On a regular basis, our clients ask us to put together an ad (print, online, a logo with a tag line, whatever) for some non-profit event which they’ve sponsored or to which they’ve donated money or resources. Part of the discussion is usually about getting some promotional mileage out of the expense, especially since the money usually gets pulled from the marketing budget. After all, the non-profit it providing some level of visibility in exchange for the donation or sponsorship.
Is the donation worth the money? Usually not.
Do we suggest not making donations? No.
Is there a better way to leverage money spent on donations and sponsorship? Yes.
Most Donated Money is Largely Wasted (from the company’s point of view)
Let’s start here: From a marketing standpoint, most donated money is wasted. Sure, for most causes, the donated money is put to good use so good comes from it. However, OUR JOB is to help our clients make more money for the owners and shareholders, to keep people employed and employ more through growth, and to grow the business and its available resources. With that in mind, we want our clients to get as much value from anything they want to spend marketing dollars on and donations typically yield little to no return (from a marketing standpoint).
Don’t Donate Because it’s a “Write Off” (because it’s not)
The whole “write off” thing around tax deductions is largely misunderstood and over-sold. Only C-corps (which are essentially treated as individuals) can give tax-deductible cash donations as a business expense. So, unless you are a C-corp, you (or the owner) may as well pay yourself (and pay taxes on that) and then make the donation from your own pocket to receive the deduction on your personal taxes.
This article from the Small Business Administration about charitable giving simplifies it pretty well and this article from Fox Business really clarifies it with examples relevant to sole proprietors, S-corps, and partnerships.
In most cases, cause-related marketing — especially if something is received in return (a banner, logo placement, mention, etc) — will be treated as a normal business expense. Cash donations made for nothing in return will be treated as a personal donation and moved onto your personal taxes, except for C-corps.
What’s the point of the tax lesson? If the money you spend is going to be treated like a business expense, use it strategically and smartly.
How to Get the Most Out of Donations (Simplified)
Getting mileage out of the dollars your company donates is easy and can even reduce the amount of work you do considering the various requests for donations you receive.
- Set Your Budget
- Pick Your Strategy
- Be Consistent
- Promote It!
Picking a Strategy for Giving: Align Yourself with Something
A clear strategy for your cause-related makes it possible for anyone to decide whether or not you should give to a specific request. You only have to ask, “Does this fit our strategy for giving?” If yes, consider it. If no, don’t. Bam! It really does make future decision-making easier.
The smaller your budget, the more specific you probably need to be but the idea is to align yourself with a cause, or even a specific organization, whose goals serve or are related to your customers’ interests and what you do. If you sell mountain bikes, you should probably donate to the groups that maintain the trails in your area. If you sell lumber, Habitat for Humanity might be a great group. If you sell cars, consider promoting anti-texting-while-driving groups and awareness. In some cases, it might make more sense to simply “think local”. For instance, a plumber who serves a specific area may get the best results by sponsoring community events or kids’ sports teams.
Be Consistent: You’re One of Them Now
Once you’ve picked your strategy and made your alignment(s), pick specific events and always be at them — whether they are every year or every month. In marketing, we call this “making touch points” because now you have a great opportunity to create multiple touch points with the individuals involved in the event/cause/whatever — and this is how you start getting the direct benefit of your donations and sponsorship.
The best way to do this is to put the events on your marketing calendar and in your budget. Plan them out just like any other marketing, right up there with print mail campaigns, Pay-Per-Click campaigns, and trade shows. Oh, consider helping them promote the event and/or cause via your website, Facebook page, and other materials from invoices to brochures.
You see this done effectively at various events you attend. The headline sponsor is often the same every year (or they created the event, which you could do) and you’ll definitely see many of the same vendors year after year.
People who are involved in the cause appreciate your involvement and eventually see you as part of their team — one of them, on their side — and many of them will show their appreciation by supporting your business in return. This is also true of employees. Employees appreciate employers who do good things and tend to be happier, feel better about their workplace, and stay with the company longer.
Promote It: Yes, Tell Everyone Who You Support
Finally, promote your efforts through press releases, posts to Facebook, promotions on your website and sales materials, in your print and online ads, and wherever else you want. Doing so helps the organization you’ve aligned with, broadens your reach to other people who support that cause, and reinforces your support with those that saw you at the event(s) you sponsor. Besides, as they say, “any press is good press” and this is definitely good press. So, take advantage of the great excuse to send out a press release.
Treat “Giving” as Marketing and Be Sincere About It
In conclusion, just be sincere about your cause-related marketing. It’s 100% OK to benefit from putting your marketing dollars to good use. It’s good for your shareholders, your employees, and even helps a cause. Get the most mileage out of you can with some planning, a clear strategy, consistent involvement, and promotion.