Giving (and getting) back: Why "doing good" also makes good business sense

by Reed Richardson

Amidst this turbulent holiday season, many small business owners, facing one of the most challenging economic climates in recent memory, may be tempted to curtail or even suspend their company's charitable giving. After all, if a small business doesn't survive today, it can't very well give much in the way of charitable donations tomorrow. But more and more small business owners are changing their thinking about charitable giving and coming to see it as not only a moral obligation but also a wise strategic investment in their businesses' long-term future-a way to do be "doing well" while "doing good."

Marketing boost


"I think having a relationship with a charity is an essential part of marketing any size business without spending a lot of advertising dollars," says Deborah Crawford, owner of the Memphis-based small business-marketing firm Smart Marketing Works. Still, Crawford, a sole proprietor who founded her marketing company four years ago, acknowledges that a charitable giving strategy isn't something that most budding entrepreneurs seriously consider since it's rarely included in most business plan templates. "But any business that doesn't come to see its importance is missing a big part of building the business."

Dwight Burlingame, associate executive director of the Center on Philanthropy at Indiana University-Purdue University-Indianapolis, agrees. "More and more we're seeing a focus on company-based philanthropy from the small business side," he says. This trend, which Burlingame says he first detected roughly a generation ago, has grown substantially since then. "In fact," he notes, "small businesses are now engaged and give to charitable organizations at higher percentages, on average, than large companies or corporations."

Beyond the check
This "give back attitude," as Burlingame calls it, has accelerated in the past several years and coincided with a turn toward a more entrepreneurial approach to fundraising in the non-profit world. This greater, ongoing engagement-through periodic volunteering or ongoing sponsorships, for example-gives small businesses a better understanding of whether or not the charity is meeting its stated goals as well as what they can do to help reach those goals in the future. Writing a check to a favorite charity once a year obviously helps, Burlingame says, but to really make a difference, small businesses should "want to create transformational or transitional relationships rather the just transactional ones."

This transformational approach to philanthropy benefits the donor businesses as well, Burlingame notes. "Small businesses that work year-round with local charities tend to interact more with people who are the business's customers," he says. This steady exposure lends a company a stronger brand of social responsibility and builds positive word of mouth in the community. In addition to these external benefits, charitable partnerships can also pay dividends internally. "Studies have shown that companies with well organized charitable giving programs experience improved morale and increased productivity," Burlingame explains. "And those benefits, in turn, have a direct relationship on increasing the bottom line."

Look local
When looking for the right partner, Burlingame recommends choosing a community-based charity that offers your small business a greater opportunity for a direct and personal impact, or what he calls the "local, front-porch approach." He contrasts this with what he calls the "gated, backyard" philanthropic efforts of many large companies, which often funnel employee donations up and away from local communities to far-removed corporate headquarters, often culminating in the well-worn, but fairly impersonal, oversized-check presentation between chief executives.

"Plus, for many small businesses, writing that big check just isn't an option," notes small business marketing consultant Crawford. Local charities, she adds, will be more amenable to in-kind donations of time or talent, things that many small businesses are often more than willing to share. "For example, I run a marketing firm, so I often donate my skills in helping promote events for the charities I support," explains Crawford. "A small law firm could provide free legal advice as their donation or, say, a restaurant could donate excess supplies to a local food pantry like Second Harvest."

Look for a logical match
Similarly, it's a wise strategy to concentrate your small business's charitable efforts on one or two local organizations whose missions align with your own. For example, an architectural firm that specializes in green buildings might strike up a partnership with a local environmental group or a retail bookstore might consider sponsoring the local library's adult literacy program. And while some might consider such a calculated decision to mate your business interests with a charity's pursuits inappropriate, Burlingame says small business should be unapologetic about trying to do well while doing good. "After all," he says, "one of the highest forms of philanthropy is giving someone a job."

Finding a charitable partner
There are several online resources that will allow you to search through a variety of criteria to find charities and non-profit organizations. Some websites even let you research a charity's giving and accountability standards. "Also, most local Chambers of Commerce can be of help when looking for a charity or non-profit in the nearby community," notes small business marketing consultant Deborah Crawford.

Charity Navigator-


Better Business Bureau Accredited Charity Directory-


Non-Profit Organization Database/Research Tool-