The Best Ways for Businesses to Donate to a Cause

Around 75 percent of small businesses donate to charity every year, according to the U.S. Small Business Association. It pays off – consumers want to spend money with businesses that care about causes or are involved in their communities.

MORE: The Three Basic Ways Corporations Gain Through Their Philanthropy

But that begs the question: What are best practices for giving to a cause or volunteering time to charity? Try these tips.

Where to donate

First, don’t choose a charity at random. The Wall Street Journal advises business owners to choose a cause that means something to them and their employees. Owners should consider asking employees for their input on which cause to support.

Ideally, the charity should have some connection to the business. For example, a grocery store could choose to support a local food bank.

Finally, choose charities that are close to home. Doing so makes a business’ efforts more visible to both employees and customers. Plus, it’s much easier to volunteer with and donate physical goods to organizations that are close by.

Donate time or Money?

Speaking of volunteering, be open to the idea of being physically involved with a charitable organization.

The Wall Street Journal posits that “hands-on, face-to-face involvement can have even more impact” than just writing a check. And, as a bonus, volunteering is a great way for businesses to be involved with causes when the business can’t afford to make large donations.

Employees often enjoy the opportunity to volunteer as well, and it can help them feel more connected to the business. Businesses can even consider getting customers involved in donating or even volunteering with their cause of choice.

Just remember that not all employees will want to volunteer. It should not be a requirement and they should not be made to feel awkward if they choose not to.

Do your due diligence

For a business donation to be tax deductible, make sure to choose a charity that is a 501(c) (3) organization. Check online with the IRS to make sure the company is registered. Also remember to keep good records so you have that information during tax season. All of the rules on tax deductible donations are in the IRS tax code.

And for more information about how the organization spends the money it brings in, check out Charity Navigator. The site evaluates charities and rates them based on their financial health and accountability and transparency.

Start giving

There’s no downside to charitable giving, and everyone comes out ahead in the end. The charities clearly benefit from donations and volunteers. And businesses show their communities they’re not hanging around just to make a profit – and that’s something customers like to see.