Donating to charitable causes is a great way to paint your company's image in a positive light and stay active in the community, which will not only make you feel good, but is also good for your business. People like to do business with companies that care about the community and/or other causes that are important to them.
Plenty of businesses understand this and do their part to give. According to the United States Small Business Administration, most small businesses make charitable donations, with surveys showing that 75 percent of small business owners donate some amount of their profits to charitable organizations each year: the average is about 6 percent.1 In Nevada State Bank’s 2017 Small Business Survey, more than 63 percent of respondents said they budget for charitable giving each year.2
Small businesses can especially benefit from charitable giving because they rely more upon their communities than larger businesses, which is why the public relations aspect of giving means a great deal. That brings us to our first tip.
You can give to charities all you want, and it's obviously a very positive thing, but you won't necessarily see the community support you're after if nobody knows that you're doing it. When it comes to personal donations, anonymity can be quite honorable, but as a business, it's simply wise to spread awareness about your involvement with charitable organizations.
You can think of it as a marketing tactic that helps others as well as helping your own business. In fact, spreading awareness may actually benefit the charitable organization as well by encouraging others to support the cause and donate.
Have Some Context
No charitable giving is a bad thing if your donations go to a worthy cause, but if you can donate in a way that has some context to your own business, customers may rally behind you even more. Context can be simply at the geographical level. In other words, support in your local area rather than nationally or internationally. Supporting any local organization is likely to inspire customer support – especially if that organization directly helps the community itself.
You can also aim for context in terms of what your business actually provides. For example, if you own a restaurant, the logical choice would be to donate to an organization that feeds the hungry in your community. If you sell pet products, support your local animal shelter. Look for an angle that make sense for your business. This isn't an absolute must, as finding such a fit won't be as easy for all business types, but if the angle is there, use it.
Donate More Than Money
Even a start-up business that’s pinching pennies can find ways to help its community. Perhaps a non-profit group would appreciate donations of your excess or expired inventory. Extra office supplies or craft materials could be given to a school. Consider giving your employees paid time off to volunteer at a local charity. If you’re short of cash but really want to help, look for ways to make it happen.
Look for Networking Opportunities
When you're involved with charities, you'll likely be invited to related events. You may even agree to organize and/or host them. These can be great for meeting and engaging with other business owners in the community and with philanthropic individuals and volunteers, which can lead to new relationships, opportunities, partnerships, and perhaps even customers/clients.
Don't Forget the Tax Deductions
Of course, you can get some tax breaks when you donate to charitable organizations, but you have to make sure you set things up correctly. Ask if the organization has a 501(c) (3) designation from the IRS. The IRS has a search tool you can use to look up any organization in question.3
Check Out the Charity
If you're going to be donating money to a charity, you want to be sure you support the work the organization is doing and have a good understanding of how your money is being put to use. For starters, have conversations with the appropriate people from the organization and ask questions. Online resources like Charity Navigator4 can help you check out an organization's rating, financial health, accountability, and transparency.
If you can afford to give, there's really no reason not to, because there are so many benefits – not only to the organization on the receiving end, but to the community and to your business. Find a charity you believe in and that your customers would be happy to see you support.
2. See complete results of the 2017 Survey and register to receive a copy of the upcoming 2018 Survey at NevadaSmallBusiness.com/survey.
The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice. Any views expressed in this article may not necessarily be those of Nevada State Bank, a division of ZB, N.A.