How can being charitable benefit your business?

At Dartcell, we believe wholeheartedly in using our platform and our resources to support causes that are close to our hearts.

For example, we recently helped Year 12 students from Hockerill Anglo-European College travel to Zimbabwe to take part in a rugby tournament and community engagement initiative organised by The Tag Rugby Trust.

Without our sponsorship, the trip may not have gone ahead – which would have left dozens of kids disappointed and not able to access the enriching and rewarding experiences that the project created for them. The feedback from the programme was excellent, and we feel privileged to have been able to help facilitate such a life-changing event for the kids at home and those in the host village, which was located near Victoria Falls.

There are a number of advantages to using your company’s presence and reputation to support people and organisations that are doing excellent work, whether that’s on a local, national, or even international scale.

Here are 6 reasons why you should consider backing charitable causes with your business.

1. You’ll develop a more robust CSR strategy

Far from being simply a buzzword, CSR – or corporate social responsibility – is becoming increasingly important for companies that want to stand out from their competitors for the right reasons.

A strong CSR strategy can encompass everything from actively reducing carbon emissions and investing in more sustainable working practices to improving labour policies, paying fair wages, and prioritising diversity, equality and inclusion within the organisation. It can be bolstered further by charitable giving, because it improves people’s lives directly – and because consumers love to see brands giving back to the wider community.

When customers see that a business is actively supporting charitable causes, they are more likely to develop a sense of loyalty and trust towards that brand. A recent survey found that companies with a good CSR rating achieve returns that are 19% higher than those with a poor rating. Additionally, 39% of business owners in the same report said that they think CSR can boost sales, so there’s a growing consensus that being (and presenting yourself as) socially responsible can have many advantages in terms of new acquisitions, repeat business, and overall profitability.

2. You’ll better communicate your company values through your philanthropic efforts

As a business owner, it’s important to align yourself with the right charity (or charities), because these partnerships will send a clear message to stakeholders, staff and customers about what’s important to you.

Choosing the right charity partner for your company is no mean feat. You’ll need to carry out some research into the organisation’s purpose, mission, community presence, and how they prefer to work with corporates. For example, some will benefit the most from straightforward donations, while others will value volunteers for projects that are happening on the ground.

Smaller companies often choose to work with a local charity that has particular meaning to their audiences (and where the impact of their donations can be felt more significantly), whereas larger firms often decide to set up partnerships with not-for-profits with a wider reach and scope. It doesn’t matter too much which approach you take, as long as you are clear about what you need and consider how your choice will impact the way your company is perceived.

3. You’ll boost staff engagement and morale

Employees are more likely to feel proud of and committed to your business if they believe the company is making a positive impact on society. This sense of pride can lead to increased job satisfaction, higher levels of engagement, and reduced turnover rates – as well as a stronger company culture overall.

Involving employees in charitable activities, such as volunteering opportunities or fundraising events, can foster a sense of community and teamwork within your company that is difficult to replicate through other means. It will also give employees a chance to contribute to causes they care about, which can be highly motivating and fulfilling.

To boost engagement even further, why not ask your staff members which charities they would like to support, and ask employees to vote for the initiative that means the most to them?

4. You’ll widen your audience

You are, of course, getting involved with a charitable cause because you simply want to have an impact outside of your own organisation. However, your investment will naturally add a new dimension to your marketing plan.

Whether you’re sponsoring an awards dinner, providing refreshments for a fun run, getting a team together for a sports challenge, sending essential items to a food bank, volunteering at a soup kitchen, donating a prize to a charity raffle, or planting trees at a local school, you’ll be placing your brand in front of a brand new network by showing up for your charity – and you’ll be shaping your public image in the process. Make sure your marketing team are fully aware of any strategic partnerships and are prepared to leverage opportunities for additional exposure.

5. You’ll access tax advantages

We can’t touch upon the benefits of donating to charitable causes without mentioning the impact this could have on your business fiscally.

UK businesses can enjoy tax advantages when they donate to registered charities. Charitable donations are typically eligible for tax relief, meaning you can deduct the value of your donations from your total business profits before calculating their corporation tax liability. These tax benefits can make charitable giving a very financially savvy strategy indeed!

There are different rules for limited companies and sole traders/partnerships. Limited companies will pay less corporation tax when they give the following to charity:

• Money
• Sponsorship payments
• Equipment or trading stock
• Property, land or shares
• Secondment arrangements (where you temporarily transfer an employee into a role in a charity)

If you are a registered as a sole trader or a partnership, you won’t be able to make a charity donation as a tax-deductible business expense and will need to record it as either a non-business transaction or a personal drawing. Be sure to speak with your accountant or finance team for more information and to clarify your position.

6. Giving back feels great!

You likely set up your business because you wanted to make a difference in some way. So, why not use your humanitarian spirit to help those who are in need? There’s nothing more fulfilling than using your money and your position for the greater good – and with so many clear benefits to supporting local or national charities, we believe that charitable partnerships are a vital part of any company’s operations.

Contact the outsourced finance directors at Dartcell for advice on how to structure your charity contributions in the most tax-efficient manner, or to get help developing a charity or CSR strategy that aligns with your promotional and financial objectives.