According to a recent survey(1) of 1,400 small businesses conducted by a leading online lender, forty-six percent of small business owners who donate to charity say they commit to up to $1,000 in contributions. As a small business owner, perhaps you and your team have wondered whether supporting a local charity or athletic team would be advantageous.
When organizational generosity and social responsibility merge, great outcomes are possible for both the community and the business. Strong community partnerships are essential to many small businesses who rely on word-of-mouth referrals and local customers to bolster their reputation. In fact, there have been a multitude of studies and research on the links between corporate philanthropy and the financial impact on the companies themselves.
For the most part, charitable giving and financial sponsorship has proven benefits across the board for businesses and their recipients. As you plan your overall organizational and marketing strategy, it may be helpful to gain perspective on the different ways – and reasons – a business may choose to support their community.
This article will highlight the top four reasons to consider charitable giving and will help you analyze if it is the right choice for your small business.
Top Four Advantages to Corporate Giving
Encourage Employee Morale and Strengthen Good Citizenship
When charitable giving and community partnerships are made in conjunction with a team building program, a sense of pride and trust is established within a team. Staff members feel valued for their efforts, time, and skills, which ultimately translates to increased employee satisfaction. Providing time for a team to work together outside of the typical office environment can alleviate stress and create deeper connections.
On top of benefits seen inside of the business, such acts of giving have obvious and immediate results on the community at large. For many non-profit groups, extra hands and effort aren’t easy to come by, and even small donations can be significant to neighborhood organizations in need.
Increased Company Visibility and Brand
Forming viable partnerships with local non-profit agencies, businesses, or athletic teams can be a relatively efficient and cost-effective way to advertise your services.
A few easy ways to go about this include sponsoring sports uniforms or banners with your organization’s name or working together with your chamber of commerce to sponsor an event. Check into handing out complimentary items that have been branded with your logo for activities such as local marathons, farmer’s markets, and other activities.
One simple way to gain exposure is to wear matching company t-shirts when your team volunteers at charities or events. Get creative with ideas of how to mix your company’s culture with meaningful philanthropy.
Powerful Alliances Equals Powerful Reputation
Choose to participate with non-profit organizations that align with your company’s core values and mission. Such alliances provide opportunities to establish a new customer base or expand your company’s market. Never underestimate the power of a well-planned collaboration; you may even gain future employees.
Good deeds highlight the capabilities and good citizenship present in your employees and leaders and position your business in a place of prominence within your community. Charitable giving and well-organized partnerships also offers a strategic leg up on your competition.
Tax Deductions
While the lure of a tax deduction isn’t the primary reason for charitable giving, it certainly is a reasonable incentive for many small businesses. Contributing to registered nonprofit groups is generally cause for a tax break and can be an added bonus to your company’s plan for social responsibility. Check out the resources on the U.S. Small Business Administration website to get more information on how the tax laws may apply to your organization and to ensure you are in compliance with regulations.
Final Considerations
In summary, charitable giving can offer a number of substantial benefits to a small business and surrounding communities. However, it’s important to consider that executing a successful sponsorship or charitable giving plan requires time, effort, and expense. Most businesses choose to dedicate an entire team to creating such plans and the financial benefits may not always be seen immediately for a small business.
It should also be noted that a company must be selective in which organization they choose to be aligned with for such partnerships. Keep in mind that a nonprofit organization’s reputation and political affiliations may have an effect on your business as well. It’s wise to do your research when selecting what non-profit or local group your company will invest time and effort into supporting.
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(1) https://smallbiztrends.com/2016/12/small-business-donations.html