Even though corporate philanthropy is not mandatory, businesses that tie corporate philanthropy to their operational strategy create greater social value for the community. The benefits of a successful corporate philanthropy strategy also extend to the brand and workforce. Today, society is well-informed about the value of economic, social, and environmental responsibility, making corporate philanthropy a priority area for business. Engaging in corporate philanthropy can be costly, but it worth these potential benefits.
Increased Employee Engagement and Productivity
A successful corporate philanthropy strategy leads to high employee engagement and retention because of a deeper connection with the company. Studies show that most employees are usually willing to participate in philanthropic endeavors through corporate volunteerism, nonprofit support, and matching gifts, which improves their engagement level. A high engagement level among employees translates to increased productivity, lower absenteeism, and reduced turnover. Businesses that engage employees when creating corporate philanthropy initiatives realize a boost in their involvement levels.
Improved Brand Awareness and Reputation
Businesses that align themselves with charitable endeavors realize an improved brand awareness, which gives them an edge in the competitive markets. Corporate philanthropy initiatives, such as matching gifts programs, crowdfunding, and donations under the company’s name, make business brands more visible because of frequent mentioning in community-targeted initiatives. A good brand reputation with partners, community, customers, and employees translates to growth because of increased profits.
Attract Top Talent
Employees are among the most valuable assets to an organization because their knowledge, experience, and abilities cannot be replaced. As society is shifting focus on businesses’ engagement in social responsibility, qualified employees only want to work for businesses that positively impact the world around them. Companies that build successful corporate philanthropy initiatives are better positioned to attract and retain top talent that helps businesses improve their overall performance.
Every business goal is to maximize profits for its stakeholders or owners while maintaining corporate social responsibility. Since studies show that customers are more inclined to choose cause-branded products, corporate philanthropy correlates with the profitability of a business. In addition, 87% of customers opt for products from companies that participate in charitable causes they care about. Businesses can improve their sales by using a cause-branding approach and marketing their philanthropic activities to the public.
Business entities that engage in charitable causes can deduct their contributions or property made to qualified charitable organizations if they itemize the deductions. The tax deductions can go up to 50% of their adjusted gross income. Nonetheless, businesses must consult with finance experts to avoid non-compliant issues with tax authorities.
A successful corporate philanthropy initiative increases business performance in addition to the altruistic motivation to improve the community’s welfare. However, businesses focus on the rewarding aspect of corporate philanthropy (tax deductions, increased sales, and increased productivity, participating in charitable causes helps them create a strong connection with society.