In 2017, charitable giving reached $410 billion. About $20.77 billion came from corporations and $66.90 billion from foundations. Over half of all consumers report that they’re happy to pay more for products from socially responsible companies. Philanthropy can also increase staff satisfaction and strengthen your organizational culture. Your employees are more likely to do their best when they know that a part of the company's revenue is used for the greater good. In the long run, socially responsible giving can boost your marketing and branding efforts.
Historically, U.S. corporations have maximized charitable contributions for one major reason: the tax benefits. Donations to qualified charities are generally treated as tax deductible, although it’s important to verify the recipient’s tax status before committing to donate.
Companies that give to charity can deduct cash contributions, furniture, new or used business equipment and other goods. Beware that you can deduct charitable donations only if they are itemized. This means you have to list each deduction individually on Schedule A of the IRS Form 1040. Furthermore, you cannot deduct the time your employees spend volunteering.
Whether you’re giving a one-time donation, giving inventory or contributing services to the charity, the value of your gift is considered a donation. Your company can then receive a deduction for all qualified donations up to a specific amount that’s governed by the tax code.
The rules do change frequently, and it’s important to verify the current restrictions and guidelines before you give or commit to giving. Consult a qualified CPA or licensed corporate tax attorney to help craft a donation plan that maximizes the benefit to your company.
If you want a happier, more engaged workforce, step up your company’s charitable giving. In fact, almost 60 percent of U.S. workers who value their employer’s commitment to social responsibility report being more engaged at work.
You can demonstrate your commitment to social responsibility and charitable giving by starting matching-gift programs and rewarding your employees’ commitment to volunteering. A reputation for charitable giving helps your business attract and keep top talent on your payroll.
Your business’s public image and reputation are valuable assets. You can grow the value of those assets by engaging in a thoughtful, strategic corporate giving campaign that’s supported by appropriate marketing and messaging.
In 2016, the largest point-of-sale fundraising campaign in the U.S. raised over $441 million, which was 4.5 percent more compared to 2014. This shows that many businesses, large and small, are willing to join forces and contribute to the greater good. You can do it too.
Another example is Patagonia, a popular clothing brand that has pledged one percent of sales to environmental causes since 1985. Over the years, the company awarded over $89 million in donations. Today, Patagonia is known as a true activist organization that supports environmental work and encourages customers to get actively involved in its mission.
Certainly, you don’t want to toot your corporate horn too loudly, and charitable giving should be its own reward. However, a corporation’s reputation depends in large part on the specifics of your charitable giving plan as well as on how aware of that plan your customers and prospects are.
Simply put, customers trust companies that are socially responsible. Communicating that responsibility isn’t a bad thing at all. Creating a strong charitable giving plan for your corporation that includes regular giving, gift matching and in-kind donations of services or goods enhance your brand’s public image.
Local and regional media outlets are a great resource for small and mid-sized businesses. Most business owners and marketing professionals know this and make it a point to build good relationships with those outlets and the journalists who work for the local media.
Use these resources to get the word out about your charitable giving program. When the donation is a sizable one, you can usually count on the recipient’s cooperation in crafting a press release and working to make sure it gets the press attention it deserves.
Smart, socially conscious investors want to make sure their funds are used in healthy, appropriate ways. If your company is interested in attracting new investors to support expansion and growth opportunities, a healthy corporate giving program is a great way to accomplish your goal.
A strong commitment to social responsibility shows potential partners, investors and shareholders that your business isn’t just chasing a quick profit. Rather, it’s committed to being a responsible, reliable and engaged member of the local community.
Giving to charities and nonprofits and encouraging your employees to do the same as well as volunteer their time and expertise shows that your company plans to stick around for a long time. On top of that, it gives you a chance to change people's lives for the better. Even small donations can make a world of difference for a charitable organization that's struggling to stay afloat and help those in need.