According to the National Center for Charitable Statistics, 72 percent of all charitable contributions come from private citizens — or roughly $260 billion annually.
Corporate donations account for only five percent of all giving.
However, this tiny percentage could change in the coming years as more businesses grow to appreciate the numerous benefits of charitable giving. Just as with individuals, donations allow corporate stakeholders to support worthy causes. However, there are other important advantages of charitable giving as well.
Below are just some of the main benefits:
1. Improved Social Image
Supporting a charity helps reinforce your business’s positive image within the community. This is critically important for your company’s internal workforce, since donations provide employees with an outlet for effecting meaningful change within the world.
However, charitable giving can also lend legitimacy to your external corporate social responsibility (CSR) efforts. Americans increasingly prefer doing business with those that support important causes. Having a “mission statement” or “environmental pledge” can certainly help. Yet actually donating company resources to that cause sends a much more powerful message; and you’ll likely have an easier time attracting customers, investors and suppliers in the long run. This is especially true if you engage in cross-promotional marketing with the nonprofits you support.
2. Attractive Tax Benefits
The U.S. tax code is complex, but the IRS encourages corporate giving by allowing you to deduct contributions made to recognized charities.
Note that these contributions don’t have to be direct donations in the form of money. Hosting an event or giving away equipment both count as legitimate contributions. Even mileage and other travel expenses sometimes qualify.
To play it safe, you’ll definitely want to consult with an attorney and tax accountant. Though for a good primer on what is and isn’t deductible, be sure to check out this useful resource.
3. Investing in Your Future
Believe it or not, charitable giving can make your own job much easier. Done correctly, each donation can be viewed as an investment in your company’s broader mission statement.
Think of the book publishing company that supports literacy programs. This strategy helps to create more customers down the road.
The same is true of solar installers that support an environmental organization. Their own job becomes easier moving forward.
4. The Feel-Good Factor
Helping others makes us feel better about our role in society. We enjoy charitable giving because it’s simply the right thing to do.
A perfect example is BluePay’s support of a number of charitable organizations because we believe in what they do.
When Should You Start Donating to Charity?
A lot of business owners believe that you have to be a large or successful company to begin making contributions; and they promise themselves that they’ll start donating once they make a little more money.
In fact, though, 75 percent of all small businesses nationwide donate annually, and the average contribution is about 6 percent of yearly profits.
Whether you’re an established firm or just starting, now is the perfect time to begin supporting a worthy cause.
If you’d like even more business tips, click here to learn more.