One of the best things about being a small business owner is the connections you can make with your local community. Being able to serve people in your local area with your small business and getting to know customers on a personal level can help you to build a solid customer base. It makes sense that at some point in your business plan you will want to give back and help others around you via charitable donations.
The act of corporate philanthropy is when you, as a business, promote the well-being of others. This can be done by donating time, money or goods and services. In this post, we are going to look at three ways you as a small business owner can help others in your local community.
The act of corporate philanthropy is when you, as a business, promote the well-being of others. This can be done by donating time, money or goods and services. In this post, we are going to look at three ways you as a small business owner can help others in your local community.
3 Ways your Small Business Can Help Your Local Community
1. Donate Profits (And Reap Tax Benefits)
A great way to start supporting your local community is to donate a portion of your profits. According to a study conducted by American Express and The Chronicle of Philanthropy, small companies donate an average of 6% of their profits to charity. Of course, the tax benefit you receive will be dependent upon how much you donate as well as your business's revenue. For example, individuals may deduct qualified contributions of up to 100 percent of their adjusted gross income, while a corporation may deduct qualified contributions of up to 25 percent of its taxable income. Contributions that exceed that amount can carry over to the next tax year.
To see if it makes financial sense for your small business to operate this way, speak with your accountant or other tax professional.
2. Donate Products, Goods And / Or Services
You may find that you are able to donate products, goods or services easier than profits. For example, a local music shop might donate used musical instruments to a school or daycare; a restaurant or grocer might donate imperfect foods to a soup kitchen or a tutor might donate their time to less fortunate children in the area.
Additionally, to raise money for charity, you can try the following:
To get an idea of what a typical small business might donate when it comes to products, goods and services, check out what Concert Pianos does to give back to their community in Texas.
A great way to start supporting your local community is to donate a portion of your profits. According to a study conducted by American Express and The Chronicle of Philanthropy, small companies donate an average of 6% of their profits to charity. Of course, the tax benefit you receive will be dependent upon how much you donate as well as your business's revenue. For example, individuals may deduct qualified contributions of up to 100 percent of their adjusted gross income, while a corporation may deduct qualified contributions of up to 25 percent of its taxable income. Contributions that exceed that amount can carry over to the next tax year.
To see if it makes financial sense for your small business to operate this way, speak with your accountant or other tax professional.
2. Donate Products, Goods And / Or Services
You may find that you are able to donate products, goods or services easier than profits. For example, a local music shop might donate used musical instruments to a school or daycare; a restaurant or grocer might donate imperfect foods to a soup kitchen or a tutor might donate their time to less fortunate children in the area.
Additionally, to raise money for charity, you can try the following:
- Showcase a particular item for sale or service you offer, and donate a portion of the proceeds to your favorite charity
- Hold a raffle for an item or service you offer and donate the money to a charity you hold dear
- Check with your local Chamber of Commerce and see if you can donate to a silent auction
To get an idea of what a typical small business might donate when it comes to products, goods and services, check out what Concert Pianos does to give back to their community in Texas.
3. Sponsor A Team or An Event
Does your local little league team need a new sponsor for kits, equipment, trophies or travel expenses? Or maybe there are bowling leagues, hockey teams and other non-profit organizations that can benefit from your sponsorship. A sponsorship is a great way to get involved with the community while providing financial support to a local team or organization at a grassroots level. Sponsorships work for small businesses because of the publicity they offer your company. In exchange for your financial support, your company or brand will be advertised on uniforms, banners, print materials and the like, raising brand awareness and (hopefully) increased sales and profits.
Does your local little league team need a new sponsor for kits, equipment, trophies or travel expenses? Or maybe there are bowling leagues, hockey teams and other non-profit organizations that can benefit from your sponsorship. A sponsorship is a great way to get involved with the community while providing financial support to a local team or organization at a grassroots level. Sponsorships work for small businesses because of the publicity they offer your company. In exchange for your financial support, your company or brand will be advertised on uniforms, banners, print materials and the like, raising brand awareness and (hopefully) increased sales and profits.
Giving back to the community is something we should all strive to do, whether as an individual or as a small business, and there are myriad ways to do that. What do you do to give back? Let us know in the comments below.
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