Small businesses everywhere are asking the same questions: What is corporate philanthropy? Does it actually matter to customers, employees, and investors? Is it really worthwhile for small businesses like mine?

Large companies don’t have a monopoly on charitable giving. Any organization can benefit from participating in philanthropy—in fact, many consumers and employees expect them to. In this quick guide, we’ll help you understand why by exploring the basics and benefits of corporate philanthropy for smaller companies.

Corporate Philanthropy: Explained

Corporate philanthropy, also known as corporate giving, involves a company donating time and money to nonprofits and other community organizations to make a positive impact. It’s a type of corporate social responsibility (CSR), which encourages businesses to be more socially, ethically, and environmentally conscious to make the world a better place.

Often, corporate philanthropy programs are designed to let employees be the drivers, allowing team members to choose which causes the company supports and how often they want to participate. These are called workplace or employee giving programs, and may include:

  • Matching gifts: Employers match donations made by their employees to eligible nonprofits. For example, an employee gives $100 to an animal shelter, and your company donates an additional $100.
  • Volunteer grants: If an employee volunteers a certain number of hours with a nonprofit, your company gives that organization a monetary grant. Your guidelines might specify that you’ll grant $100 for every 20 hours an employee volunteers.
  • Paycheck giving: Team members can automatically donate a portion of their regular paychecks to the organization of their choice.
  • Volunteering programs: Volunteer time off (VTO) and team volunteer outings allow employees to volunteer for charitable causes on company time.

Companies offer any combination of these programs, depending on their resources and priorities. They might also participate in other types of philanthropy led by leadership, such as giving corporate sponsorships or large grants.

Why Corporate Giving Matters

For Businesses

Companies of all sizes prioritize corporate giving because of stakeholder expectations and the benefits it offers. In addition to driving community impact, corporate philanthropy helps businesses engage employees, boost retention, and inspire customer loyalty.

Just take a look at these statistics about the impact of CSR from Double the Donation:

  • 93% of employees believe companies should lead with purpose. Employees want the businesses they work for to support worthwhile causes. By offering workplace giving programs, you can fulfill your social responsibility while boosting employee engagement, satisfaction, and retention.
  • 55% of employees claim they would take a lower salary to work for a socially responsible company. For many job seekers, CSR and corporate philanthropy are must-haves that they look for in potential employers. By participating in philanthropy and publicizing your efforts to applicants, you can boost employee recruitment and retention.
  • 77% of consumers aim to purchase from companies with CSR initiatives. Corporate philanthropy can give your small business a reputation boost and help you earn more long-term customers. When you’re transparent about your company’s positive impact, you’ll improve stakeholder relationships and increase customer loyalty.

Any corporate giving program will help you tap into these benefits, so don’t be afraid to get creative. For instance, you might use corporate donations as employee recognition opportunities or incentives. When a team member completes a project or goes above and beyond, give them an additional VTO day or a small grant they can direct to the nonprofit of their choice.

For Nonprofits

The most obvious benefit for nonprofit organizations is that they receive more support for their missions, increasing their resources and ability to help the communities they serve. However, organizations also like corporate philanthropy programs because they:

  • Provide an additional revenue source that doesn’t put strain on their individual donors.
  • Engage their existing donors and volunteers.
  • Can provide direct program support and event sponsorships.
  • Help nonprofits access new audiences of potential donors.
  • Connect organizations with like-minded businesses.

Business connections can even lead to long-term partnerships that provide mutual benefits for nonprofits and their corporate partners. For example, your company might partner with an organization to host a series of events, or you could create a special matching gift program where you match gifts to a specific nonprofit at a 2:1 or 3:1 ratio.

For Employees

For employees, corporate philanthropy programs offer:

  • Greater personal impact on nonprofits: Employees who request matching gifts or volunteer grants can easily multiply their impact on their favorite causes without increasing the size of their personal contributions. They may also discover new organizations through your workplace giving programs that they want to support long-term.
  • Happier, healthier work environments: Corporate philanthropy promotes a widespread culture of giving and may increase employees’ trust in their employer. Team-based corporate philanthropy opportunities (such as group volunteering outings) help employees build positive relationships with each other. Plus, studies show that regular volunteering comes with health benefits.
  • Increased fulfillment and job satisfaction: According to Uncommon Giving, “When employees believe that they’re making a difference at your company, they’re much more likely to feel fulfilled and motivated in their roles.” This is especially true if employees can actively direct funds to the causes they believe in.

Offer a variety of corporate philanthropy programs that employees can engage in to help them access these benefits. Give them the opportunity to decide which causes corporate funds should support, whether by requesting matching gifts to specific organizations or voting on which nonprofit a grant should be awarded to. You could even get their input on which corporate philanthropy programs they’d be most interested in when planning your efforts—that way, they’re more likely to participate.

To get started with corporate giving at your small business, start with one small program, like a donation drive or matching gifts. Track participation, ask for employee feedback after you launch the program, and implement corporate philanthropy software to help expand your efforts from there.