Create an effective giving strategy for your business
Small business is a potent but often overlooked supporter of charity. Virtually all U.S. businesses with one to 249 employees contribute to charitable organizations in some fashion.
Small businesses are also passionate in their support of local community causes and place humanitarian concerns above all else when deciding which charities to support
These and other findings are from a study commissioned by the National Federation of Independent Business. The National Small Business Poll provides a comprehensive look at the current philanthropic practices of small businesses and may help to inspire your own giving strategy. Below is a closer look at some of the study’s highlights.
Giving takes many forms
Small-business owners universally give money. For example, 70 percent of those who participated in the survey said they had donated cash — with the average donation hovering around $3,600. But charitable activity among small businesses was by no means limited to check writing. More than two-thirds said their company supported charities through in-kind contributions of products and services. Seventy-four percent indicated they had participated in a variety of fundraising or promotional events — from purchasing advertisements in charity event publications and sponsoring youth sports teams to attending benefit dinners, walkathons and charity auctions.
A focus on the bottom line
Small-business owners generally have great expectations with regard to how charities manage the contributions they receive. For example, factors that might influence their giving decisions include knowing how a charity spends its money (including how truthful and accurate a charity is in its fundraising appeals), how successful a charity’s programs are in achieving its stated mission and how willing a charity is to disclose information about its operations. In addition, many small businesses expect the bulk of a charity’s total expenditures to go toward its programs as opposed to fundraising activities.
Small-business owners are motivated to give by personal satisfaction as well as by the desire to improve their communities. More than one-third of those polled said helping the community become a better place to live is very important to their giving decisions, compared to 41 percent who cited personal satisfaction. A values-based approach to giving can enhance a company’s reputation with customers and prospects. In fact, consumer spending data shows that, when all else is equal, people prefer to buy from a company that is associated with a good cause.
William McDonough is an investment representative associated with LPL Financial.