Q: How do I add a philanthropic aspect to my business?
A: Businesses can advance their charitable interests in many ways.
Some businesses give a portion of their profits to charitable projects. For example, Target donates money to local needs as well as to national charities. Target also offers grants for school field trips. These programs raise Target’s community profile.
Businesses may promote employee volunteerism. The company could provide paid time off to work on charitable activities, or match employee donations to nonprofits. 3M’s program matches employee donations, as well as donating to organizations where employees volunteer. The employees choose the charity, and 3M boosts that employee’s impact. Or businesses could choose a project and invite employee-volunteers.
Some companies form a separate charitable foundation funded by the company that often focuses on aligned causes. Locally, Andersen Windows created the Andersen Corporate Foundation in 1941, with more than $60 million in grants made to date. The foundation supports affordable housing and other causes.
Many smaller businesses contribute skills and resources rather than money. A stylist might give haircuts to people in homeless shelters, for instance. Bombas donates a pair of socks for each pair sold. In these ways, a business can have an equal or even greater effect compared with straightforward financial contributions.
If your company’s mission centers on philanthropy, though, you may want to consider converting the business to a nonprofit. Alternatively, a company can become a public benefit corporation, which allows the business to prioritize social or environmental concerns along with other business goals.
Philanthropy offers many potential benefits. Financial contributions may be tax-deductible. Charitable projects improve morale. Giving can also boost marketing efforts through sponsorships and public relations.
Remember that these activities can have tax and legal effects. Consult with an accountant and attorney before choosing a sustainable and effective philanthropic path.
Stacey Supina is on faculty in the ethics and business law department at the University of St. Thomas Opus College of Business.