Charitable Contributions and How They Give Back to You
Contributing to the good of your local community is fun, its feels good and the happy by-products for your business are free publicity, brand recognition, building stronger relationships with your existing customers, meeting new prospects face-to-face, and tax deductions, of course!
How it Works…The Basics
You’ve probably received a few requests yourself – It is usually a formal letter on printed stationary, soliciting donations, pledges, and/or free products or services from your company. We recently received a donation request from one of our local high schools…they were holding a fundraising event with a silent auction in order to raise money for a choir trip across the country.
So here you are helping:
- Students: by giving them an opportunity for a journey and great learning experience.
- Parents: by taking the financial burden off of them, when supporting a fund raiser.
- The School: by helping them achieve their goals for an expanded education experience, that would be otherwise out of their budget.
- Students: they could be future clients, but for now, immediate brand ambassadors.
- Parents: parents are busy people who work, own their homes, and need you whether they realize it or not.
- School Employees: again these are busy people who will at some point need your services.
- Local Community Supporters: When a community gathers together for an event, they are there to do research and see who else cares, or shares an interest in the same organization. Don’t forget the power of business to business relationships, and the referrals they can drive.
Choose the Right Charity for You
Choose a charity that you can stand behind, but don’t forget your demographics. Know your audience and target the communities in which you specialize. For example, if you are in the business of high end kitchen remodeling, you will want to contribute to charities that are hyper local where you want to build your brand. If you are a plumber and specialize in emergency repair your target market would not be new homes. Many charities will reach out to you in order to request a donation, while others may not even know who you are. Do not be shy to seek out organizations that you would like to donate to. Ask around in your community to see who is holding fund raisers, or you could just Google it.
It is one of the most beautiful compensations of this life that you cannot sincerely try to help another without helping yourself. -Ralph Waldo Emerson
Here is One Scenario
Silent auctions are one of the most common forms for fundraising for local schools, nonprofits, and organizations. For a silent auction, when donating a give certificate, or a certificate for service, remember to include collateral. This is an opportunity for branding to get your name, your brand and your services out into the public eye. Include a list of services, a note on letter-head talking about your business and why you support the cause. Send a stack of business cards with the donation, to be displayed at the event as well as for the organizers. If you are invited to the event, don’t forget to go. This is an opportunity to meet your prospects face to face, and show that you are involved in the community. Take this time to network, make friends, and let the face behind the brand be seen.
Don’t forget that the person who listens attentively is more likely to be remembered than the one that talks incessantly. Engage in conversation and you will be more likely to be remembered. Have your elevator pitch well rehearsed to be short, but memorable. Your elevator pitch should be 15 seconds to 2 minutes. Although, in the case of face to face networking at events, I highly recommend keeping it short and sweet, and then turning it into a two way conversation. If the opportunity presents itself exchange business cards or contact info.
Let’s Talk Numbers
The IRS thoroughly covers how to deduct contributions in: Topic 506 – Charitable Contributions. The bottom line on this, get paperwork, and talk to an accountant. Donation of services can generally be deducted in the full amount and hard goods are generally deductible at the market value. Although your actual contribution may be valued at $500, your actual expenses for the contribution are much lower. While you will have payroll and other expenses associated with the donation, the actual cost of the donation is much less than the value of the donation.
Close the Sale and Grow Referrals
At the end of the day you will have at least one guaranteed customer who bid on your item and won at the silent auction. Now it is your chance to close the sale, and turn this customer into a lifetime client. Then do the math, what is the lifetime value of the client? Did you get your monies with your donation, and at the same time make yourself feel good about supporting a worthy cause?
Go out there, do it, have fun, feel good, and grow your bottom line!