While it’s common to hear that small business owners get the chance to work at what they really love to do, it’s also true that every business has a bottom line. Owners and employees work tirelessly to make the best out of their small business that they can, often with significant risk. As such, any small business that can invest in doing charitable and social good in their community is truly going beyond the call. As we approach the holiday season, a time when goodwill and philanthropy are often highlighted, the question arises – can my business make a meaningful social impact and achieve social goals while also remaining committed to important financial goals?
The Meaning of “Meaningful”
In a recent article for the Huffington Post, RBC’s Andrea Bolger identified “Meaningful business” as one of the year’s top six trends for small businesses. She defines those who pursue “meaning” as “the.. entrepreneur who is driven as much by social and environmental goals as by the pursuit of profit.” She cites examples of meaningfully-minded businesses across demographic lines, from young socially conscious entrepreneurs to their more established forebears aged 45 and over. Prevailing opinion has long held that non-profit and charitable organizations existed in a completely different sphere of influence from traditional businesses. It seems that, according to Bolger and other analysts, the divide between these models is shrinking rapidly. Businesses are increasingly tailoring their for-profit work to achieve some form of socially or environmentally beneficial goal: TOMS Shoes are an oft-cited example. This shoe business created a “one for one” model which donates footwear to people in need equivalent to every pair sold.
Small Business, Big Impact
A study carried out by the Canadian Federation of Independent Businesses in 2012 showed that fully three-quarters of small firms in Canada make financial donations to charities or other non-profit activities in their communities, and about the same proportion donate goods and services. The two sectors that contributed most significantly? Retail and hospitality. Creating involvement and keeping an active approach are key suggestions that will help keep goodwill in focus for your business – make social and philanthropic goals part of your business plan the whole year round, rather than introducing them suddenly at a specific point in time. Generate interest and participation at all levels of the business and even within your customer base. These efforts need not even be financial in nature: whether you’re volunteering for a park cleanup or generating donations for a pledge drive, structure and integrate them the same way you would any traditional business objective.
If your small business is preparing to make a charitable donation, you should examine the methods by which the contribution is made in order to maximize its efficacy and the ability to claim for it on your tax return for the year. You can either donate personally as a shareholder, or through the business itself. There are limits to the percentage amount that can be claimed on any given donation, whether made by an individual or by a business. Get to know the regulations in your home province, and discuss the matter with a financial professional to see what works best for you. We found an excellent guide penned by Jacqueline Power at Advisor.ca: click to read through it and discover some example situations that might help you make the best of your charitable efforts.