Many business owners are interested in participating in philanthropic projects, but they aren’t sure where to start. There are a wide variety of causes that need help, and it can be overwhelming to consider which project to support first. Rusty Tweed explains nine ways in which entrepreneurs can become more philanthropic, doing their part to help the community.
1. Start Small
When you want to start with philanthropy, it can be tempting to go all-in on a large project. This can be unwise since you will not be accustomed to the demands of running a philanthropic project. It is best to start with a small project and work your way up.
Choosing a community partner, you can work together with them to decide on their most pressing needs and how you can help. Some examples of small, yet worthy community projects are sponsoring a children’s sports team or donating goods for an auction.
2. Explore Your Interests
Investing in a project that aligns with your personal value system can be rewarding. For example, business owners should consider their interests and what kinds of organizations that have been helpful to them in the course of their lives. An entrepreneur who feels strongly about religion may want to give to a church or youth group program. Someone who has participated in Scouting in the past might want to be a corporate sponsor for a large event.
3. Consider Your Profits
When you are deciding how much you want to spend on philanthropy, look carefully at your business’s profits. You should not spend more than 1 percent of your profits on philanthropy. If you can, put money aside in a special bank account and use the interest to spend on philanthropic causes. Giving to the point of pain may seem attractive, but you will be able to keep up your donations well into the future if you manage your money wisely.
4. Be Careful with Politics
Political donations may reflect poorly on your organization. Public lists are available from political candidates, and it is possible that you will alienate some of your customers if they discover that you have donated to a particular candidate.
5. Encourage Your Employees to Help
While it is frowned upon to encourage your employees to donate money to a cause that you support, it is a good idea to encourage your employees to donate their time to worthy causes. You can pay them for this time, or you can encourage them to volunteer on their own time. Volunteers are almost as needed as financial donations.
Encouraging giving back can add positively to your company culture. With a compassionate worldview, your company will be more attractive to future employees and customers alike.
6. Small Companies Can Help
The public perception of philanthropists is that they are immensely wealthy people. In fact, there are many local businesses with relatively small customer bases that have a real impact on the community. Being a member of the community means that a small business has a better idea of what an organization needs to fulfill its mission.
7. Sustainable Gifts
Business owners who want to make significant donations but can’t pay all of the money up front can make monthly or quarterly payments. This can help community organizations with their regular expenses. Nonprofits often prefer to receive sustaining gifts since they can help them plan their cash flow.
8. Community Foundations
If you don’t know where to donate or can’t decide where to put your money, donating to a community foundation may be right for you. A community foundation is established by the creation of an endowment fund. A portion of this fund is set apart each year to provide grants for local nonprofits. Large and small companies alike are able to make donations. The donations are invested, and the earnings go toward supporting the projects.
9. Challenge Other Influencers
One of the benefits of entrepreneurship is that you have the ability to encourage others to give. Being a positive example within the community can lead to better results for deserving organizations.
When you encourage other companies to give, you can use societal pressure to do so, but be sure to be tactful about it. Not every company is in good financial shape. Being a positive example is better than browbeating other entrepreneurs for donations.
Doing the Right Thing for the Community
When you encourage your company to become more socially active, you can build your business’s reputation. Giving to deserving causes reflects well on your organization, but it may be best to be circumspect when donating to political causes. Rusty Tweed believes that every business owner has the capacity to be a philanthropist, and that local organizations stand to benefit a great deal from the association.