Businesses supporting charities has been the ‘cool’ thing to do for many years. If you don’t support a charity your business is the unpopular kid in the playground, some other businesses might not even want to play with you, despite them supporting anti-bullying campaigns. Aside from the obvious benefits to your community or the organisation you choose to support, there are reasons that supporting a charity is beneficial to your business.
Tax Deduction
Support a registered charity to get a charitable donation tax deduction. Donations that are generally tax-deductible include sponsorships of charities or events, donations of inventory or services and cash donations.
Depending on your local tax law, you might be able to claim your charitable contributions and some volunteering expenses as charitable contribution deductions on your income taxes. If you itemize your deductions, you can claim the cost of the fuel used to travel and from volunteer work, as well as the cost of materials purchased for volunteer projects. You can also get a tax deduction for the monetary value of charitable donations — whether it’s cash, stock or even used vehicles. However, this all depends on the tax law in your jurisdiction.
Many small businesses make charitable giving part of their overall business model, such as promoting that a certain percentage of the sales of certain products are donated to charities that they support. This helps boost sales as people feel a human connection with the brand when purchasing a product if it is for a cause they support.
Free Publicity
If you sponsor or support a charity, you are often given mentions or even brand advertising space as a thank you for your donation. This type of marketing should form part of your overall marketing strategy and the cost of donations factored into the marketing budget.
While it is harder to control the message because your business is a supporter of the charity and not the voice, it is an effective way to have your brand seen by people who could bring value to your business, such as other sponsors. For B2Bs, it could be a way to generate new leads or networking with clients that have been difficult to connect with. If Jen from the organic dog food company sees that you support the same animal welfare charity that her business does, she might be influenced to consider your email about the great new industry sources you have for her puppy chow.
Keep Your Staff Happy
In a 2007 survey, 68{21dc2fe1b43c4cf57a2e25a56b286f09fbb32a45ddf34dcf04be366972dd7b06} of people aged 18-26 said that the option to do charity work as part of their weekly benefits influenced them to accept a job offer. More than 10 years on, those same people are now the industry leaders, the people who are managing teams or running corporations. Ensuring that you have a charity or a way for your staff to feel that they can offer their time or resources, means that you are appealing to your high-level staff who have the skills and experience to support your business.
If digging veggies in a community garden for two hours a week on a Tuesday afternoon makes Sam from HR happy, then it is worth considering if Sam is also your dedicated, talented and hardworking HR manager who knows all the legal details of everything in your company and also remembers to order a cake for Lee’s birthday next week. Being flexible with staff who are more valuable than their salary is an important asset to any business, and of your staff want to donate their time while singing the praises of your company, they are likely to help attract the right attention for your business, such as leads and staff.
While the focus is getting you noticed and the other benefits that come with donating to, sponsoring or working with a charity can bring to your business, the reality is that you are helping the community. Be it putting new swings in a community playground or finding homes for kittens, the benefits that businesses can offer charities is more than what a single person can do. When your business sponsors a charity, your entire staff are also likely to back your choice or at least become aware of a cause.
Giving back to the community is a long-term cycle of benefit. When you help to improve the circumstances in the community you are working in, you are improving opportunities for others. Educating children, offering homeless people a place to eat, cleaning waste from waterways, or giving to medical researchers, the small steps we choose to take to improve the things in our society that we don’t like can make a big difference over time.
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