Boost your business’s image by donating to a social cause

Charitable giving – why so popular?

With Ukrainian flags and collection pots appearing hot off the heels of rainbow banners and appreciation posts for essential workers during the coronavirus pandemic, the past few years have galvanised charitable giving.

Indeed, the virus has been a catalyst for some of us, as people were encouraged to check in on neighbours and share much sought-after groceries with those unable to go to the shops. As society rallied, it seemed that we were better able to empathise with others.

The concept of charitable giving, however, is not a new thing – in fact corporate donations have been popular since the Roman times, when businesses were expected to pay taxes to fund military campaigns. By the eighteenth and nineteenth centuries, the concept of ‘philanthropy’ was widely understood and practised by those such as Thomas John Barnardo, who used their expertise to do good in society.

Today, charitable giving is still common practice amongst businesses – for several reasons. Large corporate donors include Lloyds Banking Group, ITV, Marks & Spencer and Innocent Drinks – whose charity work underpins their mission to ‘keep people healthy, help out the communities who need us and make sure our planet becomes healthier too.’

Business benefits

Alongside the obvious benefits for recipients of donated funds, there are a multitude of benefits for the businesses making donations, too.

Team morale is a significant factor. Forty-five percent of companies surveyed by the Charities Aid Foundation gave ‘improved recruitment and retention’ as a reason for ‘corporate responsibility’ practices.

Showcasing your business’s philanthropic stance can also help to attract the right kind of attention to your business. According to Goodbox, ‘Corporate philanthropy is a rich source of audience engagement, particularly with younger generations… By being an ally to disadvantaged groups or causes on social media, you will be clearly communicating your company’s values.’

Community engagement is another benefit – where company profits are donated to local causes, members of the community will directly experience the result and are therefore more likely to support the business.

Tax incentives provide an additional reason to donate – since 2000, companies that donate to charities have been eligible for Corporate Gift Aid. This means that such businesses have the value of their donation subtracted from their profits for tax purposes.

Giving and Corporate Social Responsibility

Charitable giving is often managed by businesses as part of a Corporate Social Responsibility (CSR) programme. The aim of such programmes is to have a positive, lasting impact on society which goes beyond financial support.

Practical actions that fall under this category – and which are supported, but not defined by financial gifting – include rebranding products to support a particular cause and partnering with charities whose vision aligns with that of the business. In 2021, for example, food giant ‘McCain’ pledged £1m to the ‘Family Fund’ to help bring families together at mealtimes.

Various advisory organisations can offer support and advice on how maximise the impact of your donation and extend support in practical, as well as financial, terms.

Which cause?

It’s a sign of our times that the number of causes to donate to seems to be ever-growing. As living costs increase, the number of people living in poverty rises; meanwhile, climate change triggers natural disasters with growing frequency and political conflict turns civilians into refugees overnight.

It’s easy to choose a cause based upon topical issues and what’s popular. However, a charitable partnership is more likely to flourish if the charity in question has some connection with the business.

Consider why you started your business and what opportunities you were given that made it possible to get to this point. If you struggled at school, you might want to donate to a charity for children or adults with learning difficulties – or else fund an apprenticeship so that others can learn your trade.

Once you’ve chosen, foreground the connection between your business and the charity in any campaign or marketing materials. For example, you may choose to donate a percentage profits from sales of a particular product that reflects the cause you’ve chosen. Make it clear that this is what you’re doing, and why.

Foreign exchange

While charitable giving should really to be a long-term commitment for any profitable business that can afford it, one-off donations won’t go amiss in times of crisis where human lives are in jeopardy.

Such crises often occur far from home and so it may make sense in such cases to donate to a foreign aid organisation working on the ground. To maximise your donation by obtaining competitive exchange rates, consider using a transfer service such as Currencies Direct.

If you have a foreign bank account in the country whose organisation you’re donating to, use a spot contract to exchange funds to the currency in which the donation will be made; alternatively, set up a forward contract to fix the current exchange rate for up to a year, so that you can continue to make regular donations at a favourable rate without having to worry about your transfers losing value.