Wednesday, October 29, 2008

Tapping small businesses for money, in-kind donations, and volunteers

Small businesses are giving, and all you need to do is ask. A recent article by the Chronicle of Philanthropy took a look at giving habits of businesses. The study included 1,033 businesses, half of which were small businesses (with 2 or less workers). It found that many small business owners (43%) thought they should be doing more charitable giving.

That is a large proportion of businesses that would like to be doing more giving. Now your job is to ask. Some may think targeting small businesses is a waste of time (they don't have a lot of money, they never give cash, etc), but I can tell you that isn't the case. The study found that "66 percent of those who give through their company donate cash, while 51 percent volunteer, 41 percent give services, and 39 percent contribute products", with the median amount given between $500-$2,000 in cash.

Plus, a huge advantage of asking small businesses for their support is that you typically will get an answer immediately. While large corporations and companies often have complex processes to receive donations, which include paperwork and waiting 1-6 months until you hear anything, small businesses are the complete opposite. You can often walk in the door of your neighborhood restaurant and walk out with a gift certificate in less than 10 minutes.

So, now you know it is worth your time, but how to make the case? For most businesses you only will have to explain what your organization does and why you need a donation. Although, some businesses may require a little more persuading. For those, just convince them it is a good marketing tactic. In fact, the study found that 43 % of small-businesses use their giving as a way to promote their company.

Make sure you highlight this benefit to businesses when asking them for support. Some may ask "How effective is the promotion tactic really?" Well, a 2007 study that looked at corporate giving over 10 years found that "for every dollar spent 2 to 3 dollars is returned in sales." Now obviously this will vary business to business, but that is a pretty decent return on investment. Don't forget to mention that their donation is tax deductible!