I am sure you have heard about or come across news reports of companies who give out a portion of their well-earned profits to charity. It’s easy to think that they do this out of the goodness of their hearts, but it turns out that there are many other reasons for this charitable giving.
One of the driving forces behind this is the fact that most buyers today consider a company’s reputation before making a purchase. According to recent reports about 70 percent of millennials today spend more on brands that support charitable causes.
Even if this reason doesn’t directly influence your business’ profits, there are other rewarding reasons why charitable giving is good for your business:
1. Builds a relationship with your local community
Delivering on your corporate social responsibility is a good way to build a relationship with your local community and stakeholders. Not only does this boost your local reputation, but it also increases your brand awareness, increasing sales.
There are many ways to benefit from the good press that comes from having your brand associated with a good cause. You could get involved in community projects, mentoring programs, and volunteer for various causes using online platforms like Habitat (https://habitat.org.au/volunteer/about-global-village/volunteer-faqs/) and The Centre for Volunteering (https://www.volunteering.com.au/about/who-we-are/).
2. Qualifies you for reduced corporate tax
For a donation to be tax deductible, it must be made to an organisation endorsed as a Deductible Gift Recipient (DGR), and must be a genuine gift – you cannot receive any benefit from the donation. This means that purchases from a charity that involve raffle tickets, items or food cannot be claimed as tax deductible gifts.
To determine if a charity has DGR endorsement, visit the ACNC Charity Register. When you locate the charity you’re interested in, open their Charity Register page and in the right-hand corner there will be an icon that asks “Will my donation be tax deductible?”
3. Boosts employee morale
Organisations depend on their employees to grow, and contributing to your local community is a good way to boost employee morale. There is a significant relationship between corporate charity donations and positive workplace culture.
Charitable giving increases employees’ respect and attachment to an employer, making them happy to be working for a business that cares for the community. Participants in the study were twice as likely to strongly agree that their organisational culture was positive if it participated in charitable giving.
4. Increases your marketing reach
There is a reason why some of the biggest companies in the world, including Microsoft, Apple and Google, have invested heavily in philanthropic projects. For example, Microsoft donated $1 billion in cloud computing resources while Apple matched their employee donations of over $78 million in 2016 alone.
These multinational companies have realised the power of giving and how investing in communities helps put their names out there. Having a history of charitable giving shows your present and future clients that you are heavily invested in your business.
5. Helps create a better community
Most importantly, giving back to the community helps create a better community for everyone. Although this may not immediately show on your company’s bottom-line, having a better business environment is a great way to ensure your organisation’s longevity.
The benefits of fulfilling your corporate responsibilities cannot be overstated. Not only does it improve your market visibility, but it creates a better working culture and environment to live in for everyone.