Gratitude can be a powerful thing. As we head into Christmas and New Year’s, the festive nature of the season can help us realize all that we have — including family, friends and employment — and to be thankful. That gratitude can then inspire us to want to help others.
Entrepreneurs can make charity a part of their approach to business, and in a variety of ways. A survey by Funding Circle revealed some interesting figures, as reported by Joshua Sophy last December for smallbiztrends.com.
- Of 1,400 small business owners polled, 52 percent said they were donating or had already donated to charity.
- 46 percent planned to donate “up to $1,000.”
- 44 percent preferred to donate cash.
“The holiday season can be a pretty hectic time for small businesses, so it’s incredible to see so many business owners prioritizing charitable giving this year,” Funding Circle spokesperson Liz Pollock said.
Here’s a look at ways for entrepreneurs to give back and some of the benefits of being charitable.
Getting involved with charity can give small business owners a lift in many ways. But before considering how it can benefit a business, it’s wise to focus on the act of giving. The basic idea of helping people who need it is reason enough to make it a priority. Molly St. Louis examines this in a story for Inc.com.
“Charitable donations help better your community, and the public will notice if a company is making a real effort to improve its surroundings,” she explains. “Your company’s charitable donations could help improve schools or parks, giving children safe places to learn and play. If you choose to donate to a nonprofit organization that conducts medical research, you could also help in the effort to cure diseases. The opportunities are endless and extremely helpful.”
Determine what effort to join
There are countless charitable organizations that businesses can connect with and develop a relationship. Charity can often have strong personal ties, and there may be particular causes that matter a great deal for small business owners. In a Young Entrepreneur Council story for Forbes, Mike Ambassador Bruny recommends starting by “listing out what is important to you.”
“Maybe you received a scholarship, so you want to make sure someone gets the same opportunity you’ve had,” he writes. “A loved one might have suffered from a particular ailment, so you want to help fund research. List the places you’ve been, the organizations you’ve belonged to and the events that have had the greatest impact on your life. The closer the cause is [to] you personally, the easier it will be for you to share the story.”
How to do it
Giving to charities can be as simple as writing a check or volunteering your time. There are other ways to get involved, including initiatives that allow customers to feel a part of the effort. Tony Pica details one method that could be particularly well-received during the holidays in a story for The Washington Post.
“Commit to donating a small dollar amount per purchase — or a percentage of sales — to a charity of your choice around the holidays,” he writes, “and promote your cause and resulting donations with free mobile apps that allow you to share special offers, coupons and promotions through e-mail, Facebook or Twitter. It’s a great way to engage customers and make them feel good about their purchases.”
Charitable efforts naturally give us good feelings. When a business makes those efforts a priority, those positive vibes can spread throughout the company. Employee engagement is an essential element of a successful business, so charitable work can help to affirm staff members’ belief in the company and its leadership. Molly St. Louis includes this in her Inc.com story.
“If a company chooses to make a corporate donation, workplace culture can improve with increased employee involvement and a positive general attitude,” she explains. “According to a 2016 Deloitte study on volunteering, millennials were ‘twice as likely to rate their corporate culture as very positive’ if their company participated in workplace volunteer activities. Employees respect companies that care for their community — it simply makes employees feel good, and increases the emotional attachment to their employer.”
Another option in community involvement is sponsoring an event or a local youth team. Think of all the logos you see on the back of a T-shirt from a benefit event or fun run — those businesses donated time, services or money for that event. Being connected to a positive community effort in turn is good outreach for the business. Drew Hendricks writes for Forbes that sponsorships “will allow a business to get the word out about its products or services while funneling marketing money into supporting a local cause.”
“Instead of handing that money over to a media outlet or online advertising service, these businesses are able to ensure that money makes a difference in the community while still achieving its marketing goals,” he explains. “In sponsoring an event, it’s important for all employees to participate in making the event a success. Consider creating T-shirts that include both the business’s name and the title of the event. The merchandise can not only be sold, with proceeds going to the cause, but the day of the event, employees can show up wearing the shirts to further promote the business’s participation.”
Charitable efforts also make a difference when it comes to the business’ taxes. Though the boost shouldn’t rate as highly on the priority list as the act of giving, the tax benefits are worth exploring. (The Internal Revenue Service’s definition of a charitable contribution notes that it is “voluntary and is made without getting, or expecting to get, anything of equal value.”)
Caron Beesley gives an overview in a story for the U.S. Small Business Administration, and acknowledges the complexity of the tax code: “… it’s important to note that not all contributions can be considered legitimate deductions.” Among her tips on deductions:
- Donating money: “Cash or other monetary contributions may be tax deductible as long as they are not set aside for use by a specific person. Contributions must also be made during the tax year to be eligible for a deduction, regardless of the accounting method you use.”
- Donating property/inventory: “These are also considered a valid tax deduction. Donations are evaluated and deducted based on their fair market value (basically what a consumer would pay for these goods in an open market).”
- Volunteering: “While you can’t deduct the value of your service, you can deduct certain expenses incurred and related to your volunteer work. For example, if you host a party or fundraiser for the organization, you can deduct the costs. Other deductibles include supplies (e.g. stationery), the costs of a uniform and telephone expenses.”
A good deed is good for you
It may sound simplistic, but business owners help themselves by helping others. Beyond all the business reasons, charity gives us the chance to better ourselves. As Alyssa Gregory writes for The Balance, “Volunteering makes you more well-rounded as a person and a well-rounded business owner.”
“When you volunteer for the right reasons … you have an opportunity to improve many different areas of your life,” she says. “Personal growth can not only make you a better, more fulfilled person, but it can help you identify more productive goals in your business and ultimately become more successful.”