Best Tips for Business Donations to Charity

Your business can create a simple act of kindness that benefits the community and helps your brand build goodwill. Corporate philanthropy is the act of a corporation or business promoting the welfare of others, generally through charitable donations of funds or time. Donating to nonprofits helps the charity of course, but the impacts of giving to charity and how it helps your community and your business are invaluable.

Sadly, contributions by U.S. companies fell 6.1% in 2020 to $16.66 Billion (a decline of 7.3% when adjusted for inflation) during the pandemic, while individual donations increased. This is largely blamed on the economics of the pandemic in 2020, as personal savings rates skyrocketed, while corporate profits were down 5.1% in 2020. 

On average, corporations donate less than 1% of their profits to charity. American Express and The Chronicle of Philanthropy recently conducted a study that found small companies donate an average of 6% of their profits each year. American households donated 2-3% of their income to charities over the same period. Many would like to see corporations increase their donations to match what the typical American gives each year.

WHY DOES MY BUSINESS NEED TO STEP UP?

A study from the Chronicle of Philanthropy says declining levels of trust among Americans for most institutions and each other may also contribute to the move away from charitable giving. Most of the distrust lies along the same division lines in American society today. That mistrust is especially pronounced among Gen-Z and millennials, which could cause another layer of challenges for charitable organizations. An example of this would be Saint Jude’s Children’s Research Hospital, which raised $2 billion in 2020, making it the third most contributed charity in the United States. Yet, only half of what St. Jude raised over the last five years went to research or patient care. Thirty percent went to cover fundraising costs. Allocations like these cast doubt in donors’ minds about the true impact of their gift. 

How much money Americans make also plays into the reduction in charitable donations. Four out of five households with an income of $200,000 or more contributed to a nonprofit. On the opposite end of the spectrum, less than three in five households with an income of $50,000 made a charitable donation in 2020.

In addition to helping fill in the gaps for your local nonprofits, there are other benefits for your business including building goodwill in your local community, improving the morale and company culture of your organization, promoting charities that match your values as a company, and building up your network. 

WHERE DO I START WITH CHARITABLE GIVING?

Volunteer: Instead of a monetary donation, companies can donate their time to a great cause. Volunteer as a company at a soup kitchen, charity run or homeless shelter. With volunteer support initiatives, companies partner their employees with nonprofits to provide specialized support only that company can provide. 

Sponsor a sports team: Youth organizations are always looking for businesses to sponsor their teams. Donate funds towards field upkeep and uniforms. Companies that sponsor teams can have their names displayed on uniforms or field signs.

Launch a charity drive: Start a collection for a particular cause. Your company can collect non-perishable food items for distribution at food banks. Toy drives are popular around the holidays.

Technical Assistance: Do you operate with professionals who could donate their skills and time to help non profit organizations get a leg up on technology, web and IT services, or graphic design. You can’t claim this as a deduction, but it’s an invaluable donation to many groups.

Donate online: Set up automatic donations through virtual giving platforms. Donors that set up some sort of recurring monthly donation give 42% more than one-time givers, claims Nonprofit Source. You could even leave out a collection jar at your place of business and cash in the collected amount to send through an online portal.

Create A Giving Culture: Collective participation in philanthropy engages employees with each other. Companies with engaged employees who enjoy their jobs outperform companies with disengaged workers by up to 202%! You can match employee contributions to their favorite charities. Employee grant stipends are also a way to not only encourage giving, but to create an added benefit to employees and their well being. An example is The Coca-Cola Company, which offers a $20,000 employee matching opportunity, and Walmart, who provides $250 to employees for 25 volunteer hours.

WHAT CAN I DEDUCT?

Studies show that donating to nonprofit organizations just to get a tax break are few and far between. Business deductions for charitable contributions may be limited, and the deductions may only be deductible for the individual owners rather than the business itself. Every business type, with the exception of traditional C corporations, pays taxes as a “pass-through” entity. This means the business’s taxes are passed along to the company’s individual owners.

The IRS website reads, “In general, contributions to charitable organizations may be deducted up to 50% of adjusted gross income computed without regard to net operating loss carrybacks.” New laws now permit C corporations to apply an increased corporate limit of 25% of taxable income for charitable cash contributions made to eligible charities during calendar year 2021. The increased limit is not automatic. C corporations must choose the increased corporate limit on a contribution-by-contribution basis.

It’s important to start by verifying whether you can claim a deduction for a donation to a charity. In order to claim as a deduction, only donations to 501(c)(3) organizations qualify, and a donation to an individual person or any other 501(c) designated non-profit is typically not tax-deductible.

If donating to a new charity this year, be sure to ask to see the business’s letter from the IRS that designates them as a tax-exempt organization. You can also search using the IRS Exempt Organizations Select Check online tool to verify whether the charity is or is not eligible for a deduction.

Don’t make it so that you’re donating to receive a benefit of any type (e.g.. donations to a raffle don’t qualify because you could win a prize in return). As mentioned above, you can’t create a donation based on time and services provided and your meal and entertainment expenses don’t qualify.

You can only deduct mileage if you were not traveling to the destination for any other reason. You cannot deduct your time or the time of your employees who are volunteering for a charitable organization. Gifts and/or donations to political parties, organizations, candidates, or particular individuals, are not recognized as tax-deductible by the IRS.

Do not take this as professional tax advice. It’s not a bad idea to speak with financial experts for advice on how to donate to charity in a way that makes sense for your business.

What is Antiwork? (and why you need to embrace it)

Tune out the noise and depravity and try to reach those who are making it.

If The Great Resignation gave you heartburn, antiwork may cause a coronary. It doesn’t have a positive ring to it for a reason. Antiwork is a “movement” that has gained momentum in the last several years as a community on the social media platform Reddit. It now boasts 1.7 million followers in its community and was the fastest growing community on Reddit in January 2022.

In short, r/antiwork seems to be against just about everything including getting out of bed in the morning, especially when it comes to having a job. The forum says that work is pointless and humiliating. If you’re an employer, this is a mind-numbing journey down the rabbit hole of madness. But don’t lose sight of the forest in the trees.

Gen-Z and Millennials are consistently blamed for the labor shortage. r/antiwork is also taking its fair share of blame. The community isn’t defined by any political ideology that may exist on Reddit. The founders “simply” argue for a utopian employment system that deprioritizes output and/or production. “Unemployment for all, not just the rich!” That’s the catchphrase of r/antiwork. Sounds fair.

On January 25th, Fox News interviewed the moderator or “mod” of the community, Doreen Ford. It did not go well. It went so poorly, in fact, that the community retreated to a private sub-reddit, and Ford was terminated as moderator of the forum. This may be the smoking gun that proves the community was fan-fiction and under blistering cross-examination, not a serious movement that has any lasting impact.

But, where do the misguided go now?

If you’re unfamiliar with Reddit, it is a network of communities each with their own front pages. Reddit is sometimes referred to as “The Front Page of the Internet” and is the tenth most popular social network. It’s demographics skew young and male. 36% percent of adults 18-29, and 22% of adults 30-49 use Reddit regularly. Just under half have a college degree. Almost all have a high school diploma. They’re venting anonymously against all the forces of life pushing in on them: student debt, housing, wages, inflation. They’re not all lazy, and not against having a job, even if the loudest comments say otherwise. They just want to feel some positive momentum. They’ve seen the rich get richer, while they themselves have not.

You’ve increased wages, reduced overtime, offered more flexibility, and improved your workplace culture since the pandemic took hold. What more can you do? Weirdly, why not embrace r/antiwork…or at least the platform choice of the youth who have recently guided toward their beliefs before they went underground. (again)

Manufacturers should create pathways to tomorrow’s jobs today. Left unabated, the manufacturing skills gap — which is now anticipated to leave 2.1 million jobs unfilled by 2030 — could cost the U.S. economy as much as $1 trillion.

Utilizing Reddit is an opportunity to present yourself to a still impressionable demographic to show them what makes you unique. Find creative ways to show those pathways to success for those who are looking for a way forward after years of frustration treading water personally and professionally. Changing their minds about what it means to work and who you are as an employer may be the only way to save the future. You can start your own Reddit profile. Join communities also known as “subs”. Create an ad campaign (called Promoted Content). Beware though, unlike Facebook or Instagram, non-promoted branded material that feels like a generic advertisement could get downvoted or marked as spam. Here is a great guide to how to develop content on the Reddit platform without pandering to those on the platform. Users will always respect honesty.

Create memorable content to post and advertise to grab their attention. Take time to listen to what they want. Both the antiwork crowd and Employers are going to have to give a little to solve this massive problem of unfilled jobs coming over the next eight years. Manufacturing can help with their incentives and flexibility, and workers can help with willingness to kickstart their output. As a business, the best ways to show this very deliberate demographic that you have a great culture worthy of their time is to celebrate your diversity, your commitments to the community, your commitment to their values, and a digital evolution in your operations that only they can solve. Empowerment comes from the knowledge that we are not victims of circumstance.

The people who are going to fill these jobs are on this platform and you can’t ignore them. There’s just too many of them. Be authoritative—yet gentle, transparent, self-deprecating, unique, funny, and compassionate. Showing this young generation that your business sees them as part of their future, is going to be part of your successful growth. The time to plant the seed is now…even if it is on Reddit.