I ran across an article today by Kathy Plomin in Business Lexington, GIVING BACK: Corporate Philanthropy:Giving back offers benefits to the giver, too.
In addition to quoting the usual stats from the Cone/Roper Research Reports to help make the case for business philanthropy, the article states, “If you own a family business or are an officer of a corporation, there are at least four options for you to consider for your company’s charitable giving: a corporate giving program, a corporate foundation, a corporate donor advised fund, and employee matching and non-cash giving.”
The article gives the following advice: “Many corporations operate an annual giving program to make charitable grants part of their annual budgets. Small business owners can blend their family business with family philanthropy by channeling their charitable support through their company. This is usually directed by the senior management and/or ownership of the company.
A company may also wish to create a corporate foundation as an independent, tax-exempt private foundation. A corporate foundation is usually started with a single gift that can become the endowment, to which the company can add future contributions. The foundation’s officers are usually the company’s owners and key executives. At some companies, employee committees make giving recommendations about projects they believe are worthy of support. Just be sure you do your homework –– the corporate foundation is subject to the same rules and regulations applicable to other private foundations.
In addition to awarding cash grants to charity, companies often offer to match their employees’ gifts of cash and volunteer time to nonprofit organizations. Many companies assist and encourage their employees to give by organizing workplace giving programs and by facilitating payroll deductions for employees’ charitable gifts. Companies sometimes match gifts that their employees make through workplace giving programs.”
Plomin has done a nice job giving an overview of business giving. In my experience though, too many smaller businesses (family owned or not) make the mistake of thinking the best way to give back and make a difference is by setting up their own foundation or starting a nonprofit themselves. Somehow people don’t realize that either of these options is ALOT of work and the burden on top of running a profitable business, especially in tough economic times may counteract the value of the effort. My advice would be to do a little research about what nonprofits already exist that are working in the same general area as the cause you want the business to support. Even if they are not doing exactly what you think best and you have ideas for a new innovative program, consider partnering with them. Use their structure and networks to help do your good works. You don’t need to recreate the wheel.
Same with starting a foundation. For most companies until you reach annual revenues in the multimillions, it may be far better to run your grant program as a donor-assisted fund at a community foundation than to start your own foundation. Again, a community foundation has the experience and the existing infrastructure to manage your program for a small administrative fee – leaving you to do good AND have the time you need to run your own business.
Be strategic and think things through BEFORE you leap in over your head!!