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May 22, 2017
3. It costs you real money and time
Some worthy causes consistently get all the media attention, such as breast cancer research. The three top breast cancer organisations typically have events with tiered sponsorship levels, and attract large companies who gain terrific publicity for their connection.
But if you don't have much money to donate, your contribution will be a mere drop by comparison. Yes, they will gladly accept your donation but in terms of doing anything for your business outside of a tax deduction and a feeling of altruism, your contribution will seem for naught.
If you're a small business, you may be better off supporting a lesser-known charity that really needs your help or which asks for tangible, practical donations which make an immediate impact, such as hygiene items for homeless people, clothing for women in refuge houses, or old bedding for animal charities.
In general, it makes more sense to support a local non-profit organisation if you are a locally-based business, and a nationwide charity if you have offices or shops across Australia. It makes the least sense of all to support an overseas charity.
4. You may not be able to leverage it
Unless you donate serious amounts of your products and services, cash or staff time, you are unlikely to have much "pulling power" to set up a special event, or to garner mentions in media releases.
Most charities won't even agree to let you use their logo unless you donate over a certain amount or become a major sponsor.
5. You must make sure it has charity status
The national charity regulator, Australian Charities and Not-for-profits Commission received paper records from the Australian Taxation Office in December 2012 of more than 56,000 charities. By August 2015, they had revoked or removed over 9,000 charities from the Charity Register because they were no longer operating or had not met their reporting obligations for the past two years.
Imagine you've been innocently donating to a charity or non-profit which is operating but not in accordance with regulations. Consider the real risk of being tarnished by the loss of consumer and supplier trust in your business if you were associated with a disreputable organisation - through no fault of your own.
6. Lack of transparency
What does your charity or non-profit organisation actually do with your donation? Their administrative costs are notoriously high - and the lack of transparency is a key trust issue for many companies.
Would you really want to ask your customers for help to support a certain non-profit only to discover it was a scam?
The American Red Cross gained worldwide headlines for wasting half a billion dollars of donations after the Haiti earthquake. Closer to home, there were similar accusations of profligate waste and incredible delays in directing aid for the 2004 Boxing Day Tsunami.
7. Don't bother unless it has strategic alignment with your business
As a business owner, you will receive many pitches for your participation - and more so as your business profile grows. But the point is to choose a charity which has a natural strategic alignment with your company.
Why not take the lead and determine before you're approached which charity best suits your needs before you invest large sums in donating products, services, time or money. Don't forget, money or products you may be able to claim deductions for - but your time is precious so don't waste it on one that doesn't help you achieve your aims, too.
Depending on your level of assistance you could ask for the co-naming of a special event day, logo inclusion on your website and marketing materials, distribution of your marketing materials, favourable siting of expo stands, sponsorship rights, media coverage, signage rights, hospitality packages, the right to "contra" products instead of cash donations, and much more.
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