If there’s one businessman who deserved to be kept up for a night (besides Mr. Madoff), it was Ebenezer Scrooge. A greedy man who ran a company and kept every dime for himself, and gave nothing back. And then, in one long night, he found his redemption.
If there’s one aspect of Capital TechSearch that I personally don’t lose sleep over, it’s when it comes to charitable giving. And as a small business owner, you shouldn’t be kept up at night over it, either.
There’s no doubt about it: Giving in a tight economy, particularly during the holidays, is a water and oil-like combination. The Conference Board reported this year that 45 percent of corporations – my gosh, nearly half –are expected to decrease charitable donations this year. And as a report from CFRE International notes:
A 2001 Giving USA report on charitable donations found that after an economic downturn, charitable giving typically does not keep up with increases in inflation. Upon revisiting the subject in 2008, it was found that giving slows slightly during recessions. In the five recessions since the one between 1973-1975, giving fell an average of 1.3 percent adjusted for inflation. In non-recession years from 1966 through 2006, giving has increased an inflation-adjusted average of 4.3 percent.
So how does a business continue recession-time charity?
Community giving as a business is akin to, as an employee, sticking a portion of your paycheck into a retirement plan: Establish a percentage up-front to give, and do so automatically. It’s hugely important and will make you feel good, and you’ll never really notice you had the money anyway.
Take the retailer Target, for instance. There, 5 cents of every $1 earned goes back into the communities it serves. And do you think Walmart got as big as it is and enters the communities it does without giving back? We’re talking hundreds of millions of dollars that are pumped back into the counties and cities where world’s largest company operates, and to numerous education, healthcare and initiatives.
Our business obviously can’t give what Walmart can, but five years ago, I decided to make charitable giving a core part of our business culture. While training for a marathon, I met the manager of a local nonprofit, Comfort Zone Camp, which supports the emotional needs of children who have lost parents, siblings or primary caregivers. When I gained an understanding of what this organization did, our company began sponsoring a gala and invited our network of friends and associates. I was into it. Our employees were into it. We bonded as a team as we built our company’s greater good. We’ve since added numerous other needy nonprofits to our list of donorees, if that’s even a word (let’s just go with it).
My business now gives more than 7.5 percent of our net profits to local charitable groups, and we have committed to at least that amount through the good times and bad.
Small business success means looking beyond the bottom line. Earning a reputation as a giver is the best thing a business can do for itself…and who knows where new relationships – be they the best employees or new, honorable customers – will crop up because of it.
Take it from me, or better yet, take it from Scrooge: You don’t want to be visited by his late-night guests.
Here are some questions for reflection in your own business:
- How important is your business to the community?
- Who drives community involvement in your firm? Are you aware of anyone in the company who is actively involved with a nonprofit?
- What are some local organizations that could benefit from your company’s contributions?
- What are some benefits of community involvement, both on a personal level and on the whole?
- How do you envision your company’s place within the community in 10 years?
This post is the first in a two-part series on charitable giving. Look for a future post about how entrepreneurs as a whole make up a high percentage of charitable donations. And for the full bedtime story on how to not be a Scrooge, read Chapter 11 of 15 Bedtime Stories that Keep Entrepreneurs Awake at Night. You’ll definitely sleep better at night knowing you are making a difference in your community and your business.
