Small business owners are motivated by much more than their bottom line. They are committed to giving back to their community by being an important piece of the local economy and by meeting the needs of their customers.
While the business’ services provide plenty to the community, many business owners want to do more by donating to charitable organizations. Donating to charity not only helps a cause tha the business supports, but it also improves the business’ reputation within the community. Everyone benefits when businesses give back.
Choosing a charity to support
Every small business represents a different community, a different team and different values. Finding the right cause to support will help your employees and community appreciate your donation even more.
- Consider your values: There are many charitable organizations that deserve your support. You can maximize your impact by finding one that fits with your brand and your audience. For example, if your business sells products for children, a charity focusing on helping children in need would be a natural fit. If there was a natural disaster in your area, helping local families would also be a great cause.
- Research charities: While most organizations are well-deserving, it’s important to do your research. Search online to learn more about an organization’s financial history and structure. Check out the organization’s website to learn about their work and how they help their audience. To qualify for a tax deduction, the organization must be registered as a 501(c)(3) nonprofit.
- Make charitable giving a priority: Donating money seems counterintuitive for a profitable business, but it can do a lot for employee teamwork and community reputation. Budget for regular financial giving. Even better, commit to volunteer opportunities along with your employees and team members to create a culture of giving in your workplace.
Navigating the financials of giving
Once you’ve decided where you’d like to give, you’ll need to decide what you can afford. There is no magic formula for what to give. Take stock of your resources and determine what makes the most sense for your business and your community.
If you are unable to give as much as you’d like financially, you can also donate goods or volunteer your time. If you have leftover inventory or supplies in good working condition, consider donating these to a local organization. If your business provides services, see if you can partner with a charity to provide your services at no cost to their audience. Instead of a bar night, have your team-building activity at a charity event where everyone can volunteer together. In-kind gifts and mileage and expenses incurred while working for a charity are all tax deductible.
While businesses shouldn’t donate solely for the tax deduction, it is a nice perk. Corporations can make deductions on their income tax returns. All other businesses pay taxes as pass-through entities, so the individual owners claim the deduction on their personal returns.
If your business is interested in charitable giving, an expert tax preparer will managing claiming your deductions. MCG Solutions is here to help. Contact us today to learn more.