Let’s talk a little bit about corporate giving. After all, it’s probably (in some way) already a part of the way either you as an individual or your company spends money. But if you’re looking to be a better philanthropist, there are a few important factors to consider. And now’s a great time to start thinking about that.
At the start of every new year, most businesses are thinking a lot about how they’re spending their money. They’re reflecting back on last year’s budget and figuring out how they’re going to budget for the year ahead. This is especially true if you’re getting ready to file taxes, and maybe you’re realizing that you didn’t do any (or as much) annual giving on behalf of your business as you would like.
If you’re interested in the idea of corporate giving, we recommend checking out a recent webinar we did, Modern Corporate Giving Strategies, led by Brittany Saadiq, Director of Development with the Russell Innovation Center for Entrepreneurs. But we’ve got a brief rundown to share with you right now.
To start, consider the fact that corporate giving makes up about 4% of all charitable donations made globally. That’s not as much as the 67% of all giving that’s done personally by individuals, but it still accounts for about $21.08 billion, according to a report put out by Giving USA in 2022. And those numbers are going up. In the past two years, more and more businesses are making a conscious effort to be better about giving.
Types of Corporate Giving
A donation from a business or brand can take many different forms. One common type of corporate giving is that of an event sponsorship, where a business provides money for an event—such as a festival, parade, fundraiser, or competition—in return for having their business name and logo included on the list of sponsors.
Another common form of business giving is in-kind contributions, when a business will provide its product or service free of charge to a good cause. For example, restaurants will often donate food to events—not only is this a convenient thing for them to give, but it also serves as good advertising, because people who enjoy their food at the event could easily be turned into customers.
A third common type of donation is the matched donation. If a business has a board member or an employee who is frequently making donations to a cause that’s important to them, then the business might offer to match what their employee or board member is donating, either dollar or dollar, or at a reduced rate—for example, the business might give 10 cents for every dollar a board member donates to a good cause.
Reasons for Corporate Giving
There are many different reasons for corporate giving, but four of the most prominent ones are:
Being Ethical or Altruistic
Many businesses recognize that they have a responsibility to be a good contributor above and beyond what they do in their for-profit capacity. In other words, they want to do good. They recognize that giving is the right thing to do. When corporations often give for ethical or altruistic reasons, they will do it because they see a clear need in their community, or because the cause they are supporting is one that’s close to the heart of leadership, whether that’s the owner or a member of management.
Making donations is one way that companies can build stronger relationships with public offices. However, political giving isn’t always about giving to politicians. It might be about investing in an educational program for an employee, for example.
There are all kinds of people who are involved in a business—not just the owners or executive staff, but also customers, supplies, shareholders, or board members, depending on the model of the business. One common reason for corporate giving is to support the interests of the many parties involved. Sometimes that could be as simple as encouraging an employee volunteerism project.
Good for Corporate Productivity
The reality is that giving is often good for business—corporate giving leads to higher profits. When potential customers see your business logo included among a list of sponsors, they will be more inclined to spend money with you. When employees feel as if the causes that are important to them are important to you, it improves morale and boosts productivity.
How to Get Started Giving Back
Remember that if you’re interested in making more donations and gifts throughout 2023, you should start by emphasizing relationships. The people involved in these nonprofits and charities you’re looking to support will communicate their greatest needs to you, show you exactly how your money is being spent, and ensure you get the proper recognition and thanks you deserve. Seek out local charities and nonprofits by finding out connections within the networks of your board, your employees, or your corporate leadership. You can also network within your business community, as many nonprofit organizations maintain a presence at mixers and development programs.