Should Your Maker Business Support a Charity?
There are several reasons why small businesses should give to charity. The most important reason is that charitable giving creates a positive relationship with the community, which is the very thing that sets small businesses apart from larger corporations. Small businesses thrive on community involvement and giving to a worthy cause is a great way to attract and keep customers’ attention.
Four Reasons Your Small Maker Business Should Support a Charity
On a recent episode of the Business for Makers Podcast, I spoke to Ryan of Green Beard Grooming about his charitable donations. You see, Ryan donates a portion of his profits to reforestation efforts. In our conversation we described the mutual benefits of maker businesses, even small ones like ours, supporting important causes. Below, I summarized four of those reasons why supporting a charity is a win-win. I even included brief excerpts from our conversation, though there is much more on the podcast. (Go check it out!) Please note that I’ve lightly edited the excerpts for readability here.
#1. Positive Branding
Charitable giving puts your company in a positive light. Forty years ago, the only responsibility a company had was to turn a profit. It was common to hear, “greed is good.” But today, we demand more from businesses than just financial solvency, including social responsibility, which is the idea that businesses should use some of their assets to benefit the community.
Companies that take an active role in promoting their corporate social responsibility are generally viewed more favorably than those that do not have established charitable giving programs. In fact, 85% of consumers have a more positive image of companies that give to charity and 90% of consumers want to know how companies are supporting charitable causes. If you haven’t considered your business’s social responsibility yet, these numbers should convince you to do so.
An excerpt from the Business for Makers Podcast, Episode 21:
George Supply Co.: “Do you ever get any feedback that the customer appreciates your donation?”
Green Beard Grooming: “Yes, on Instagram and social media, [I get] a lot of positive feedback there. And then Kickstarter, it’s so much fun because you really are engaging with people.”
#2. Gain Customer Support
Giving back to your community will help you build stronger relationships with your existing customers — and gain new ones. Networking with community leaders and getting in front of active community volunteers can help start conversations about your business. But, in addition, it means it would be valuable for you to do some market research to identify the most popular charitable causes in your area. Perhaps there’s local school fundraisers, efforts to clean up a nearby park, or even something you can do for people far away from you, but whom are the subject of a lot of news or conversation in your community, like refugees from an unstable political situation across the world. The connections you make with the charities and your local community are paramount for fulfilling your business’s social responsibility, but also they give people a reason to simply like your company, beyond having stellar customer service and high-quality products.
George Supply Co.: “So how did you find and vet your partner One Tree Planted?”
Green Beard Grooming: “When I reached out to the nonprofits that were taking on these reforestation projects and offering a one-to-one, one dollar, one tree type of a path, they were very responsive.. You can focus your reforestation dollars to a specific place or region or country or state.”
#3. Tax Deductions
One of the most immediate benefits to your business from supporting a charity is being able to get a charitable donation tax deduction, which means you pay fewer taxes, and have more capital to reinvest in your business or cover your costs. Donations that are generally tax-deductible include sponsorships of charities or events, donations of inventory or services, and cash donations. In general, you can get deductions on charitable donations of up to 50 percent of your adjusted gross income — but be sure to follow the rules closely to avoid any tax problems. Talk to an accountant for more help, this blog post is not financial advice.
I can provide you a few things to keep in mind if you are thinking of using your charitable contributions to deduct your taxes. Make sure you are working with a nonprofit organization that is approved by the IRS. The IRS website has a list of the kinds of organizations that qualify. And in order to get your tax deduction, the charity or nonprofit will need to issue you a tax form that you can file your tax return. Depending on your income and other factors, giving money to charities can be complicated — so, again, talk to your accountant or tax adviser.
#4. Giving Back is Good For You
Even aside from the tax breaks and publicity, perhaps the biggest benefit of having your business support a charity is the feeling you get from giving to others. Small business owners tend to be energetic, talented, action-oriented people who are natural leaders. The exact same kind of people are leading nonprofits, charities, and efforts to better society, all around the country and world. As a business owner, you have the power to stand up against poverty, human rights violations, or whatever cause is close to your heart. And you’ll likely meet folks with similar values as you. This is really the heart of corporate social responsibility: We all benefit when our society is working fairly. If businesses want a strong, competitive, fair market in which to succeed, they have some responsibility in helping create it. And that’s good for everyone.
Green Beard Grooming: “ Those larger reforestation nonprofits are doing some amazing work out there and the size they’re able to operate in really allows that to happen So we are a small part of that.”
Considerations for Selecting Which Charity to Support
When picking a charity to support, there are two important aspects to consider: make the support meaningful and relevant to your business.
Make it Meaningful
Pick a cause that is truly meaningful to the company. This could be a cause or organization that is personally important to the owner or employees. Ask yourself and your employees what they care about and how your business can do something about it. If your charitable contributions are merely perfunctory, or you’re doing it solely for the tax deductions, you might find your motivation quickly deflating. Sometimes it’s not simple to donate to a charity. But if it’s meaningful to you, your employees, and your community, it’ll be worth it.
Green Beard Grooming: “I grew up on a Christmas tree farm in Nebraska. I wanted to merge a couple of things that I’m passionate about. One being my beard and mustache, and then two being trees. I grew up planting trees with my dad, and I wanted to get back to that a little bit. I thought about reforestation, beard products, and we just mix in some sustainably-sourced wood combs and products like waxes where we share the recipe and encourage people to make their own product.”
Make it Relevant
Find a charity whose mission aligns with your company’s mission. It certainly makes a lot more sense for a pet store to donate (both money and products) to an animal shelter than to the symphony. (But if the fine arts are a passion of yours, then by all means, donate away!) When missions of the company and charity align, you get the feeling that more can be accomplished together than when the two work separately. If you’re a woodworker, you might be passionate about environmental or conservation projects, about local parks and recreation, or about historical preservation (have you seen the craftsmanship in hundred-year-old homes?).
So find a cause that you are passionate about and reap the benefits for your business, the cause you are supporting, and your own personal well-being.
Ensure you have your costs and retails calculated, and then include the expense of the donation on top of the retail if necessary. Donating to charity requires cutting into your profits, but it shouldn’t come at the cost of your bottom line. You can’t help your community if your company fails.
Scott Chervitz is owner of George Supply Company, dedicated to helping woodshops build their brand. See more at GeorgeSupplyCo.com. You can reach him at Scott@GeorgeSupplyCo.com, on Instagram at @GeorgeSupplyCompany or Twitter @ScottChervitz
Brian Chervitz, M.S., is an Associate Instructional Designer at the University of Wisconsin Extended Campus.