When we donate our own money, it tends to be motivated by highly personal decisions and we give our money to organizations whose missions we believe in or causes we have an emotional connection to. But when donating your company’s money to good causes, it’s best to make a less personal and more rational decision.
Although it’s your money and you can do with it as you please, it’s important to create a company giving strategy before contributing to any cause. Without one, you may unintentionally give away more than you plan in any given fiscal year because there’s no shortage of community groups and charities trying to get the attention of businesses.
When creating your strategy, first decide on your donation limit for the current fiscal year. The overall amount can change year-to-year depending on your business’s financial situation. There’s no need to worry if your donation budget is small – every little bit counts. But if this is the case, consider giving to a smaller number of charities so that you’re not spreading the money too thin. Just as your budget can change every year, so can the charities or community groups you choose.
Your strategy and financial limit can also include non-monetary donations, such as gifts of your products or services. For example, a small print shop that donates free flyers to help a local school fair promote their event isn’t an expense line item in their budget, but it also isn’t a revenue line item either.
Next, decide whether your donations are to be linked to your marketing initiatives or whether giving will simply be giving. Both tactics are equally effective as you’re fulfilling your philanthropic desires either way – but tying your giving strategy to your marketing strategy creates an opportunity for greater exposure.
For small businesses that work in set geographic location, the simplest way to do this is by sponsoring a local children’s sports team. By doing so, it enriches your community and shows that you’re committed to being a part of the community while also guaranteeing a marketing opportunity every time that team hits the field or the ice.
It’s the same strategy used by large corporations when they fund charities or cultural events. Think of CIBC Run for the Cure or Scotiabank Nuit Blanche in Toronto.
Although the dollar amount from an SMB to a community cause is far less than those corporate initiatives, the community involvement is still good for business and the value of the donation is appreciated just the same.