February 11, 2016
Article courtesy of Independent Bank
You, as a business owner, want to do your part to help your community. According to the Small Business Administration, three-quarters of small business owners donate a portion of their profits to charity every year. Charitable giving helps those who need it in your community, and it can help your business, too. Here’s how:
Tax incentives for giving
It’s a wise idea to discuss the tax advantages of charitable giving with your accountant or tax attorney. Generally, you will be able to deduct your cash donations, volunteered services, or sponsorship of a charity event, says the SBA. Be sure that the charity you are donating to is a registered 501(c)3 and that you keep accurate records in case of an audit.
Corporate philanthropy as a predictor of future revenue growth
In several academic studies, including a 2010 article in Strategic Management Journal, researchers have found a correlation between a company’s charitable giving and its economic success.
Though the decision of how much to donate varies from company to company, Chronicle of Philanthropy found that companies donate an average of 6 percent of profits to charities. In addition to traditional cash donations, it might be worth exploring a matching donation program with your employees or in-kind giving, donations of products or services, which are tax deductible.
Improving your perception as a good neighbor
A 2011 study from the University of Iowa reveals that corporate giving bolsters the perception of a business within the community—and it’s also good for employee morale. These results of charitable giving have long-lasting effects. For example, they may lead to increased loyalty and retention among both your customers and your employees.
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