The local school athletic department asks for a donation for a silent auction. There is a 5K race in town and they want you to be a sponsor. The animal shelter needs funds for building improvements. All over town, there are charitable organizations and schools that need your monetary assistance.
The list could go on and on…
As a small business owner, you are the backbone of your community, and you have pride in where you live and work. But that also means you probably get asked for donations on a regular basis. You feel bad saying no, but you could not possibly give to every single charitable organization and stay afloat as a business.
So what do you do?
Step 1: Create a Donation Policy for Best Results
Does the donation ask align with your mission? Come up with two or three charitable tenants that are important to you: the environment, animals, cancer research, and schools, as examples. Here is a sample policy you could put together:
[Name of business] is dedicated to bettering our community. Our business specifically contributes to organizations involved with [x, y, and z]. We are happy to partner with you and your charitable organization if your involvement falls into one of those categories.
Create something simple, but concrete, so people know what your mission is and the kinds of organizations you want to support. Having this policy in place will help you keep track of where your donations are going and you won’t feel as much pressure to give to everyone who asks.
Step 2: Set Aside a Certain Amount Each Year to Stay on Budget
Every good business should have a budget and you should know where your money is going. You can set aside a fixed amount each year, or a percentage of the previous year’s profits. This way, you know exactly how much you have to spend on donations, just like any other facet of your business. Charitable giving may also be tax deductible (but it is always advised to check with a tax professional to make sure).
Step 3: Don’t Say No, or Yes, Right Away
Instead say, “I’m happy to consider it” and have a form ready for them to fill out. This is why creating a policy is so important. Yes, you want to give back, but you also want to make sure your money is going to good use.
Make sure your donation policy is on the form, and if you do not feel that you can give at that time, you can use your policy and the form they fill out to cite why. On the form, along with the vital information such as name, type of organization, contact, you can have questions such as:
- Here is our donation policy. How does your organization align with our policy?
- How much are you asking for?
- What percentage of donations will go directly to the charity?
Do not forget, donations do not always have to be in the form of money. While you may not be able to give financially, you can give your time, collect donations from customers and offer a percentage off to patrons for donating goods, or create an employee team building event around giving back to the community. You can also work with organizations to provide your service to them and their audience, giving them a portion of the profits raised.
We all want to save the world and help as much as we can, but you cannot have a successful business if you are giving away all your profit. You do not need to give to every single organization that asks; donate to projects and events that align with your business and are important to you. Having a clear policy on donations and money set aside will take the stress out of donating.
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