Rose Report: Issue 26

‘Tis the Season for Giving Back

issue-26-pic-story4One of the most rewarding and beneficial ways to strengthen your company on the inside and out is to participate in charitable activities. It’s a great way to get employees to bond as a team in a non-office environment while boosting the company’s image and values. It can help enhance an organization’s reputation, build upon its networks and even drive sales based on increased name recognition.

According to the Nielsen Global Survey on Corporate Social Responsibility, 55 percent of global online consumers across 60 countries would pay more for products and services provided by companies committed to positive social and environment impact. Not only that, younger job candidates are more attracted to companies that embody social responsibility in its corporate culture. It also builds office morale and retains employees, all while helping the community.

There are plenty of ways for a company to be involved philanthropically, ranging from collecting donations, sponsoring an event, or having employees roll up their sleeves and participate in-person.

It’s important to choose the right cause to support before diving in. Often it helps for the cause to coincide with what the company does. For example, a tech company could support a nonprofit that donates computers to schools. A healthcare company could sponsor a charity race that’s supporting research for a particular disease. However, if the company is located in an area where an issue or event is particularly relevant, for example, a clean-up after a natural disaster, it can choose to sponsor that cause as well. Recognizing your own employees’ personal causes is important, too, and can be acknowledged by offering to match donations or encourage people to volunteer their time during work hours.

Launching a nonprofit associated with the company is another option for businesses that have specific goals in mind. A nonprofit sub-entity would be set up as a section 501(c)(3) tax exemption organization, and would need to be treated completely separately, with its own record-keeping, bank account and accounting books. It’s also strongly advisable to keep separate governing boards, although some of the members can overlap. This helps focus the purpose of the nonprofit strictly on its activities and mission, without getting mixed up with the for-profit. The nonprofit can be set up as either a private foundation or a public charity. A private foundation is managed and funded by a small group of people and are subject to various operating restrictions because they tend to receive less public scrutiny. A public charity, however, receives much of its funding from a larger number of people and government organizations.

There are also some tax benefits for charitable donations. The business may deduct cash contributions, property or equipment donations, and mileage from driving to and from the charitable work or event. The costs spent on a fundraiser or event can also be deducted. If you’re the sole proprietor, you would take these deductions as an individual on your personal taxes. But most of all, the biggest benefit is being able to give back to the community that made your business possible.