Why Small Businesses Should Support Charities

 If you are a small business owner, then chances are that money is tight and every cent counts. While Bill and Melinda Gates may have billions to give to charity, it’s less clear why you would set aside part of your profits to give away. However, there are actually a number of good business reasons for giving to charity, aside from the obvious one of social responsibility.



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One of the most important reasons for doing this is that it builds company spirit. Employees are more loyal and productive if they feel they are part of an organization that they believe in, as opposed to somewhere they just come to work. Furthermore, if you give your employees overall responsibility for driving charitable efforts and then contribute – for example, by matching the money that they raise – you will start to strengthen the bonds between your employees. There is no better way of making people feel close to each other than having them engaged in a communal effort to help others. This is not cynical – it benefits everyone concerned – but from a business perspective, it means that you get employees that deliver more profits, are more likely to be committed to the success of the company, and are less likely to leave.


Another key reason is that giving to charity is a good way of building support in the community where your business is located. This is even more the case if you contribute to community activities. For example, you could sponsor a local fundraising event such as a bike race or even a charity picnic. The thing to remember is that the people you are touching here are not only potential customers – they are also the people who you may need to help you in future. They include bank managers, suppliers, partners and others who have the power to grow your business – so creating a positive impression with them can have a direct impact on your success.


The next reason is a more personal one. Entrepreneurs need passion to continue to succeed – see Francesco Corallo’s official homepage for more about this. Giving to charity and participating in charitable events is a good way of sustaining and renewing that passion. It provides a contrast to the stress of business, and shows that what you are doing every day is meaningful beyond just the dollars and cents.



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The final point may appear a little bit fuzzy at first, but it is backed up with some fairly hard evidence. This is the concept of social capital – the surprising fact that companies which act for social good tend to do much better than those who don’t. A number of studies have shown that this is the case. For example, one study by the New York University Stern School of Business showed that financial and retail companies that contribute to charity see significant increases in revenues. If there ever was a pure business reason for supporting charities, then this is clearly it.


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