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BFS Capital Blog

Charitable Giving: How It Works for Small Business

December 13, 2016

“For it is in giving that we receive” isn’t just a good philosophy for individuals. Charitable giving can also reap great benefits for small businesses.

Charitable organizations received nearly $18.5 billion from corporations in 2015, up almost four percent from the previous year. A networking company devoted to small businesses, Alignable, said in 2015 that 95% of small businesses planned some type of charitable donation.

What’s not possible to measure is the yield of generosity to businesses that were able to promote their actions to create goodwill, promote brand awareness, and also improve morale at the workplace.

Generosity can also help companies gain new customers and improve customer loyalty. A Cone Communications study from 2015 found that 93% of consumers have a more positive image of a company when it supports a cause they care about.

But as with everything else, small business owners have to carefully consider and plan the best way to go about their charitable activities. Here are some tips to help you maximize your benefits.
Make Sure Your Charity is Relevant

It makes sense to find a cause that is relevant to your business. Chances are you have a special interest in your small business’ product or service areas, and as with everything else, you’ll reap a lot more if the cause is meaningful to you. If your business donates to a charity that impacts your target market, you’re also more likely to interact with people who would be inclined to buy your product or service.

If you have a pet store, an animal shelter would be a perfect complimentary cause or a food bank for a restaurant.

For small business owners whose customer base is primarily local, it’s usually better to look for nearby charities. By helping your own community, your involvement is more meaningful as it can enhance the welfare of your family, friends and customers. And your donation will certainly be a spark to grow customer loyalty if it has a direct impact on them.

Don’t forget to ask your employees for their opinion on what causes to target for your charitable giving. You will be paid back with more motivated employees if they feel their opinions are valued.
Think Outside the Box

Cash donations are the most obvious way to give back, but providing your product or services for free or at a reduced rate is also appreciated if the organization truly needs it. Another option can be providing training in your specialization to people who could benefit from your knowledge.

You can also gain by offering your employees the opportunity to volunteer with the charities they support. Letting employees volunteer during work hours or encouraging them to volunteer together in after-work projects in the community can enhance morale at the work place.
Do Your Due Diligence

Before you align your small business with a charity or nonprofit, make sure you scrutinize the outfit to confirm you are investing your efforts in a trustworthy organization. Even if you know a lot about the charity, you should review written information on its activities and finances.

Check reputable sources than provide important information about charities and non-profits, such as the Better Business Bureau’s (BBB) Wise Giving Alliance, Charity Navigator, Charity Watch, and GuideStar.
Make Sure You Get Noticed

No matter what type of charity you choose, pictures are a critical part of generating public relations, whether you are focusing on more traditional media or social media. Many times, it’s easier to get a good picture in the newspaper with a caption than a full article because of tight space considerations in publications. On social media, images are key whether you are posting on Facebook, Twitter or other outlets. A good picture immediately captures attention so that people will want to read more about it.

If you donate money, try to have a picture taken that shows how the charity used the money. For example, if you donated to a food bank, have a photo taken of you with your employees and the purchased food. For situations where you or your employees donate time, try to get a photo showing everyone having a good time volunteering.