You’ve made it through Thanksgiving, Black Friday, Small Business Saturday, Sofa Sunday (really just another shopping day with Black Friday holdover/Pre-Cyber Monday deals, which thanks to tablets you can now take advantage of while on the sofa), and Cyber Monday. And though the holiday season is just getting into full swing, today is Giving Tuesday and a chance to take a short break from the shopping and selling to concentrate on giving back.
Created in 2012 by the 92nd Street Y (a New York City cultural center), #GivingTuesday is a global day of giving fueled by the power of social media and collaboration that celebrates and supports giving and philanthropy. According to the official Giving Tuesday website, it has over 30,000 partners in 68 different countries, and since its inception it has generated and estimated 470% increase in online donations on the Tuesday after Thanksgiving.
The Giving Tuesday Ask
Just find a way for your family, your community, your company or your organization to come together to give something more. Then tell everyone you can about how you are giving. Join us and be a part of a global celebration of a new tradition of generosity.
Celebrate Giving Tuesday
There are a number of official online and offline Giving Tuesday events scheduled, and you can join any one (or more!) of them. But to really get in the spirit of the event, use the day to come up with ways that your small business can give back to your community this holiday season and throughout the year. The Giving Tuesday resources page provides some help with getting started, including the Small Business Ideas Sheet, and tool kits for social media, press releases, community outreach, email, and more.
Ideas for Small Business Giving
Small business charitable giving can work to help your company as well as the causes you support. A 2013 study found that 90 percent of those asked said they would be more likely to trust and be loyal to a company that supported a cause.
Supporting a cause (or causes), can take many forms. It can of course mean cash gifts to organizations in your community, or in your marketspace. Donations can also be goods and services, including excess inventory or business equipment and supplies. Your company can band together to collect donations of goods (like toys over Christmas, or canned goods for a food bank) for a local charity, or your team can volunteer together to help a local cause. Additionally, you could create a matching gift program for donations your employees make to their favorite charities, or you could run an online promotion in which you donate a portion of each sale to a designated charity.
Here are some specific suggestions that are well suited to the holiday season:
- Add a charitable component to your office Secret Santa gift exchange.
In addition to buying a gift for an office teammate, each person also buys a gift that is donated to a local charity toy drive.
- Sponsor a charity holiday party.
Instead of (or in addition to) your standard company party, gather your team together to help a local charity. You might serve dinner at a homeless shelter, wrap gifts for a toy drive, stock shelves at a food bank, etc. (Providing snacks and drinks, if appropriate, will help promote festiveness.) Doing it together as a team makes it a party, and helping others makes it a teambuilding win.
- Devote a marketing day to a charity.
You probably have some type of marketing calendar for your small business, and a marketing plan that targets specific products and promotions. You may also have a budget (for example a daily Google AdWords budget) for these marketing activities. Choose one day to shift focus from your company to a local charity, and put your social media savvy to work promoting that charity and soliciting donations for them. You might even divert (or match) your daily marketing budget to support the charity on that day. (Of course, the very fact of your charitable work helps brand your company, so this can be a win for your marketing strategy too.)
- Promote a Charity on Receipts & Invoices.
Whether you send receipts for payments and recurring billing, or use paper or electronic invoicing, the receipts and invoices you send are a great way to get additional marketing touches—to promote new products, suggest complimentary services, or just to say thanks. They can also be used as a way to increase awareness for a cause your small business supports. You could include a line at the bottom of emailed invoices and receipts that includes the name of the charity, why you support it (be sure to note how it relates to your business, if it does), and a link to the charity website where your customers can learn more. (Make sure to let the charity know what you are doing first.)
- Sponsor a Charity Contest.
Have your customers submit nominations for local charities that could use the products or services you provide, and then pick a winner or winners to receive them for free. Post the contest on your website, your blog, and on all your social media channels. Post the nominees on a contest webpage as well. You could also include voting on that page, if you want to select a winner that way. Additionally, you could do follow-ups with the winning charity throughout the year to showcase how your company is helping them to succeed. That’s a charity win, a marketing win, and a way to engage your customers throughout the year.
Finding the Right Charity to Support
The possibilities are as varied and unique as are types of small business. But, you know your community and its needs best, so the best idea is to find a place where your involvement can do the most good. However, you want to be certain that you are supporting a reputable charity. The following resources will help you do that, as well as help you find charities that support the causes you want to champion.
- EO Select Check
This online tool from the IRS enables you to search for any charity to determine whether donations to it are tax deductible and the deduction limit, whether its tax-exempt status has been recently revoked, and whether it has filed the required tax paperwork.
- Charity Navigator
Charity Navigator bills itself as your “guide to intelligent giving.” It provides rankings for thousands of charities based on financial health, accountability, and transparency. Look for 3 and 4 star charities to ensure that your donations are being effectively and responsibly used. You can search the database by charity name, cause, location, or star ranking. You can also search unranked charities—the database is quite extensive. Results include a brief summary of the mission, detailed information Charity Navigator has on each organization, and links to the charity websites.
- Better Business Bureau’s (BBB) Wise Giving Alliance
Use this BBB search to look up a charity you are considering. You’ll see a full report on the charity, whether it is BBB accredited, and whether it meets the BBB 20 Standards for Charity Accountability.
Also be sure to review the FTC Checklist for avoiding charity scams, to make sure that you are not inadvertently lining a crook’s pockets instead of supporting a good cause.
Don’t Forget The Tax Deductions
While tax deductions should not be the primary reason for your small business to support charitable causes, they are a nice side-benefit. (And if the tax deduction is the driving force behind a donation, then that’s fine too– the charity benefits just the same.)
In general, you can deduct cash donations to qualified charitable organizations up to 50% of gross income (though the limit is lower for some charity types). You can deduct the fair market value (not necessarily the price you paid) of goods donated. You cannot deduct anything for your time, or your employees’ time, even if you are paying employees to help the charity during regular business hours. You can deduct costs you incurred during volunteering such as travel to the charity site or wrapping paper you purchased to use for packaging gifts.
Additionally, you need to deduct the value of any “gifts” you received from the amount you claim on your taxes. For example, if you donate $250 and get a dinner worth $50, you could only claim a $200 charitable deduction. Typically, the charity will provide a letter or email confirming your donation, as well as the amount of it that is deductible. For large donations (in excess of $250) this letter is required. You’ll also need to file a special tax form if you give valuable donations of goods.
Tax rules are tricky, so it is best to consult an accountant about any deductions you may be eligible to take. You’ll also need to keep good records for all of your charitable giving, and your accountant can help you with that too.
In addition to consulting your accountant, the following resources can help give you an idea of what to expect:
- Understanding the Charitable Giving Tax Deduction – What Can Your Small Business Write Off?
This post from the Small Business Administration (SBA) blog, provides detailed information about how small businesses can take deductions for charitable donations. This slightly more recent SBA post provides additional advice.
- Small Business Guide to Deducting Charitable Donations
This Fox News post provides detailed examples of different types of charitable donations and how they can be deducted based on how your business is incorporated (C corporation, LLC, sole proprietor, etc.)
- IRS Publication 526
Everything you wanted to know (and some that you didn’t) about deducting charitable donations of all kinds, straight from the IRS.
- IRS Publication 521: Fair Market Value
The IRS guide to determining the deductible “fair market value” of donated goods as well as information on the documentation you’ll need to provide and the forms you’ll need to file in order to take deductions for donated goods.
What charities does your small business support? How do you get your team involved in small business holiday giving? Let us know in the comments, and let everyone know at #GivingTuesday.
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