Philanthropy and You: How to Get Started with Charitable Giving

Each year, major corporations release information about their philanthropic work, charitable donations, and community investments. While Walmart, Chevron, JP Morgan Chase, and Google give hundreds of millions each year, smaller businesses can also have a significant impact on their local communities and national and global causes. Without millions to spare, though, how does a small business navigate the not-for-profit world to decide where to donate? 

On average, small companies donate 6% of their profits to charity, according to a study conducted by American Express and The Chronicle of Philanthropy. Donators enjoy tax benefits as well as increased community engagement as a result of that giving.

Find charitable organizations that align with your business interests. If your firm specializes in medical malpractice, for example, get involved with health charities like Doctors Without Borders. Or, find options that align with the needs of your local community, like hurricane relief, clean water, and education. But avoid using company funds and employee volunteer time for political or religious causes. Doing so might alienate staff and clients with differing beliefs, and since philanthropy is all about increasing inclusion, you don’t want to make a choice that will cause employees or customers to be excluded. 

Vet the organizations you’re interested in to determine whether they use donations responsibly; websites like Charity Navigator, GuideStar, and the Better Business Bureau Wise Giving Alliance reveal financial health, accountability, and transparency. Unfortunately, plenty of scam charities exist, so it’s important to review each organization's alignment to their missions and goals, program vs. administrative expenses, and contributions vs. spending breakdowns. Kris Putnam-Walkerly, president of the philanthropic advisory firm Putnam Consulting Group, also notes that you can “pick up the phone, call the organization and ask to speak to the executive director. Nonprofit leaders should be happy to talk with potential donors about their organization and their impact and should be especially interested in building relationships with local businesses." 

Once you’ve vetted options, Putnam-Walkerly also suggests that you choose an organization you want to have an ongoing relationship with. “Talk to the nonprofit about ways you could help year-round, such as volunteering, sponsoring events and inviting the charity's CEO to speak to your local business associations. And remember, this is a two-way relationship. Ask the charity if there are easy ways they could publicize your support, such as in their donor newsletters."

Other than monetary donations, small companies greatly benefit from directly volunteering with local organizations. Personal involvement in a cause can serve as a team-building activity and allows participants to see their impact first-hand. Plus, your company’s involvement sends a clear, positive message to your clients and business’s community. 

Another benefit to charitable giving comes at tax time, when donations of money,  property or equipment, and travel expenses can be deducted. Check with your tax advisor about this year’s tax laws and how they affect the deductions and benefits your company can claim.  

Forging philanthropic relationships demonstrates that you’re committed to more than just profits and are interested in making your community a better place. From a marketing standpoint, this attitude can be the reason why a client chooses your firm over another because they see your concern for people as individuals. Direct volunteering and donations of funds, equipment or property, can add a meaningful dimension to your company’s work and to the lives of its staff, all while improving the conditions of our communities. Now is the perfect time to get started!