How To | December 3, 2021

The surprising ways charitable giving benefits businesses

Find out how to connect with your customers, clients, and employees through kindness and generosity. 

Have you considered charitable giving as part of your business strategy? All entrepreneurs can be part of a giving movement that will have benefits for businesses, employees, and customers or clients. 

Most entrepreneurs are looking to create change in the world, often that is reflected in the products or services they are selling which also fulfil existing needs. If you dig a bit deeper as an entrepreneur, there is also a purpose or a reason “why” you have chosen to create a business that generates profit. That purpose can be reflected in a charitable giving strategy. 

Work cultures and employee priorities have shifted. Now, many employees expect their workplaces to offer some form of corporate social responsibility programs. 

Generosity as a statement of values

According to a 2018 survey, companies that engage in charitable giving and support communities at a strategic level—rather than in one-off donations here and there—access major benefits. These organizations are more able to draw talent, support retention, and increase employment satisfaction

The survey found, among employees who believe their company is highly committed to community, 84% are extremely or very satisfied with their job compared to 46% of others. Employers perceived community engagement as effective in brand awareness (84%) and in generating new business (61%). 

New business due to charitable initiatives is likely going to connect to customers aligned with an organization’s values.

Community initiatives are memorable: they create stories that can be shared both within and outside of the organization. Brand awareness and new business generation is a natural bi-product of charitable giving and community support. Moreover, the new business due to charitable initiatives is likely going to connect to customers already aligned with an organization’s values. 

A connection to customer loyalty

On the customer-facing side, many people are looking to know companies’ stances on issues important to them. Charitable giving can help establish connections and build buyer loyalty.

When I am connected with companies—for instance, by following them on social media—I see what they’re focused on and what they are up to. By getting to know over time their values and the causes they support, I feel closer to certain businesses. It brings an extra level of comfort, should I choose to buy from or work with them in the future.

Compassion as a company culture

Giving is good for everyone, meaning it has proven wellness benefits and can even extend your lifetime. These benefits are especially potent when your giving aligns with your interests and passions, enabling you to understand the impact of your more magnanimous actions. 

Kindness is contagious. Adding an element of generosity to your company culture can spread into other areas of the organization. Giving charitably can be just the start, with compassion continuing as an underlying support for many aspects of your company’s operations. 

For example, cultivating an internal culture of empathy (which could mean wellness check-ins or more flexible work arrangements) can lead to innovation and better employee engagement performance. Whereas, uncaring work environments can understandably reduce collaboration and increase stress. 

Empathy may be particularly important today given the mental health concerns facing many people during the pandemic. 

Benefits of DAFs for optimizing giving

Donor-advised funds (DAFs) are an especially useful philanthropic tool for companies and businesses because of their flexibility. Employers can facilitate donation matching and they can contribute to charities, or enable their own employees to decide where to give by sending them charitable dollars.

Through a DAF, like Charitable Impact: 

  • Individuals and companies can access immediate tax receipts for their contributions and then take time to craft their giving strategies. 
  • Companies can access charitable tax credits up to 75% of net income (mirroring the credits of up to 75% of personal income available to individuals). 
  • Business owners can give non-cash assets to be processed by a DAF and then fund their charitable pursuits over time. Note: Giving publicly traded securities is the most tax-effective way to give. 

As a sole proprietorship or partnership, you can claim donations as a part of your individual tax return and be eligible for non-refundable tax credit of up to about 50% of your donation, depending on your province of residence. If you have a spouse or common-law partner, you can pool your donations together to optimize the amount you are getting back.

For both individuals and corporations: if you have reached the limit of giving for the year (again, 75% of your net income), you can carry forward unused donation tax credits within the subsequent 5 years. This way you are able to take full advantage of the credits when they are most lucrative.

One thing to be certain of is that you are giving to a qualified donee to obtain an official donation receipt. The beautiful thing about giving with Charitable Impact is that they take care of the donation receipt from the get-go, so you can focus on managing the donor-advised fund as you wish.

Charitable Impact provides a fee-free option for companies to send employees charitable dollars to give how they want. You can also schedule gifts as a really practical way to streamline giving for the holidays or for other occasions. Interested in setting up a matching program? Let Charitable Impact know.

Case study: Giving to suit employee individuality 

No matter your industry, company-wide charitable giving can give to a diverse and individualized range of causes—especially with a DAF. Capital Power is a thermal and renewable energy company that has been working with Charitable Impact for many years on their giving strategy. 

The company based in Edmonton runs donation matching campaigns centred on charities selected for specific causes. They also match employee contributions up to $500 per year in their own Impact Accounts to give as they please.

“When something comes up, our employees have a giving savings account they can access.”

“We like the idea that the platform offers a more thoughtful approach to giving, including budgeting giving throughout the year by giving a little bit every month, adding to your account, and watching your giving balance grow,” said Murphy. “When something comes up, like a charitable need or a new interest, our employees have giving savings accounts they can access.”

Feedback from Capital Power employees has been really positive and they are able to shape the community’s giving priorities. The company also has access to anonymized data about where employees are giving the most. 

“We have employees who were already strong donors to the charities that they are personally passionate about. Having the matching opportunity from Capital Power strengthens their connection to the company and it’s great for them to see that Capital Power supports what they support,” said Murphy. 

Giving is for everyone

While corporate philanthropy might be seen as something larger organizations do, there are solutions that are customizable to your small business.  

  • Charitable giving can be incorporated into client gifting, using a platform like Charitable Impact. By sending them through the platform, a small business can gift charitable funds to clients for them to give to causes they care about.
  • Organize a campaign using email marketing or social media to collectively raise money for a cause that the small business cares about. You can use your Charitable Impact Account to set up a Giving Group to rally others around a cause.
  • Volunteer your time as a small business owner, and share stories from the volunteering experience with clients and community.

Giving goes beyond good PR to communicate company values. It is a way to engage with your communities, build a bigger change, and show commitment beyond profit. You can take steps to get started today. 

 

This is a guest blog post by Jami Monte, Chartered Professional Accountant and founder of Bookkeeping Bootcamp.

In her years working as a tax accountant, Jami saw many self-employed people who struggled with both filing taxes and understanding their business finances. She now dedicates her time solely to helping entrepreneurs to feel confident in their finances and improve their profitability using the power of bookkeeping.  

You can follow her on Instagram and Facebook at @montecpa.

FAQs: Here are a few questions about charitable giving we often receive from businesses

What are the fees related to adding money to a company’s Impact Account?

We have fee-free options. For example, employers can contribute to their Impact Accounts via cheque, direct debit (for deposits of $1K or more), or wire transfer (for deposits of $5k or more). You can speak directly with the Charitable Impact team to arrange the option that works best for your company or organization’s strategic giving goals.

How can charitable dollars be sent to employees and clients? 

From an Impact Account, employers can easily send charitable dollars to employees, clients, and others. It is possible to schedule regular gifts (you can even schedule for special occasions and events, like birthdays, work anniversaries, or holidays). 

What happens if employees or clients don’t accept their charitable dollars? 

To accept gifts of charitable dollars, individual recipients need to open their own Impact Accounts. Recipients are notified via email when they receive the gift and 7 days after the initial notification. In the case of an employer or other recipient of charitable dollars not claiming their gift, Impact Account owners are notified 14 days after their gift has been sent.

After 30 days, the gift of charitable dollars will be returned to the sender’s Impact Account. Charitable Impact will provide a notification to the sender about the charitable dollars being returned.  

Does the gift include our company logo?

Companies have the option to write personalized messages to their employees, which can include your logo.

If you have any further questions about giving for your business, company, or organization, reach out to talk to someone on our team!

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