Unlike giant companies, smaller businesses have a local connection with their communities. Seventy-five percent of small businesses partake in charity donations each year,
according to the U.S. Small Business Association. Charitable giving is a smart move for businesses to give back and invest in the community that supports their operations.
“People want to … shop at a small business because a small business cares about them, as individuals, and the causes they care about,” Kristen Fusaro-Pizzo, owner of Bath, Body, Candle Moments, told Business News Daily.
Consider making a donation to a local charity this holiday season to show your community that your business is more than simply earning a profit. There can be minor tax deductions, but giving as a small business can extend even further, helping build partnerships and alliances with the people involved in the charities.
“We do think it helps us from a marketing standpoint as we want people to know that we are local, our team is local, and we support making our local community a better place,” Brad Schweig, vice president of operations for Sunnyland Furniture, said to Business News Daily.
Choosing a charity
Small businesses should focus on local groups when it comes to making donations. The chosen charity needs to be a bona fide 501(c)(3) organization for tax deduction purposes, and the IRS has a
search tool to verify the charity’s registry. Another website called
Charity Finder offers the financial breakdowns and evaluations of various nonprofits, so givers can see how their funds are used.
Fusaro-Pizzo recommends selecting a charity that reflects your business’s branding: For example, support a group that advocates for protecting ocean life if your business has beach branding. Also, communicate with the charity about your plans. It’s crucial to get permission before any PR or press releases are announced to your customers.
Deciding the amount to give
The U.S. Small Business Association reports that companies donate an average of six percent of profits to charity. Remember that only up to 50 percent of your adjusted gross income is able to be written off as a charitable tax deduction. There are some exceptions to this rule, which are outlined in the
IRS tax code.
However, small businesses don’t only have to give money. Volunteering earns similar benefits and often relays a stronger communal message that reflects back positively on your business. Manual labor cannot be written off the same as monetary donations, but overall, there are few drawbacks from both methods of giving. Research, plan, and effectively communicate with your chosen nonprofit to boost your small business’s success beyond just a profit.
Source: “Small Business Guide to Charitable Giving,” Business News Daily (Dec. 19, 2017)
