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It makes sense to donate to charity as a small business

November 21, 2017

Many small businesses donate to charity in some form each year. Giving to a charitable cause is not only good for society, it can also be good for business.

Reasons businesses donate

Small businesses decide to support charitable causes for a variety of reasons:

  • Help society – Businesses can use their size and influence to make a significant impact in a community, or on behalf of a cause.
  • Increase customer satisfaction or brand awareness – Businesses can set themselves apart from the competition and become more likable and recognizable by publicly supporting a cause. Some businesses even choose to involve customers in their charitable campaigns, or support nonprofit organizations with missions that are relevant to the company’s product or service. For example, a technology firm may partner with a charity that teaches computer skills to underprivileged students.
  • Tax deductions – Businesses can receive a tax deduction for qualifying charitable donations.
  • Employee retention and satisfaction – Businesses can improve employee morale and create a more positive company culture by mobilizing in support of a cause. Some companies allow employees to nominate charities to partner with, or choose the way the company donates.

Types of donations

Businesses can donate to a charitable cause in many ways:

  • Money – Write a check, set aside a portion of revenue from sales, or collect donations from employees. Some companies may also offer to match employee donations, or choose to develop a specific product or service and donate the profits from its sale.
  • Inventory – Give merchandise or products like food, clothing, toiletries, furniture, or building materials.
  • Events – Organize food, clothing, supply, or blood drives. Companies can also sponsor sports teams, athletic competitions, arts productions, community projects, and fundraisers.
  • Volunteer – Work for free. Nonprofit organizations may need tutors, drivers, servers, or warehouse staff, for example. Companies can schedule a time for employees to volunteer together or encourage staff to sign up in their free time. Some businesses may choose to offer paid time off for volunteering.
  • Services – Donate professional skills. Nonprofit organizations may need help in the legal, policy, medical, dental, counseling, finance, technology, or administrative fields, among others. For example, beauticians may coordinate with a women’s shelter to style hair or give manicures, and artists may work with a community center to lead a children’s craft.
  • Time – Establish a leave-based donation program. This allows employees to forgo their paid leave days in exchange for the company making a monetary donation to a charity.