Doing Good Is Good for Small Businesses (Faviola Alba Commentary)

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With all of the anticipation and excitement around the holidays, it can be easy for small-business owners to overlook how charitable giving can impact their bottom line at the end of the year.

Giving Tuesday is Tuesday, Dec. 3, and it’s a great opportunity for small businesses to reinforce their value in their communities and remind customers why shopping locally matters. Strategically scheduled after Thanksgiving as a counterpoint to the commercial focus of Black Friday and Cyber Monday, Giving Tuesday began as a grassroots effort to encourage community engagement through philanthropy and volunteer service. Since 2012, it has evolved into a global phenomenon celebrated in more than 150 countries and is now coordinated by GivingTuesday.org.

Here are five reasons small businesses should consider participating in Giving Tuesday and regularly committing to philanthropy:

1. Charitable giving helps businesses build goodwill and strengthen their reputation, which can lead to increased customer loyalty and referrals.
2. Encouraging employees to volunteer or support local charities can boost morale by fostering a sense of purpose among staff, which can lead to better retention and recruitment.
3. Donations can be tax deductible, allowing small businesses to offset some of their tax liability while supporting worthy causes. Talk with a tax professional about possible tax deduction opportunities.
4. Engaging with local nonprofits and community organizations can lead to valuable networking opportunities and potential business partnerships.
5. Giving back helps small-business owners feel more invested in the local community and connected to the people they serve.

These good intentions could potentially yield good outcomes for your business and your community, but don’t pledge more money or time than your business can support. You can start small and grow your charitable giving annually to provide organizations with consistent support over time versus a one-time gift.

Here are five practical ways small businesses can participate in Giving Tuesday:

1. Donate a percentage of sales to a local nonprofit or community organization. This incentivizes customers to shop with you and helps them feel good about their purchases.
2. Match customer and employee donations up to a certain amount to inspire them to give more because their contribution will be doubled.
3. Give employees paid time off to volunteer for local charities to show their commitment to the community.
4. Make in-kind donations of products or services instead of or in addition to cash contributions to nonprofits.
5. Partner with other businesses to host joint fundraisers, share resources and maximize impact.

Remember to watch for scam charities. Use the Tax Exempt Organization Search tool at irs.gov to research. Once you’ve chosen a nonprofit organization, don’t be shy about promotion. Small-business owners can generate substantial goodwill for their businesses through public philanthropy.

By supporting local causes, small businesses have a chance to show they care about more than just profits, which can resonate with customers who value businesses that give back. This goodwill can help build strong community ties, strengthen customer relationships and create long-term success.

Faviola Alba is a senior vice president, community lending manager for Arvest Bank-Central Arkansas.