The Many Benefits of Giving Back as a Business Owner
Philanthropy has been a cornerstone practice of the most successful businesses for over one hundred years. There are many reasons why a company devotes time and money to giving back to the community. From networking opportunities to higher workplace satisfaction, in this article we explore the many benefits of giving back as a business owner.
Respect and Goodwill in the Community
Perhaps the biggest benefit of giving back as a business owner is the respect and goodwill generated from the community. People recognize that businesses are not required to volunteer or make donations to areas in the community, and when companies make the effort to engage, citizens appreciate and remember the effort.
For example, Facebook moved its headquarters to the old Sun Microsystems building in Menlo Park, CA. Community members were skeptical of the influx of people and potential traffic issues with the large number of employees needing to commute to work.
Facebook helped ease these fears by improving bike trails in the area and engaging in substantial cleanup efforts in Menlo Park. Facebook went further and donated $105 million to local schools that were in desperate need of upgrades.
The time and money Facebook invested in Menlo Park helped them connect and become partners with their community, generating substantial goodwill.
Although not many companies have resources on par with Facebook, the efforts Facebook made can serve as a valuable template for organizations wishing to better understand how engaging proactively in their community can be mutually beneficial.
Higher Employee Satisfaction
Many businesses today have invested resources into increasing employee satisfaction. One of the best ways to achieve this goal is to promote engaging in charitable activities among a company’s employees.
Charitable work helps improve morale for employees. “Breaking up” the routine of daily work helps keep employees engaged and can result in higher morale. Higher morale leads to improved job performance and overall job satisfaction.
Quicken Loans in Michigan has long been considered one of the best places to work in the metro Detroit area and provides a good example of how a large business can encourage charitable engagement to its employees. The company is heavily involved in the community and engages in several outreach programs.
Quicken Loans began giving back by buying blighted property near its headquarters and renovating them to make them more desirable for other companies who wished to move to Detroit, but were skeptical of the location. This effort led to less crime, a cleaner downtown area, and more companies moving to Detroit.
Quicken Loans also provides unlimited paid time off for its employees to volunteer. This is almost unheard of in the business world, but Quicken Loans has made it a cornerstone of its outreach operations in Detroit. The company leads by example and benefits greatly from these programs as evidenced by its high workplace satisfaction and tremendous business success.
Team building is an area that today’s businesses are spending more time and resources developing. Employees who volunteer or otherwise give back are given the chance to get to know each other in a more relaxed setting that they otherwise might not be able to. The camaraderie developed amongst team members often leads to better team performance and productivity.
The marketing benefit of charity work is substantial. Community leaders are often engaged in philanthropic activities, and companies often find new networking opportunities that otherwise would not be available.
This is not limited to other businesses. Local officials, school boards, and religious organizations are often involved with giving back. Philanthropic work generates good press and is a boon for a company’s public relations department. Increased visibility resulting from good press can expand a business’s customer reach substantially.
Attracting talented employees is an issue that many companies are dealing with in the wake of the COVID-19 pandemic. Prospective workers are looking for businesses that value employee contributions and make employee satisfaction a priority. Knowing that a potential employer gives back to the community and encourages its employees to do so can attract a wide and talented group of applicants.
The most widely known benefits from charitable activities are tax benefits. Estimates put the amount of tax deductions taken from philanthropic activities at $18.55 billion for 2016.The calculation of actual deduction amounts is beyond the scope of this article, but your accountant can give sound advice on the best way to maximize your charitable deductions.
Finding the right charity to partner with can be complicated depending on the nature of your business. A good practice is to align with a charity with a similar vision and mission as your company. Another great way is to simply ask employees for ideas about how to contribute. This combines the benefit of higher employee engagement with giving back to various organizations.
A business that gives back to the community enjoys many benefits resulting from their efforts. Whether investing time or money, the company will be rewarded with higher morale, better productivity, and substantial goodwill and respect from the community.