Many small business owners receive daily solicitations for donations. There are walks to raise money to eradicate diseases, charity balls and other elegant events that support a cause or a group in need. The holiday season is a special time when local, regional, and even international charitable organizations launch fundraising campaigns directed at small business, to support their efforts throughout the year.

Your Company Doesn’t Have to Be Rich to Be Charitable

Many of us think of business donors as highly profitable companies that donate to a variety of causes. However, your small business doesn’t necessarily need lots of money in the bank in order to make an impact.

Small financial donations can add up quickly, so even a $10 gift to your favorite business charity helps when added to 1,000 other $10 donations. Give what you can to help others, even if it’s a small amount of cash.

If cash is really tight – not unusual in our ever-changing economy – donate your company’s time, which can be just as valuable as a cash donation. Charitable organizations often rely on volunteers to keep administrative costs to a minimum. Contact local charities to see if there are ways you can donate other than with cash. For example, the local food bank may welcome volunteer time. Consider getting the entire company involved by extending the invitation to your employees.

Further, encourage employees to donate time to help organize a fundraising event. Your staff can participate for weeks in advance, or just staff the sign-in table on the day of the event. In either case, your company is engaged in local fundraising, and that’s good for the community, your employees, and your business.

Even the smallest business can make a big contribution.  For example, a marketing design company with two employees can design promotional material for local fundraisers at no charge, saving the charitable organization money on design costs – money that can then be put to other important uses.

Your business can also serve as a collection center for employees or customers who want to donate items of clothing to the local charity-based thrift store, canned goods to the local food bank, toys, and other needed items.

Choosing a Business Charity

With so many solicitations from so many worthy organizations, how does a business choose the best charity? Here are some tips to help make charitable giving a rewarding experience for you, your employees, and your company’s reputation.

Choose a charity that promotes the beliefs and interests of your business.  What’s important to your business? If your company manufactures solar panels, your company may have an interest in improving the environment and the bottom line.  In this case, pick an organization that supports a better environment for future generations.

Consider asking employees for suggestions on what they consider important.  Helping children? Improving education? Whatever your business and employee interests, chances are there’s a charitable organization that wants to hear from you.

Do you want to donate locally, nationally, or globally? Your business donation to a local charity may have a more recognizable impact. For example, by sponsoring a local sports team, your business’ name may appear on the team’s uniforms, providing reminders to fans that your company is engaged in the community.

However, your business may employ a number of armed services veterans who would appreciate a company donation to honor those who serve. This donation may be made to a national veterans group – one chosen by your employees.  The vets who know the company has made a contribution to a veteran’s service organization will appreciate your business’ concern and attention.

Verify the activities of any charitable organization your business considers. Sadly, some charitable organizations use donations inefficiently and ineffectively. Numerous Internet resources can provide facts and figures on where donations to specific charities go – the percentage of donations that actually deliver goods or services to those in need. Use these online resources to locate charities that commit the highest percentages to helping others, and the lowest percentages to salaries, fundraising expenses, administration costs, and other business activities of a not-for-profit organization.  

You might also want to check the charity’s status as a not-for-profit (NFP) organization. NFPs must register with the IRS, and meet reporting standards to qualify as a not-for-profit organization.

Read the organization’s mission. Some charities may sound worthwhile in the solicitations mailed to your office, but read the organization’s mission to determine:

  • The organization’s stated objectives
  • Who receives benefits from the organization
  • A list of programs sponsored by the organization
  • The service area of the charity
  • Measurements of the organization’s success, e.g., a new school built in an impoverished area, or the construction of a new wing of the local hospital
  • The charity’s future plans

What charities should you avoid? Sadly, some so-called charitable organizations are little more than scams.

Avoid charities that:

  • Don’t provide detailed information about their activities
  • Won’t provide you with financial information;
  • Won’t provide IRS documentation
  • Employ high-pressure tactics

If you have any uncertainty about the legitimacy of an NFP, look for another agency that serves the needs of the same group your company supports.

Look over the solicitations you receive in the mail, and do your research, before sending a donation in your company’s name. Pick up the phone or log on to your computer. Someone out there could use your company’s help.

 

 

The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice.