Does making donations help your small business

With the holiday season ending, we’re seeing more and more reports of small businesses donating goods and/or services to groups in their communities. An interesting article from the Kansas City Star looks at one small business’ effort to donate blankets to a local community agency.

There are a few things to consider if you are going to make a donation on your small business’ behalf:

  1. Good or services. Will you donate goods or services? The choice can have tax implications depending on the amount you intend to donate and the manner of the donation. Consult with your accountant to learn the most effective way to choose. Keep in mind that if you decide to donate your own goods there might be a public relations backlash. This happens if you are doing it as more of a marketing campaign than a real donation. For instance, in the article the company supplying the blankets is, and they are in the blanket business.
  2. Owner or team effort. Is the owner making the decision or is the whole team. Sometimes it’s a good idea to consider bringing your employee’s and team member’s opinions into the mix. If the organization you’re considering donating to doesn’t align with their values you might alienate them.
  3. Need. You should due your homework and ensure the donation is needed and wanted by the organization you’re targeting. An example of not making sure the need exists is with computers. Many schools will decline offers of computers based on age.
  4. Cost of delivery. How much is it going to cost to transport the donated goods? If you want to ship items to the military overseas have you considered the cost? It might be easier to cut a check.

Donating, even if it’s not during the holidays, is a wonderful idea for small businesses. Make sure you do your homework first so you don’t run into issues.