Grow the Business thru Charitable Giving–Rethink Business of Charities: Companies and Charities Forging New Partnerships…

Charities and giving– charitable giving– is a big business. Every year charitable and non-profit organizations solicit companies in the hope of obtaining much-needed funding to accomplish their missions that help the less fortunate. Many businesses are willing to give, but are often confused as to which charities might be best for them.

According to Michele Cuthbert; a successful match can lead to a fulfilling partnership and helping others, while a mismatch may lead to disaster. Businesses can build stronger relationships with their communities through their charitable endeavors that help less fortunate while helping themselves to more growth and bigger profits. Giving to charities is a way to both brand your business and assist those in need. It helps to create respect for your business as a company that is doing good in society and so encourage more people to purchase your products and services by making them feel that they are doing something for charity by supporting your business…

The legal definition of charitable organization (and charities) varies according to the country, and in some instances the region of the country in which the charitable organization operates; the regulation, tax treatment, and the way in which local laws affects charitable organizations also varies. For example, in U.S. a charitable organization is an organization that is organized and operated for purposes that are beneficial to the public interest, however, distinctions are made between different types of charity organizations:

Every U.S. and foreign charity that qualifies as tax-exempt under Section 501(c)(3) of the Internal Revenue Code (IRC) is considered a private foundation, unless it demonstrates to the Internal Revenue Service (IRS) that it falls into another category. In general, any organization that’s not a private foundation (i.e., it qualifies as something else) is usually a public charity, as described in Section 509(a) of the IRC.

In addition, a private foundation usually derives its principal fund from an individual, family, corporation or some other single source and, more often than not, is a grant-maker and does not solicit funds from the public. In contrast, a foundation or public charity generally receives grants from individuals, government and private foundations and although some public charities engage in grant-making activities, most conduct direct service or other tax-exempt activities…

Overall, charities are good for business and the obvious main reason– to incorporate charitable giving into your business is that– it’s good to give back to the less fortunate in the community. Also, a second reason to think charitably is that it’s very important to your bottom-line: Customers patronize companies that are doing something for the greater good of the community… and having a charitable component is a business differentiator… and a reason that some customers choose one company over another…

According to Jeneen Todd; I wanted my business to be in the public eye as a business that’s reaching out to the community… marketing my business with charitable events is a fairly inexpensive way to reach out to a large number of potential customers, while still helping others…

charity imagesCA5IF9DO

Quick Facts About Charitable Giving and Nonprofits in U.S.:

  • Nonprofit Organizations: There are 1,537,465 tax-exempt  organizations, including: 955,817 public charities, 97,792 private foundations, 483,856 other types of nonprofit organizations, including chambers of commerce, fraternal organizations and civic leagues. In 2010, nonprofits accounted for 9.2% of all wages and salaries paid in U. S. Nonprofit share of U.S. GDP was 5.5% in 2012. There are an estimated 323,754 congregations (churches) in June 2013.
  • Public Charity Finances: In 2011, public charities reported over $1.59 trillion in total revenues and $1.49 trillion in total expenses. Of the revenue: 22% came from contributions, gifts and government grants. 72% came from program service revenues, which include government fees and contracts. 6% came from other sources… Public charities reported $2.87 trillion in total assets in 2011.
  • Volunteering and Charitable Giving: Approximately 26.5% of Americans over the age of 16 volunteered through or for an organization between September 2009 and September 2012. This proportion has remained relatively constant since 2003 after a slight increase from 27.4% to 28.8% in 2003. Charitable contributions by individuals, foundations, bequests, and corporations reached $298.42 billion in 2011, an increase of 0.9% from the revised 2010 estimates and after adjusting for inflation. Of these charitable contributions: Religious organizations received the largest share, with 32% of total estimated contributions. Educational institutions received the second largest percentage, with 13% of total estimated contributions. Human service organizations accounted for 12% of total estimated contributions in 2010, the third largest share. Individuals gave $217.79 billion in 2011, about the same as in 2010.
  • Foundation Giving: Foundations gave $46.9 billion in 2011, up 2.2% from 2010. Of total foundation giving in 2010: 71% came from independent foundations. 9% came from community foundations. 11% came from corporate foundations. 9% came from operating foundations.

In the article Charitable Giving Is Good for Your Business by Lee Polevoi on writes: Donating to worthy causes can benefit the givers as much as the receivers. When it’s done strategically, charitable giving is good for business– and we’re not just talking about potential tax deductions… While the organization appreciates your donation (financial or otherwise) you can also promote your charitable activities to build good will in the community, enhance customer loyalty, heighten brand awareness, and yes, even increase sales.

Giving to a worthy cause makes good business sense. Make the practice part of your overall business strategy, and you’ll quickly see it’s a win-win situation… However, finding the right charity for your business can be difficult; here are three simple rules of thumb that can help:

  • Pick a cause that you believe in: This helps elevate your involvement from something you feel you should do– to something you truly enjoy doing.
  • Look for a local charity: Knowing that you’re helping your own community can make your involvement more meaningful, especially if it also enhances the well-being of family and friends.
  • Find a cause that relates to your business: If you run a sporting goods store, why not sponsor a kids’ soccer league or Little League team? Support a charity that affects and influences your target market.

charity npe_gusacover1

In the article Why Aligning Your Business With Charity is Important by Jane Greece writes: Aligning your business with charity can be a little difficult to understand, but companies who have aligned with charities are seeing the big picture. There are business benefits for doing the charitable projects even in developed and underdeveloped countries: This is called strategic philanthropy

Most importantly, aligning business with charities, lays some of the foundation for future markets. People will come to associate the business as the good guy, and this matters a lot to some people… If good works matter to them, then good sales for the business follows…

Thus, aligning your business with charity or cause can do a lot of great things, and that’s what makes it important. Doing this type of strategic marketing has many benefits; for example; First, it adds another element to your business’ character. Second, aligning business with charity can attract positive publicity to your business. Third, strategic philanthropy can elicit new ideas to improve or enhance your products and services. And fourth, doing charity would give more meaning to the business… Nothing beats the feeling of feeling good, and  aligning your business with charities is being wise with the business and also being responsible, socially…

Many savvy companies are affiliating themselves with charities to market their businesses. Not only is it a primary means for developing a powerful network, but also it helps others in the process. According to David Frey; people like to associate themselves with businesses that support causes, which help disadvantaged people in a meaningful way. And, don’t think that charities are oblivious to your motivations. Most charities today understand your secondary purpose for participating in charities and are experienced at helping business receive a return on their charitable investments…

From a business standpoint, look for charities that will give you meaningful exposure to a large number of influential people… Linking your name with the charitable cause is an important part of charitable marketing. Even if you are participating in a charity for altruistic reasons, there’s no reason why you should not benefit from the resulting positive exposure… Charities like businesses are interested in building their membership base… Partnering with your charity to market to a niche will bring new customers to the business and new members to the charity…

Taking the idea of charity partnerships a bit further, you may consider establishing a full-time commercial venture with your charity. Both parties would provide specific resources to run the venture. For example, you could provide the financial funding and the charity could provide the staff, expertise and equipment… Although there are a lot of legal and tax issues to address with this strategy, many such ventures are being established with success…

Most corporations enter the philanthropic arena to achieve specific business objectives through a program of good deeds… however, an increasing body of scholarship shows that corporate giving programs actually can generate increased sales and revenues, especially for firms that market directly to consumers…

According to Carlson; corporations represent a vital portion of total charitable giving… it’s important that the strategic priorities of both charities and companies are aligned in order to have an effective partnership… For example, a grocery-store chain partnering with food pantries, instead of other types of nonprofits… or a financial services company that supports school math education…

According to Gregg Carlson, Chairman of the Giving USA Foundation; we have started to see a sustained recovery in corporate giving, and the outlook for business in philanthropy is very positive…