The Value of Small Business Philanthropy

By Julie Knudson | Posted November 06, 2013

Small business owners often play a key role in their local communities, and giving back—by volunteering time or donating money to worthy causes—is something most owners are eager to do. Philanthropy provides a host of ways for small business owners to do good things, both for the community and for themselves.

A strong commitment to philanthropy may also help attract and retain like-minded employees, says Russell L. Hodge III, CFRE, managing partner at The Hodge Group, a fundraising and philanthropic consulting services company in Dublin, Ohio. When prospective employees know your business "has a greater responsibility to the community as a whole than just the bottom line," it can be a significant advantage when competing for talent.

Employees who are given the opportunity to participate in the company's philanthropic activities—volunteering their time, donating money to worthy causes—often feel a stronger connection to the business. "I think it makes for a better workplace," Hodge says.

Philanthropic initiatives may also net a bit of free publicity in the form of coverage in the local newspaper or an interview for a radio or TV station. These activities can also provide great fodder for blog posts and other social media channels. Hodge offers some words of advice to small businesses wondering how to do philanthropy right.

How to Be a Small Business Philanthropist

Create a Culture of Philanthropy

Before a small business donates time or treasure to a cause, it should first cultivate a culture of philanthropy within the organization. This will bring the pieces together when it's time to engage the company's philanthropic resources, and Hodge says it's also maximizes the efforts of everyone involved. "First you make it part of the culture of your small business." He stresses no one in the company should be required to participate, but adds that one expectation of your business's culture may be "that people do give back."

Support a Cause in Your Wheelhouse

Whatever industry you're in, look for opportunities to make an impact in the same vein. For financial organizations, that may mean work in financial literacy. If you own a food truck, you might focus on sustainable food or local urban gardens. "It should in some way reflect what you do as an organization," Hodge says. This holistic approach will keep employees engaged with the business's philanthropic efforts while providing consistency across your entire brand message.

Don't Focus on Dollar Amount

You may not have big bucks to donate, but don't let that be a deterrent. "You don't have to give a large amount of money to make a difference," Hodge says. He encourages small businesses to stop trying to compete with large organizations. "Look for smaller not-for-profits, where you can have a more significant impact and be more intimately involved with the organization," he explains. Local groups often don't have the resources to solicit donations far and wide—small sums, in-kind gifts, or volunteer time can make a huge difference.

Make Time for Philanthropy

With all the pressures facing small business owners, it can seem a Herculean task to carve out time for volunteer work. But Hodge says that creating a schedule for employees to donate their efforts isn't impossible. "It might mean leaving work early or coming in late, but you have to allocate some time for them to do it." Community-based projects are often available on the weekends, as well. Consider trading comp time or another valued perk when employees donate their free time to company-sanctioned causes.

Look to Your Business Peers for Ideas

Still not sure how to get started? Hodge suggests looking at other small business owners around you. "Talk to your peer group," he says. "What are they doing?" Where are they doing it?" Finding the right cause will probably require some true legwork, so get out from behind that desk. "Drive out and visit a school, or visit the program, and touch and see it to see if it fits you," Hodge says. As the leader of a small business, it's up to you to decide what causes you want to support.


Julie Knudson is a freelance writer whose articles have appeared in technology magazines including BizTech, Processor, and For The Record. She has covered technology issues for publications in other industries, from foodservice to insurance, and she also writes a recurring column in Integrated Systems Contractor magazine.

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