While assisting a worthy cause is the primary goal, it is critical that businesses understand and take advantage of the benefits of charitable donations such as tax savings and business growth. Buddy Buzzerd, executive director for UBS Financial Services Inc. in Mount Laurel, offers five key considerations related to your corporate giving strategy.
1. “Culture eats strategy for breakfast.” As stated by the great businessman, Peter Drucker, corporate culture is powerful, and donating at the corporate level can create a philanthropic culture. This is a great opportunity for team building. These programs increase the incentive for employees to donate and provide an opportunity for you to leverage the strength of your organization for a greater impact.
2. Save money by doing good. When your organization makes a charitable donation, there is a tax benefit associated. Where money would typically be subject to a corporate tax, you get the benefit of a pre-tax savings while the organization is gifted the full amount of the donation. Gifts are eligible for a tax deduction when you donate to a qualified charity, which is typically designated as a 501(c)(3).
3. Consider the networking benefits. Goodwill within the community opens doors to new business opportunities and offers a chance to get to know important members of the community.
4. Make an educated decision. As a business leader, corporate giving is a great way for you to make a decision to direct financial resources toward a cause about which you are passionate. However, all charities need to be properly vetted before donations are made.
5. Be cautious about long-term commitments. Businesses should be invested in their communities for the long-term, and it certainly sounds great to announce a commitment to specific organizations for five or more years. Another option would be to simply gift to the same organization on a yearly basis after evaluating the strength of your business for the same impact with mitigated risk.