How giving back to the community can elevate your brand and help grow your small business
Every day, more and more people step up to contribute to charities on an individual and corporate level. The reason is simple: Consumers care about making a difference. And research shows that their desire to do so affects where and how they choose to make their purchases, making philanthropy a powerful business tool. How your brand approaches giving back can make a big impact on your popularity, and profitability.
U.S. businesses donated over $21 billion dollars to charity last year.
Not every — in fact, not even many — small business owners can afford to be so generous with monetary donations. And you shouldn’t feel like you have to. But there are several benefits to adding a charitable element to your business, so it’s certainly worth considering. And giving away money isn’t the only way to get involved.
In this blog, we will walk you through some examples of businesses that benefit big from their philanthropy. And we’ll show you some practical ways a small business can take action, including choosing the right cause for your business, partnering with organizations and getting your employees involved.
How small businesses can benefit from charitable giving
Giving back is not all about feeling good, looking good and boosting sales. There are many other ways that charitable giving can benefit your business — here are three to start.
It’s good for brand loyalty
People are more likely to visit a new business when they know a charitable element is involved. The data doesn’t lie: Philanthropy is something consumers want brands they support to be involved in. And when you give consumers what they want, you’re far more likely to win their loyalty. If you don’t, well, you run the risk of losing them.
It helps attract and retain employees
Not only does philanthropy drive business and brand loyalty, it’s also very attractive to potential hires: 79% of employees feel happier when they work for companies they consider socially responsible, and 50% of millennials say they accepted a job offer based on the company's charitable works. So both your application and retention rates can get a boost when you add and promote a charitable initiative.
It’s rewarding at tax time
Finally, charitable contributions from businesses often qualify for tax deductions, which means more money in your pocket at the end of the year. Talk with your financial or tax advisor to see if you can be eligible for this benefit, and learn more about tax deductions for charity here.
Learn from these philanthropy champions
How are other national brands getting involved with corporate giving? Let’s look at some inspiring charitable giving business models.
REI helps make outdoor recreation accessible
Outdoor gear retailer REI has spent several years investing in meaningful and on-brand initiatives. The REI cooperative action fund provides monetary donations for communities with little access to safe outdoor spaces and helps them build accessible recreation areas. This fund is a community-supported public charity, relying on individual donors and grants to advance their cause.
Not only does the fund perfectly suit REI’s company values (its slogan is “time outside is a human right”), but it creates a positive cycle of results. Their work in these communities creates more customer demand by supporting the activities that require REI’s products. So even though the company is “giving away” money, it has strong potential to bring in more sales over time.
Plus, it’s a great marketing tactic. People who might have shopped at other outdoor gear shops are now more likely to buy from REI, knowing their purchase supports a good cause. That makes it a win-win…win.
STIK directly hires women in need of good wages
STIK is a female-owned and operated company that employs women in Peru to handcraft their knitted products. From the creation of the product to the opening of the package, STIK works directly with people in need and promotes sustainability. STIK provides its employees (primarily mothers) with a well-paying wage and the opportunity to work from home and be with their families. They also donate bags of yarn and provide knitting tutorials (Knit Kits) to young adults undergoing cancer treatment.
STIK got creative by directly supporting charitable causes without just writing checks. This sets them apart from other handmade clothing brands and gives consumers confidence that their money will go to a good place.
TOMS gives away a third of their profits
TOMS is a strong leader in the corporate philanthropy movement. It may even be the first name that comes to mind when people think about charitable retailers.
Since they were founded in 2006, Toms has directly associated their brand with giving back through their One for One shoe model (giving away one pair of shoes for every pair purchased). Today, they continue to do so by donating a third of their profits. Starting their business with this charity mindset was a strong marketing strategy. It made them stand apart from other shoe retailers and appealed to consumers’ generosity — giving them a sense of pride whenever they bought a pair. Between that and TOMS’ frequent new releases (and even collaborations with other brands), it wasn’t hard to cultivate a loyal consumer base.
There are countless other businesses out there who are successfully building a reputation as a charitable brand. Reading about their various approaches and results will help you find the right philanthropy model for your business. So take time to do some research and get inspired.
Types of corporate giving models
“Money is not the only commodity that is fun to give. We can give time, we can give our expertise, we can give our love, or simply give a smile. What does that cost? The point is, none of us can ever run out of something worthwhile to give.”
It’s great to learn from larger corporations and their successful philanthropy campaigns, but what does incorporating charity into your small business look like in practice? Aside from the ever-popular and tax-friendly lump sum financial donation, there are endless ways to give back. Here are a few ways to get creative with your giving without going broke.
Incorporate a pay-it-forward program
Pay-it-forward programs are a great way to put the power in the hands of the consumer and encourage them to be micro-philanthropists themselves. Pay-it-forward means that the customer can spend extra to provide a product or service to someone in need. For example, if you own a restaurant and sell a meal for $10, the guest can be given the option to spend an additional $10 and give the same meal away. This is an excellent option for businesses trying to save money, because the consumer matches the cost.
Start clothing and food drives
Clothing or food drives are also easy ways to test the waters of philanthropy without a significant financial investment. Simply find a local organization to work with and organize a time to bring them the donations (most will even come to pick them up). If you own a food service business, check out Feeding America. They have an interactive map to quickly find a donation site in your area, and Ample Harvest is a great resource for gardening and farming businesses.
If choosing a food drive, make sure that your customers/donors are aware that the food must be shelf-stable and within the expiration date. If you have fridge space in your business, consider incorporating fresh foods as well. Give the charity a call so that you can be aware of their current needs and they can be prepared to receive the donations. Clothing and food drives can be low-cost and highly effective ways to market your business and build a positive reputation with your customers and the local community.
Donate leftover food
If you own a restaurant or food service business and have unsold fresh food at the end of the day, you can organize for a donation site to come pick it up. Not only will you provide food to people in need, but it is also an environmentally friendly, free and sustainable choice.
Establish a community garden
Starting a community garden requires time and your own outdoor space, but it can be a fantastic way to support your neighborhood and build relationships with the people around you. Get a team of employees together to start planning, and check out the agriculture guidelines for your city before getting started. Partnering with a horticultural society in your area is also a great way to support your garden while sowing the seeds of professional relationships (see what we did there?). So roll up your sleeves and get your hands dirty — the results can be bountiful and sustainable over a long period of time.
Sponsor charities and events
Sponsorships are a great way to advertise your business while helping people raise money. You can sponsor a single fundraising event, where in return — at the very least — you’ll be listed as a contributor. Or, you can even sponsor a non-profit. For example, some animal shelters will let you sponsor a specific animal (plus, this is sure to get you social media clicks when posts about the animal circulate with your name attached — who could resist?). There are lots of sponsorship options, so it's a good idea to narrow ideas down to organizations that highlight your product or service in some way.
Provide gift cards or products to fundraising events and drives
If you’ve been in business for a while, you may have noticed frequent donation requests from customers or other community members. People often solicit local businesses to contribute to raffles, auctions or even gift bags for fundraising events. It’s a good idea to pay attention to these requests, but be sure to consider the intended audience. If enough attendees feel like your target customer, it’s another win-win: a great marketing opportunity and a way to support a worthwhile cause. Feel free to work with the requestor to provide an item that makes sense for you both. A gift card to your business can be a great option, especially when you consider that people often spend more than the card's value, so you will be able to reel in some more sales this way too.
In fact, 65% of people who get gift cards spend more than the amount on the card.
Donate a portion of proceeds
Another option is to have a “portion of the proceeds” day at your business. You simply pick a cause to support for that day, then let customers know that a portion of their bill will go to support that cause. Making an event out of this is a great way to keep it interactive and bring in extra business. Advertise well in advance and prepare to have a bigger crowd than usual — people love to know that their purchase is supporting a good cause.
Give employees paid volunteer hours
Employee engagement can bring energy and momentum to your charitable action. Consider giving your employees paid volunteer time with the organization you’re working with, or a charitable organization of their choice. This type of community involvement boosts team morale and allows you to see how the organization works first-hand. Volunteer work also provides excellent content to share on social media and your website.
Collaborate with other brands
Brand collaboration with a charity-focused brand can boost your PR and consumer awareness of your company.
For example, popular retailer Crate & Barrel partnered with DonorsChoose, a fundraising non-profit that supports teachers needing classroom supplies. Crate & Barrel gave their customers gift cards to spend on the DonorsChoose website, allowing them to support a classroom of their choice.
This raised awareness for DonorsChoose and drove traffic and funds to their website while boosting Crate & Barrel’s reputation with their customers. DonorsChoose founder Charles Best recently visited us in The Entrepreneur’s Studio, and said, “That Crate & Barrel partnership meant that thousands and thousands of people were coming to DonorsChoose to spend the gift card that Crate & Barrel had just given them.”
It was an effective marketing tactic for Crate & Barrel because it associated them with a charitable foundation and earned them and DonorsChoose a place in The Wall Street Journal. You can learn more about DonorsChoose and Crate & Barrel’s success by listening to Best’s episode on The Entrepreneur’s Studio podcast (powered by Heartland).
How to become a charitable business without hurting your bottom line
Ready to take action and start incorporating charity into your business? The options might seem overwhelming but don’t worry. We’re here to help. Here are some practical ways a small business can start growing and helping the community.
Choose a cause that aligns with your mission
Like REI, STIK or TOMS, choosing a cause to support shouldn’t be random. Selecting a business model that matches your “why” is essential. Take your time to research charitable causes and non-profits that align with the types of products or services you sell and the values of your company in order to bring more awareness to your brand.
Think about the social issues and charity needs your business can address directly. You can read up on popular industries and nonprofit organizations that companies have donated to in the past, or simply follow an idea that aligns with your personal and business values.
For example, if you run an auto shop, consider checking out some local charities that provide vehicles to people needing transportation. If you own a restaurant, maybe partner with a local food bank. You could take many directions, so spend some time brainstorming and be creative!
After settling on a cause, continue your research to find the right organizations to partner with. Use this as an opportunity to build connections and validate your ideas to ensure they will be beneficial. Also, make sure whoever you work with has clear expectations of what you’ll be providing, so everyone involved is on the same page.
Test your strategy
Have an idea? It’s good to do a test run on a smaller scale before officially launching. For example, if you want to start a pay-it-forward program at your restaurant, start by offering it for one menu item or dollar amount. Once you start seeing interest from your customers, you can expand it to your entire menu or different restaurant locations. Keep detailed notes throughout this process to remember what works and what doesn't.
Advertise to promote your cause or event
When you have your charity plan and all the finishing touches in place, it's time to tell the world. Post about your contributions on social media to start building up a reputation and enjoy the benefits of some good PR. Your involvement will encourage others to give back and work with you or other charitable organizations.
Show up and support your cause in person
Look for opportunities in your community to speak at events or simply show up to be a face for your company and the charity it supports. Being physically present helps show people that you care about partnerships and leaves a lasting positive impact.
Help others get involved
After you get your philanthropy program moving, consider bringing in other companies and mentoring other business owners to do the same. Creating a group of business owners who give back will show your community that you care and mean what you say. You can also team up to support a larger cause, getting your brand name out there even more.
“No one has ever become poor by giving.”
How Heartland gives back
Here at Heartland, we take our corporate social responsibility seriously. We partner with local organizations like Restore OKC and Oklahoma Center for Nonprofits to give back to the community, benefit our business and provide employees with volunteer opportunities. Learn more about the steps we take to engage in philanthropy as a business.
However you choose to get your business involved in philanthropy, we are here to help you along the way. Supporting a good cause and helping your business grow is what we do best, after all.
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