A few easy ways to support charities in your business (and get a tax benefit too)
Embracing charity in your business is not only an altruistic endeavour, which benefits society, there are also tax incentives in doing so. In such a win/win scenario, it’s hard to conjure a reason why you wouldn’t be wanting to give back to worthy causes in whatever capacity you can.
But it’s wise to give serious thought to who you want to support – and before you commit to assisting, be sure your chosen charity is as reputable as possible. Find a cause that’s close to your heart, and make sure you do some due diligence. (Unfortunately, some NGOs out there are less transparent and scrupulous than others in terms of where donations actually go.)
Let’s explore some interesting ways you can build charitable causes into your business model.
1) Involve your customers in fun and interactive ways
How do you get your customers involved in a worthwhile cause you support without asking them for money? Take a look at what healthy burger chain ‘Grill’d’ does with ‘Local Matters’.
If you’ve ever visited one of their stores, you’ll understand. When you make a purchase, you’re given a token. This token is placed, at your discretion, in one of three jars, each representing a different cause or charity.
At the end of the campaign, the charity (or jar) with the most tokens receives a percentage of Grill’d’s total sales.
Since 2011, the Australian-owned chain has donated over $6 million to charities by asking their customers to help decide which cause resonates with them the most.
This interactive method not only helps get the names of three charities into market but also engages customers in the donation process, without asking them to dip into their own pockets.
2) Donate a portion of your proceeds for a particular item – even for a limited time
Another way businesses can contribute to society (without asking customers for a donation) is by linking a promotional offering with a charitable cause.
Simply asking your clientele for a donation is perfectly fine, however, showing your own support and incorporating a percentage of profits (or free products) to go towards a charity is much more palatable and workable.
For example, you could attach a 10% charitable donation to a particular product, service or special offer you’re promoting that month.
You could also directly donate goods. For example, Leesa (a leading mattress and bedding business), donates one mattress to a charity tackling homelessness for every ten they sell.
3) Use your marketing channels to promote a good cause
Whether you operate a physical store, or an online ecommerce space, there’s always room to harness your reach for a worthy cause.
Resharing a post or donation link from a charity close to your heart (or your customers’ hearts) to your social media followers, is a simple and easy way to spread goodwill and make a positive contribution.
4) Support socially-conscious supply chains
With biting inflation and tougher times for many small businesses, if you’re unable to donate cash, goods, or volunteer (in the foreseeable future) why not weave social consciousness into your business practices by examining your supply chain?
Can you look for suppliers who are actively driving down their carbon footprint, or perhaps opt to do business with a supplier who supports a charity that aligns with your values?
IKEA for example, is dedicated to sustainability across their supply networks. Having already phased-out single use plastics, the slinger of Swedish meatballs and purveyor of frustrating flatpack furniture also actively sources ethical materials for their products.
There are many ethical businesses who care about doing good for society in Australia too. Find them.
Now claim it all on your taxes!
Although the primary motivations for wanting to assist those doing it tough and make the planet a better place, are inarguably altruistic, there are tax incentives too.
When it comes to paying less tax, lowering your taxable income is the aim of the game. Fortunately, in Australia, charitable donations are incentivised and taxpayers (including businesses) can claim back on donations to any registered ‘tax-deductible gift recipient charity’.
As long as your donation is $2 or more, you can claim back the full amount of money that you donated in your tax return.
Tax benefits should never be your primary motivating factor when it comes to charitable donations, but it’s certainly a pleasant side effect.