Home

Books

Articles

Instructional Design

Writer Resources

Bio

Contact

Sensible Giving

Donating to charity should be part of your business plan.

Costco Connection ©Jennifer Crump

Most small business owners know the pull and tug of giving to worthy causes, from the local school selling ads in the school paper to organized charities seeking a significant contribution. With more than 75,000 registered charities vying for a share of a shrinking public purse, small-business owners are being targeted more than ever for their support.

Arnold Duncan, Costco member and owner of Duncan's Furniture and Appliance in Harrow, Ontario, says that he is approached by organizations almost daily. Still, he seldom says no, choosing instead "to give something to everyone, especially local charities."

Is that the right strategy for everyone? Businesses should approach charitable giving as they would any other business decision, with planning and research, advises Lee Rennick, who works with charities and businesses through her consulting firm, Rennick, Hoppe and Associates, in Scarborough, Ontario. " A charitable-giving plan ensures that giving decisions are based less on an emotional response and more on an informed, calculated decision to a proposal," says Rennick. Such a plan should identify how much your business can afford to give and to whom, but Rennick suggests that giving should also be integrated with advertising and marketing budgets for maximum impact.

Before you decide which cause to suport, consider which charitable sector connects best with your own and your employees' interests, as well as your business objectives. A restaurant might want to support a food bank, for example, while a sporting goods store could sponsor local sports teams. Choosing a cause that reflects your employees' interests can be a great team builder and can provide an opportunity to give more by matching employee donations. Once you have a formal plan in place, it becomes far easier to turn down requests that don't fit your criteria.

Mark Marler, Costco member and co-owner of C&T Tool in Peterborough, Ontario, says he doesn't have a formal charitable-giving plan, but he concentrates on charities that involve children and local sports, in part because his partner, Dave Forsythe, is very involved in local amateur sports. He admits that "there are so many [good causes], it depends on who catches you on the right day."

Like Marler and Duncan, many business owners tend to give small amounts to many causes, but Rennick suggests that businesses concentrate their giving by choosing one or two specific charities to support. "Your gift will have a greater impact and the organization will be more likely to recognize your gift in a meaningful way," she says.

Although recognition is probably not your primary motivation for supporting a cause, it should still be a consideration. Most large corporations recognize the importance of a good corporate image, and smaller businesses may find themselves in need of public goodwill as well. For that goodwill to be effective, though, the public has to know about your philanthropic work. " Ask what a charity can do for you," advises Rennick.

Most of the large charities have marketing specialists, with access to the media and relationships with other companies you may want to do business with. Even small organizations can arrange opportunities for pictures, and many publish an annual list of donors or a newsletter that recognizes contributors. Others host lunches or dinners where you might have an opportunity to meet like-minded businesspeople. Local media often cover these events, as well. For information on these opportunities, speak directly to the charity's communications person or marketing specialist. They're usually eager to help sponsors, especially those who have made a significant contribution.

Deciding how much to give is a financial decision as well as a marketing one. The Canadian Centre for Philanthropy promotes the Caring Companies program, in which businesses are encouraged to donate 1 per cent of their pre-tax profits, but Kevin Freeborn, a management consultant in Caledon East, Ontario, suggests that businesses "give enough to make a difference." He also suggests that business owners keep tax benefits in mind when deciding when, how and to whom they will lend their support.

"Sole proprietors can transfer tax credits for donations to registered charities to the highest earner in the family," says Freeborn. "Factor in provincial and federal credits, and accumulated for up to five years, to be claimed at a time of maximum benefit."

With so many organizations and charities looking for support, even a small donation can make a difference. With a little planning, charitable giving can be a very powerful business tool and not just something that comes off your bottom line.