When you look at the charitable gifts that make headlines, individual philanthropists seem to dominate the list. High-profile donations and volunteer work from successful business leaders have become increasingly popular. For instance, David Rockefeller, former chairman of the Chase division of JP Morgan Chase (NYSE:JPM), made nine-figure gifts to his family's namesake university and to New York's Museum of Modern Art earlier this year.
However, businesses of all sizes also make substantial contributions for charitable causes. Although these corporate donations don't necessarily gather as much attention as large individual gifts, they often make a huge impact on the well-being of many needy people. Whether they choose to focus on problems close to home or to look at issues with global scope, these businesses not only gain the benefits of helping others but also build a reputation as responsible corporate citizens. The resulting goodwill can lead to even greater success, as customers who value the contributions of particular companies will often support their efforts by choosing to do business with them.
Big corporate donors give a lot ...
Large companies do a lot to help people in need. Gifts of cash are just one way companies donate; they also often donate their own products. For example, near the top of most corporate philanthropy lists are major pharmaceutical companies that give substantial amounts of prescription drugs to those who are unable to afford them. According to the Chronicle of Philanthropy, Pfizer (NYSE:PFE) became the first company ever to break the $1 billion mark in its giving, and Bristol Myers Squibb (NYSE:BMY) made in-kind and cash gifts that combined to over 10% of its net income.
Many large companies choose to do charitable acts that are connected with their core business. Safeway (NYSE:SWY), for instance, makes major gifts to food banks and other hunger relief programs. Oracle (NASDAQ:ORCL) sponsors a competition in which students create and develop educational websites. Nike (NYSE:NKE) encourages access to athletic activities by providing both cash resources and sports equipment throughout the world. Tying in their charitable efforts with their overall corporate mission emphasizes the commitment these businesses have to fostering community improvement and better living conditions.
... but small businesses can, too
Perhaps the most important thing to realize about charitable giving is that you have to measure your contributions against your own means. Just as individual donors shouldn't feel inadequate simply because they can't give as much money away as Bill and Melinda Gates, so too should small businesses realize that they don't need to give away millions of dollars in cash or products in order to make a difference in their communities. Even small gifts that may seem insignificant to a business owner can make a huge difference in people's lives.
Here are some ways that even the smallest businesses can help others:
1. Sponsor a team.
Sports are an increasingly popular activity for kids, but getting the necessary equipment can be expensive for struggling parents. Having good equipment and real uniforms means a lot to kids, and so helping a team pay for some of those expenses is something they'll remember. Twenty-five years after the end of my Little League career and from 1,500 miles away, I still think about my team's sponsor, Panjo's Pizza, whenever I buy a cheese slice. The small amount you'll pay will get you loyal customers for life.
2. Donate to a charity auction.
Many charities raise funds by auctioning off donated goods and services from local businesses. In order to get the highest bids from their donors, charities will happily work with you to showcase your products in their best light. For every winning bidder, you'll catch the eye of dozens of other auction participants, many of whom will likely decide that they want what you're selling.
3. Buy an ad.
Some charities, such as performing arts organizations, publish high-quality programs that highlight the contributions of their performers. In order to help defray the cost of publishing these programs, most of these organizations sell advertising space to local businesses and individual professionals. In many cases, the cost of these ads is far lower than more traditional advertising outlets, and the connection with an activity that's important to program readers makes a stronger impact than just a standard newspaper ad.
4. Dump your junk.
Competitive pressures force many businesses to upgrade their technology and equipment almost constantly. Even if old equipment may no longer do you any good, it can be extremely useful in the hands of certain groups, such as educational and vocational training programs. And while your old computer may not meet the demands of your particular occupation, nonprofit organizations that often need only basic technology for word processing, spreadsheets, and other general application programs may keep it up and running well into the future.
As a business owner, you need every advantage you can get. Unfortunately, many people perceive businesses as being focused solely on personal profit and having no true concern for the people and communities they serve. By making contributions to worthy charities, you can show your dedication to improve your community in a way that not only will help the lives of others but also give current and potential customers comfort in knowing that you care about them.
For related reading:
If you're looking for five strong charities, then look no further than the Motley Fool's annual Foolanthropy campaign. With causes ranging from environmental activism to teaching low-income kids how to become entrepreneurs, you're sure to find something you support.
Fool contributor Dan Caplinger is still working on his gift giving for the season. He doesn't own shares of the companies mentioned in this article, though he does have a call option on Pfizer. JPMorgan Chase is an Income Investor selection. Pfizer is an Inside Value pick. The Fool's disclosure policy is always good business.
