see if it’s a donation or an advertising expense, but either way it’s tax deductible.
  3. Service Donations/Skills Giving
    When you work in a service industry like plumbing, our skills have value. Those skills can be donated as an in-kind donation. This can be anything from a grant for plumbing services for a low-income family to “donating” a repair or installation to a non-profit directly. The tax benefit for these kinds of donations are minimal, but they tend to be excellent press opportunities.
  4. Employee Volunteer Hours
    Aside from money, most non-profits thrive on volunteers. Giving your employees the time to volunteer on the clock is an excellent way to give back and keep employees engaged. It also gives team members the opportunity to get involved with their community and become an ambassador for your company.

The vast majority of donations are given without any research. There is nothing wrong with giving to your pet project, but think about those residual benefits. Finding the right place to give can be influenced by several factors. Here are a few things to consider when deciding about exactly where you want to spend your giving dollars:

  • Go Hyper-Local
    If the majority of your work happens within a single municipality or tight geographic region, making a difference in people you do business with every day can be very impactful. Keeping your money local when giving is a great way to spread the message that you believe in supporting local businesses and organizations. Hopefully that comes back threefold.
  • It’s About the Cause
    Giving to a cause that aligns with your company mission sends the message that you’re deeply committed. For instance, a service contractor focused on residential might give to a housing organization. Or maybe you want to make a global impact and give to a clean water initiative in underdeveloped countries.
  • What’s Important to Your Employees
    If your employees or their families have been touched by illness or misfortune, one way to show you care is by aligning your giving with their passions. Finding an organization that supports the things that have most affected their lives is certainly a valid approach to giving. This can also create opportunities for great press coverage.
  • Is the Organization Right
    Using a resource like CharityNavigator.org is a great way to check and make sure that the non-profit you are supporting is worthy of your time and funds. The cause might be good, but the organization should be operated well too. A little research can also help avoid aligning yourself with a future scandal.

Of course, many times we give simply because we’re asked. An opportunity for a sponsorship or a donation request comes across our desk and we shrug our shoulders and write a check. It’s fine to be reactionary when the opportunity is right, but a little planning can go a long way toward building your brand, your employee retention, and easing your tax burden.

Last but not least, don’t forget that it feels good to give. While strategy, recognition, and employee retention are important and impactful, sometimes you just have to lead with your heart. When done well, giving should lead to that warm fuzzy feeling that you get when you do something that matters.

About the Author
Anja Smith is managing partner for All Clear Plumbing in Greenville, South Carolina. She can be reached at anja@acpupstate.com.



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