- November 15, 2017
- Posted by: Rivero, Gordimer & Company
- Category: Business Advice
The holidays always seem to encourage people to give back. This feeling is also true for companies. Small, medium and enterprise businesses can find ways to help others while keeping their company’s bottom line in mind.
Here are four strategies to help your company when making charitable donations.
Research the Charity First
Before you ever make a donation, it’s important to conduct additional research into the charity so you know exactly where your dollars are going. Whether it’s a local or national non-profit, you still need to do your due diligence.
You can utilize resources like CharityNavigator.org, CharityWatch.org, and Give.org to see if any complaints have been filed against the charity and if they are accredited. If you’re also wanting the benefits of tax deductions with your charitable donations, you will need to also research the organization to see if it qualifies.
Researching charities before you decide to donate is a smart practice. It’ll help you better understand exactly what the donation is going towards and also helps you make strategic business decisions about who you align yourself with.
Remember How it Impacts Your Reputation
Donating to a charity is a lot like establishing a business partnership; meaning it’s important to know the impact the relationship will have with your customers, employees, and other partners. It’s a good idea to make sure the charity’s goals and mission align with the morals and vision of your company.
If you’re planning to leverage the charitable partnerships for marketing purposes, then you certainly need to consider the ramifications of having your brand tied to that charity. Because you don’t have control of that organization, its actions will forever be linked to your company; good or bad.
If you operate a local business, it may be wise to find a charity that operates within your community. Roughly 90 percent of consumers say they view companies more favorably if they are involved in charitable work.
In other words, picking the right charity, one that directly impacts potential customers, can improve your brand’s reputation and drive more business.
Consider Non-Monetary Contributions
Businesses and employees are not always in a position to donate money to charities. Fortunately, there are other ways to contribute that don’t require writing a check.
Many nonprofits actually ask for people and organizations to donate goods like clothing, furniture, food, toys, or personal care items. Because many of these donations can be used items, your employees are more apt to contribute.
Additionally, many organizations would prefer people to donate their time to community service organizations. Participating in local community service projects is an excellent way for your company to get its name out there, but is also a rewarding activity that can help improve employee satisfaction and breed teamwork.
From a tax point of view, your organization can find tax benefits to donating property and volunteering. With regards to volunteering, the organization cannot deduct your time or the value of your service, but any expenses incurred during the volunteering can be deducted.
If you want to engage and retain your employees, you should strongly consider corporate philanthropy. In fact, a study from the University of South Hampton found that employees perform better when they know that the organization they work for is making charitable donations.
If you want to increase employee satisfaction and commitment, let them chose a charity to donate their money, goods, or time to on your organization’s behalf.
Not only is it a good idea to involve your employees in picking a charity to partner with, but it’s also a great strategy to involve your customers, too. Many organizations partner with charities to donate a percentage of revenue in order to give back and drive more sales.
Survey your current customers to see what organizations or causes are most important to them, and make that the focus of your charitable donations. Your customers will feel more connected to your company and you’ll be able to align yourself with an organization that your target audience cares about.
Remember, not every donation qualifies for a business tax deduction. These guidelines below are a great place to start.
- Find an eligible charity using this IRS search tool
- Make an eligible donation like cash, volunteered services, etc.
- Makes sure the donation is paid in full by the end of the tax year.
- Keep records in the event of an audit.
Giving back shouldn’t be complicated. As a business, you should make donating as easy as possible. Focus on finding a great partner, nationally or within your local community, that has goals that align with your business, your employees, and your customers.