Giving Compass' Take:
- Julie Yamamoto shares five tips for donors interested in supporting small, local businesses and the benefits that come with bolstering these companies.
- How can you support small businesses, particularly those owned by people who are members of marginalized communities?
- Read about the potential of small businesses during COVID-19.
What is Giving Compass?
We connect donors to learning resources and ways to support community-led solutions. Learn more about us.
The business benefits of being a “socially good” company are clear. According to research by Deloitte, purpose-oriented companies grow three times faster on average than their competitors. Moreover, they report 30% higher levels of innovation and 40% greater employee retention.
While these rewards apply to all companies, small businesses are uniquely positioned to gain value from giving back to their communities. Donating to local causes allows a small business to boost brand awareness and community goodwill while making connections with potential customers and partners.
- Small business giving tip 1 – Make a local impact: Small businesses donate 250% more than larger businesses to local nonprofits and community causes.ii In fact, as shown in the chart below, the top three cause areas that small businesses give to are local charities, youth organizations and support for local first responders.
- Small business giving tip 2 – Give generously: Although it may seem like small businesses lack the resources to give as generously as large companies, the opposite is true. A Chronicle of Philanthropy survey of the 300 largest companies on the Fortune 500 list found that they typically gave about 1% of their profit to charity.iii By contrast, according to data compiled by SCORE, 75% of small businesses donate an average of 6% of their profits to charity annually.
- Small business giving tip 3 – Engage your employees: The most successful programs are employee driven. Ensuring that your staff is involved in your workplace giving program will help strengthen your ties to the community, boost morale and improve skills. In fact, 93% of employees who volunteer are happy with their employer.
- Small business giving tip 4 – Do your homework: As a small business, you may not have the internal resources for due diligence, but it’s a critical step. You want to make sure that you are complying with all the relevant laws and taking advantage of any tax breaks. For example, the CARES Act passed last year increased the limit on charitable deductions for corporations.
- Small business giving tip 5 – Simplify your launch: Bright Funds makes it easy to do good with an experience that your employees will love. You can set it up in less than a day with all the features you need to get your program going including.
Read the full article about philanthropy to small businesses by Julie Yamamoto at Bright Funds.