A three-part approach for deciding which charities your business should support
One of the questions I get asked the most is about how I decide how much to give to charity and how I choose the organizations I support. In general, small business owners are often overwhelmed with requests for donations and it can be tough to navigate those requests, feel like you’re supporting your community, and keeping your sanity, too!
To answer the “how much” question first, I recommend creating one of two things:
A budget that includes the total amount you want to give away in a given year. This is a personal decision and looks different for everyone.
Or, decide that you will give a percentage of your profits and stay consistent. You can do this monthly, quarterly or even annually. I have chosen this method for my business and I like to do it quarterly for a selfish reason -- it makes me happy! It’s the best part of finishing up a quarter and it offsets that mundane tasks like working on quarterly taxes and receipt management!
The second part of the question (how I choose the organizations) is a lot more in-depth. This can be difficult because there are so many choices. I’ll share with you my thought process and three-fold approach but please know, there is no one right way to do this.
My three-part approach
When I started One Nine Design, I decided that I would have a three-fold approach to supporting charities on behalf of my business.
I would choose one global organization to donate to every quarter and keep that consistent.
I would choose one local organization to donate to each quarter and that would rotate.
I would set a budgeted amount to give away “as needed” each year, allowing for flexibility for one-time occasions, special events, etc.
So let’s dig deeper into each area.
By supporting a global organization, it makes me feel like my business is impacting the world! Now, that might be a stretch but it really does motivate me. Depending on your passions, your interests, and beliefs, this list might be short or long for you. I did quite a bit of research and narrowed it down to four choices:
Each organization had their strengths and each had a great case, in my opinion. Now, this might be the time for me to disclose that I worked in the fundraising world for almost 20 years so I know a thing or two about how to evaluate a charity :)
I ultimately chose Kiva because it allowed me to narrow my focus (while still supporting a global cause) and support female entrepreneurs specifically, which was obviously important to me. I also liked that I could do two things with them -- make small loans (which would be repaid and then allow me to make a new loan), plus make a traditional donation. It’s been a fun part of the business ownership experience for me as I spend time reading stories on their site and choosing who to support every three months.
It was important to me to also support a local organization each quarter. Again, in the interest of disclosure, I was in a leadership role with a few local nonprofits before starting my business so I know more than the average amount about our local charities. However, you don’t have to have any inside knowledge to make an informed choice in this area.
To choose a local charity, I recommend considering the following:
Start with your passions, your interests, your area of business, etc. and see who is a natural fit. Perhaps your church is already involved with a local nonprofit and you want to help them through your business as well. That’s a great place to start.
Choose a local affiliate of a national organization. I like this route because these nonprofits often have financial accountability standards and resources to make a bigger impact locally because they are supported with ample tools. Don’t fall into the myth that these organizations *get* money from their national headquarters, though. It’s often just the opposite and that they give money in exchange for continuing education opportunities, brand awareness, etc. Some of my local favorites in this category are:
Talk to someone at your local Community Foundation and ask their opinion. They work with many local nonprofits and can direct you to additional opportunities that match your interests. You can also choose to support the foundation itself, as most of them have an annual process where they award grants to deserving nonprofits.
Consider your local Main Street organization. These organizations are working hard to promote small business in your town and make your community great!
Don’t forget about your alma mater if that’s important to you. This one may fall into your local or global category, depending on where you live.
As you narrow down your list, consult online resources like Guidestar or Charity Navigator to check for additional information on their credibility, impact, and programs. Or, simply reach out to a staff member and ask about their mission and plans for the future. Any great nonprofit will take time to talk with you and offer additional insight about why your gift would matter to them.
Most importantly: never rely on those inaccurate, viral posts on social media that attempt to break it all down in one misleading infographic.
Budget for as-needed opportunities
If possible, set aside some funding to make impromptu gifts at special occasions, for campaigns you might not know about at the moment, or to sponsor a ball team or something similar. It feels good to be able to help in those situations and not worry about trying to squeeze it into your budget. If you set aside a specific amount one time a year, you can feel confident about saying yes to the right thing and not feeling bad about saying no when you’ve depleted that particular budget line.
Gifts of time and tangible items
It’s possible that there will be a season (or two) in your business where you are just not able to give money and that’s okay! Consider other ways you can help like volunteering your time, donating tangible items, or serving on a board or committee. While nonprofits need cash to make their programs happen, intangible items are always appreciated!
As with anything we do in our business, it’s a completely personal decision and one to consider when you’re not in a crunch to decide on the spot. As you plan for 2019, take some time to consider your options and what matters most to you. By simply doing anything that takes the focus off of ourselves and put it onto others, we’re making a difference!
I’d love to hear from other business owners. Which organizations do you support and why? What criteria would you add to this list? Share your feedback here in the comments or on any of my social media platforms linked below!
You might enjoy reading some of my recent blog posts…