Human beings are, in general, charitable creatures. This is reflected by key statistics; according to Charity Navigator, $410bn in charity was given in 2017, up 5.2% on the year before. Your typical charity-giver is a private citizen; however, those statistics show that businesses are taking a greater role than ever before, accounting now for 20% of all giving.
The fact is that businesses stand to gain a lot from charity, and charity can receive a boost in tandem. Taking the basic principles of charity and applying them to a business model is a challenge, but well worth completing. Doing so will of benefit to everyone.
Bottom line: the beneficiaries, and how they benefit business
While many businesses will conduct charity for many reasons, the most important and main benefactor is, of course, the target of said charity. Benefiting those disadvantaged people and the community is the primary aim of charity and that must be remembered. Even this is full of benefits for business, however. As The Balance outline in their report on charity, developing the local community through charity will help to develop connections in the future and upskill the local workforce.
Direct monetary benefits to charity
Aside from the feel-good factor of charity and the corporate responsibility it delivers, there are actual cash benefits to be had from charity. This should be of interest to any entrepreneur, especially those chasing percentage changes. Companies including Hersheys have shown how philanthropy has boosted sales significantly and, in the process, cut costs; the IRS have provided comprehensive guidance to the tax status of charitable deductions and for many businesses this provides a net revenue increase.
Can small business do it?
A common misconception is that only large corporations can afford to invest in philanthropy. In truth, even donating a small amount – within your means – is helpful. This could be a product with low production time, or even just giving the facility to host a fundraiser. The benefit is twofold; you will start making important impacts that enhance your reputation, and, as Forbes contributor Camilo Maldonado outlines, improves your own wellbeing. Even donating small amounts has been shown to enhance your feelings of health.
The benefits of business philanthropy are numerous. It benefits the community, the company bottom line, and the owner, and all of these effects work in reverse. A perfect pairing, if your small business doesn’t yet engage in charity, why not start now?