Learn ways that a company can give back to the community
Q: How do I add a philanthropic aspect to my business?
A: Many business owners choose to pursue philanthropy in addition to their commercial goals. Businesses can advance their charitable interests in many ways.
Some businesses give a portion of their profits to charitable projects. For example, Target donates money to local needs as well as to national charities, such as Feeding America and St. Jude Hospital. Target also offers grants for school field trips and soccer programs. These programs raise Target’s community profile.
Businesses may promote employee volunteerism. The company could provide paid time off to work on charitable activities, or match employee donations to nonprofits. 3M’s program matches employee donations, as well as donating to organizations where employees volunteer. The employees choose the charity, and 3M boosts that employee’s impact. Or businesses could choose a project and invite employee-volunteers.
Some companies form a separate charitable foundation. Corporate foundations are funded by the company and often focus on aligned causes. Locally, Andersen Windows created the Andersen Corporate Foundation in 1941, with over $60 million in grants made to date. The foundation supports affordable housing and other causes.
Many smaller businesses contribute skills and resources rather than money. A stylist might give haircuts to people in homeless shelters, for instance. In-kind donations can be an effective contribution. Bombas donates a pair of socks for each pair sold. In these ways, a business can have an equal—or even greater—impact than straightforward financial contributions.
Any type of business may take action. If your company’s mission centers on philanthropy, though, you may want to consider converting the business to a nonprofit. Alternatively, a company can become a public benefit corporation, which allows the business to prioritize social or environment concerns along with other business goals.
Philanthropy offers many potential benefits. Financial contributions may be tax deductible. Charitable projects tend to improve employee morale. Focused projects can improve the local community, making a more welcoming environment for the business and its staff. Giving can also boost marketing efforts through sponsorships and public relations. Often, people prefer a philanthropic business to a less charitable competitor.
Remember that these activities can have tax and legal effects. Consult with an accountant and attorney before choosing a sustainable and effective philanthropic path.
Stacey Supina is on faculty in the ethics and business law department at the University of St. Thomas Opus College of Business.
This article originally appeared in the Star Tribune on October 18, 2019. Used by kind permission of the Star Tribune.