As a business owner, you want to make sure that your employees and customers are happy and that you’re bringing about positive change in the world. One of the best ways to do this is by supporting charities and nonprofit organizations by donating money, time, and resources. With this in mind, remember that not all charities are created equal; some of them may provide better funding, more support, or bigger results than others. When choosing which charity to support, consider these four tips before you give your time and money away:
After identifying a cause that resonates with you, consider what type of charity is best. There are a variety of charitable types ranging from ones that require a donation on your part, to those that provide for more hands-on involvement. Which one is right for you? It will depend on your goals, available time, and skill sets. Whatever route you choose, make sure it’s tax-deductible as some charities don’t qualify as non-profits under IRS rules.
As you look for corporate donation opportunities, you should focus your giving on charities that have a higher retention rate. Donor retention is defined as the percentage of donors who contribute to a charity in a given year and then give again in a subsequent year. The chart below outlines donor retention rates by sector, as calculated from IRS Form 990 filings. In other words, if your company gives to one of these charities, you can expect to see those individuals donate again roughly two years later.
It’s important to do your research before writing a check to a charitable organization, especially if you’re going to be doing it on behalf of your business. Find out how long they’ve been in operation, who their leaders are and what their finances look like. Look at how much money they spend on overhead and administrative costs versus providing services or buying items that go directly to those in need. Avoid organizations that have a history of financial mismanagement or corruption.
As you research the right charities, consider the type of donation you’d like to give. Recurring donations are, in some ways, easier for a company to manage. With recurring donations, you’re giving money consistently to an organization you support and value, knowing your continued support is making a real difference.
In your efforts to be altruistic, make sure your resources are going to the right charity. Use this guide in your selection process as you find the right non-profit to donate to.
Meghan Belnap is a freelance writer who enjoys spending time with her family. She loves being outdoors and researching new topics that help to expand her horizons. You can often find her buried in a good book or out looking for an adventure. You can connect with her on Facebook right here and Twitter right here.