October 13, 2021

What are the benefits of corporate donations to charity?

Philanthropy may seem a relatively new concept in the world of business, but corporate charitable giving has actually been around for some time. In Ancient Rome, businesses were expected to pay taxes to fund military campaigns (that were believed to be for the good of the Roman populace). And by the eighteenth and nineteenth centuries, philanthropy was common amongst the growing number of wealthy middle-class, particularly the new industry owners as a result of industrialisation. A prime example is Thomas John Barnardo, who established hundreds of homes for children to alleviate them from poverty (and who is still a household name thanks to his charitable organisation Barnardos).

However, it wasn’t until the 20th century when community development and social responsibility was recognised as going hand in hand with business growth and success. George Cadbury, the founder of Cadbury, was one of those thought leaders, founding the Bournville Village Trust in 1900 to provide safe, comfortable living conditions for his workers. He certainly wasn’t alone in this thinking. Today, many companies give generously to charities on a regular basis. Aside from the sense of reward and satisfaction that comes from giving back to the community, there are actually multiple benefits to corporate charitable donations. In this article, we’ll be outlining a number of reasons why businesses should regularly give to charity. 

Why do companies give to charity? 

Team morale

It’s a simple fact – when you do good at work, you feel good. And when you feel good at work, you are more likely to have a positive mindset towards your role and company. It’s no secret that being in a good mood increases your productivity and the quality of your work – one study showed that happiness can make you 12% more productive.

This is the essence of why the philanthropic business model works. It causes companies to look beyond meeting their KPIs and generating profit to build a more generous, positive workplace environment. Your employees will feel proud to be part of a team that is making a real difference to the lives of those in need and are more likely to view the company in a good light as a result. Workplace volunteering makes millennial employees twice as likely to rate their corporate culture as very positive according to one study. Fostering a productive and happy office culture also improves your chances of retaining your current workforce and attracting new employees. All this good stuff contributes to a successful business – a happy, enthusiastic and productive team who believe in you as a company.

Shines a positive light on your brand

Corporate giving also makes your business look good to the public. Think of it as another marketing channel – being a philanthropic business is a great way to raise the profile of your organisation and improve your reputation amongst your audience. According to one study, millennials spend 70% more on brands that support causes they care about. The Charities Aid Foundation also found that 51% of British adults are more likely to buy a product or use a service if a company donated to charitable causes.

Corporate philanthropy is also a rich source of audience engagement, particularly with younger generations who are more likely to engage with brands on social media to discuss social responsibility issues. By being a vocal ally to disadvantaged groups or causes you are passionate about on social media, you will be clearly communicating your company’s values for all to see. It also shows that your support is genuine by backing a cause even when it’s not trendy to do so.

What you don’t want to happen is to rally behind a cause that doesn’t align with your company brand values simply because it is popular or current. This approach often attracts public scrutiny for piggybacking on a movement to raise your business profile. For example, during Pride 2019 various companies were accused of ‘pinkwashing’ their branding by using the international celebration of LGBT rights as a PR stunt. M&S once came under fire after releasing an LGBT sandwich for the event, which resulted in them being accused of tokenism. Corporate charitable giving will only improve your brand’s reputation and awareness if your engagement is authentic and you aim to make long-lasting change beneath the publicity.

Helping the community

Corporate charity giving does not necessarily have to be on a national scale. Giving back to your immediate community also has multiple benefits for businesses, particularly if you operate on a local level. For one, the locals will notice the effort you are putting into improving their community, consequently raising the reputation of your business. Two, by aligning your donation choices with local causes that your employees care about, you are more likely to get greater engagement from your workforce when it comes to raising funds and volunteering. Three, through your fundraising efforts you are likely to directly engage with your current or prospective customers, creating additional opportunities for your business to grow and strengthen your customer base.

Specialist training and support

By forming a partnership with a charity, companies can increase their awareness of a certain issue and use that as the basis of a training program or initiative that offers tangible benefits for their staff. For example, Campaign Against Living Miserably (CALM) provides corporate partners with mental health training. This helps to reinforce the fact that corporate giving is often a mutually beneficial relationship.  

All of the above points are worthy reasons to invest in corporate charity giving within your own business. To go one step further than supporting a cause as a one-off is to look into ways you can integrate corporate social responsibility into how you operate.

But hang on, what is corporate social responsibility?

What is corporate social responsibility?

Corporate social responsibility (CSR) is the self-regulatory model businesses use to assess their impact on society and how they can develop ethical business processes and practices. The idea is to work out how you can improve the way you operate to benefit all your stakeholders (employees, customers, investors, local communities etc). When done correctly, corporate social responsibility should form an integral component of your company’s ethos and values.

What is the purpose of corporate social responsibility?

 The purpose of corporate social responsibility is to have a positive, lasting impact on society which goes beyond throwing money at a good cause. Of course, there is still room for traditional corporate philanthropy as the aid sector still needs funding to continue its good work, particularly in our new age of contactless payments and the decline of cash donations. But companies should also recognise that they can have a much more powerful role in community development and alleviating social issues by going beyond financial support.

When utilised in the right way, CSR should help to drive long-lasting change. A good example of a brand doing exactly this is Ben & Jerry’s and their support of same-sex marriage. The ice cream giant renamed two of its ice creams (Chubby Hubby to Hubby Hubby, their apple-flavoured ice cream to Apple-y Ever After) in support of legalised same-sex marriage in the UK. But they didn’t stop there – when Australia didn’t legalise same-sex marriage, Ben & Jerry’s refused to sell same-flavour double scoops in their Australian stores in response. They also placed rainbow-decorated post boxes in each of their Australian stores, politely encouraging their customers to contact their local parliamentary representatives about the issue. They even promised to deliver all handwritten letters to the Australian Parliament themselves.

Inspiring examples of corporate charity partnerships

A successful corporate charity partnership should represent not only the charity’s long-term goals but also the company’s brand identity.