Managing Your Business
Why Giving Is Good for Business
More than ever, consumers want companies to stand for something beyond business alone. A 2017 survey found 87% of people would make a purchase because a brand advocated for an issue they cared about.
From climate change to racial equality, Americans increasingly want a brand to align with their beliefs on important issues. Brands are using this opportunity to use their voices on social media, and in some cases putting action behind their words by giving money or time to support a cause.
This form of corporate philanthropy, while not new, can take on a whole new significance as consumer preferences shift towards companies that choose to use their influence for the greater good.
What Is Giving Tuesday?
Giving Tuesday is one recent way companies across the United States have gotten involved to give back to various organizations. It falls every year on the Tuesday after Thanksgiving and is a way for businesses to give back after Black Friday and Cyber Monday sales. Spurred by the social media hashtag #GivingTuesday, Giving Tuesday helped raise over $500 million in 2019.
5 Ways Giving Back Can Help Your Bottom Line
While Giving Tuesday is an excellent way for businesses of all sizes to advocate for issues while advancing their social responsibility goals, many companies look for other ways to give year-round. When done consistently and authentically, corporate philanthropy can help grow a company and win loyal customers. Below, we'll explore five ways that giving is a win-win for any business.
1. Helps Your Brand Make Meaningful Connections
When a company has a definite mission that ties back to a charitable goal, people take notice. Younger generations like Millennials and Gen Zers look for this type of authenticity before opening their wallets. A survey of 1,000 Americans found that 30% of consumers planned on increasing their purchases at companies they believed were socially responsible.
This increasing desire to connect shopping with charitable giving is one reason big brands like Amazon allow customers to select a charity to receive a percentage of purchase price as a donation. This small change has helped generate over $100 million for charities since 2013.
2. Improves Employee Morale & Productivity
In addition to creating these essential customer connections, charity work also helps boost employee morale. One study observed a 13% increase in productivity among employees who participated in corporate philanthropy efforts.
Charitable giving may also help you find new employees. Those same Millennials who want to spend money with socially conscious companies choose their employers the same way. Over half of Millennials and Gen Zers surveyed believe it is important for a company to have a sense of purpose before they choose to work there.
3. Increases Brand Awareness
Charitable giving is a great way to help your brand stand out. Many are familiar with the example of TOMS shoes, which saw tremendous growth thanks to the "buy a pair, give a pair" business model. The TOMS model inspired firefighter-turned-entrepreneur John Winslow to found 1For1 Water, a social enterprise created to bring clean, drinkable water to people in desperate need. If you'd like to know more, we featured Winslow and 1For1 Water in a recent Spotlight article.
Philanthropic efforts that align with a brand's ethos can be an excellent way for a company to stand out in a crowded marketplace. This holds true, especially for small local businesses that may be relatively unknown. Networking at a fundraising event or getting your business name up on a poster or shirt for a local 5k can put a brand in front of a whole new customer base. Giving money or time can also help generate favorable news coverage and positive publicity.
4. Provides Potential Tax Deductions
Charitable giving is one way to potentially owe less on your taxes at the end of the year. While you should work closely with your accountant and tax attorney to identify appropriate write-offs, most donations will be considered a tax deduction.
5. Builds Goodwill With Your Community
Corporate philanthropy is not always a dollar-for-dollar equation. When done the right way and for the right reasons, it can help promote goodwill across the board for nearly any organization.
Examples of Corporate Philanthropy
While giving helps the bottom line, don't lose sight of your purpose when giving. Most consumers are wary and can easily spot the kind of phony humble-bragging done only to look good and make a buck.
To feel genuine, giving must be genuine. Find a cause that resonates with you and your business. Keeping it authentic will be the only real way to ensure continued success and connection for your brand. Below are some tried and true ways companies give back.
Volunteering at a Nonprofit
A business does not always have to give money to make an impact. Many choose to give their time by allowing employees time to volunteer at food banks, homeless shelters, or animal rescues. The chances are good that the employees of a socially responsible business are already passionate about giving and will leap at the opportunity to volunteer as a team.
Sponsoring Local Sports Teams
Youth sports teams are always looking for corporate sponsors. Local businesses typically donate funds to help with uniforms and upkeep of equipment and fields. In return, the company gets to display its name on uniforms or signs at the big game.
Holding a Charity Drive
Charity drives are always a hit during the holidays. From canned food to coats, you can choose to collect items for any local organization that needs extra support. When Hurricane Harvey devastated Houston in 2017, Los Angeles-based City Lights Gateway Foundation worked with local communities to raise 80 tons of supplies for those impacted by the disaster.
Matching Employee or Customer Donations
Many employers that want to raise funds for disaster relief or an on-going sponsorship may choose to match employee or customer donations. This helps encourage giving across an organization and can help raise large amounts of money quickly.
Start a Foundation
If you have a cause you're passionate about that resonates with your business, your company can create its own foundation. That's what Live.Give.Save. founder Susan Langer did.
Live.Give.Save. is a small tech company that created a personal finance app. In 2017, the company established the Live Give Save Foundation to help nonprofits generate donations through technology.
At the End of the Day, Giving Is the Right Thing to Do
Ultimately, giving is good for business when you make it a core element of your company culture. Everyone from your employees to your customers should know what your company stands for and how your charitable efforts help support that mission.
Giving is contagious. Your business could be the center of a movement that is yet to start in your industry or local community. You really won't know the true impact you could have until you start.
Starting a New Nonprofit?
Swyft Filings doesn't just help people start new businesses. If you want to found a new nonprofit, check out our simple guide on How to Start a Nonprofit in 8 Steps. If you're ready to make the plunge, we can help you file your nonprofit paperwork, too.