How Participating in Philanthropy Can Positively Affect Your Business

Now, more than ever, startups and business owners are looking to incorporate charitable giving and philanthropy into their business models. Rather than viewing charitable giving as a drop in profits, businesses are reframing philanthropy as a benefit to their companies rather than a loss.

The logical beginning to your charitable endeavors is to select an organization that you want to support. At a loss when it comes to choosing and organization? Chances are, your employees are already involved with charitable and non-profit organizations in their daily lives. Give your employees opportunities to share what causes they’re passionate about, where they already volunteer, or where they give donations. While it might not be feasible to give to every one of these charities, it’ll give you a good base list to work from. This also gives you insight into the social networks that your employees have that can be leveraged into charitable partnerships.

Aligning Charitable Organization with Your Business Model

Likewise, it makes the most sense to choose organizations that align with your business model or products. Own a tech startup? Look into supporting organizations that offer free coding lessons to underprivileged youth. Market fitness products? Look into public and community health organizations that put on events in your area.

The closer and more apparent the tie is between your startup and the organization(s) that you select, the easier it is to market and explain your positions. You can also make the executive decision to choose an organization that is meaningful to you and incorporate this organization into your startup model from a top-down approach, rather than sourcing ideas from your employees. The choice is yours, though participation rates will likely be higher when your team has a say in the organizations that the company ultimately supports.

It would be wise to tailor your giving and philanthropic efforts to organizations that work directly in the area, city, or country that your startup is based in. Establishing roots and connections in and around your locale embeds you in the community and provides you with opportunities to use your time and talents, rather than just your money.

This also gives your employees opportunities to engage in their communities, encourage team building through shared volunteering and gives employees and leaders opportunities to build relationships outside of the office. In fact, employees that feel more engaged with their team and their communities are less likely to leave the business or report experiencing burn out.

I urge you to seek out small and medium size organizations to support, rather than the brand-name philanthropies that nearly all of us are familiar with. While organizations like the American Cancer Society or UNICEF do phenomenal work, your time, talent, and resources can have more of an impact in a smaller organization. In these small organizations, you can see the impact that your team is making and you can build relationships and partnerships that have space to grow over time.

There are a number of ways that you can become involved with the organizations that you choose. Beyond making an annual gift, or holding a yearly day of service for your team, you can commit a percentage of your profits to a cause, partner with organizations, sponsor events, and fundraisers, match your employees giving, or make recurrent gifts. In fact, we’re seeing more companies that consistently dedicate a percentage of their profits to a specific cause year round.

Finding the charitable giving model that works best for your startup might need to be a more flexible process in the beginning. Philanthropic trial and error is encouraged. Try a number of different methods and collect feedback from your participants about what they enjoyed and what they didn’t.

Charitable giving can happen in any number of ways, but you have to make an effort to instill philanthropy as a part of your business. Building a philanthropic business model not only opens you up to potential tax breaks, it also makes you look socially responsible to your stakeholders and consumers. Corporate Social Responsibility has become a big talking point in the past few years, and for good reason. Consumers tend to identify more strongly with companies that they view as positive influences in their communities or in the world.

Share the Story

No good deed goes unnoticed, especially when you tell others about it. Don’t hesitate to let your customers know that you are making charity an integral part of your business model. It might feel odd, after all, we’re taught that charity should be a benevolent act from the goodness of our hearts. And it is, but you don’t have to reject the capitalistic benefits that come along with corporate giving. Share the story behind your decision and tell your customers why this particular cause or organization is close to your startup’s heart.

Marketing yourself as a charitable and ethically conscious business can positively impact your bottom line, encourage employee retention, and build stronger consumer loyalty.

Choose Wisely

Keep in mind that some non-profit organizations might trigger a backlash from your stakeholders or your consumers. Unfortunately, where you give your time and money becomes a reflection of what your startup is all about. For instance, giving publicly to a pro-gun organization will shape the public’s perception of you, just as donations to a pro-choice organizations will. It may be wise to avoid organizations that are morally or ethically charged, especially those that are currently the subject of public scrutiny.

While you and many of your employees may feel strongly about supporting some of these organizations, it would be best to give and volunteer on your own time rather than associate it with the startup’s name.

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