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How does CSR and charitable giving boost small businesses?

Turner Little - CSR small business

Charitable giving and corporate social responsibility (CSR) are not only positively impacting society, they’re also having a direct effect on profits for small businesses. Research by Work for Good shows that nearly 70% of businesses report a boost in profits when they have a regular charitable giving strategy.

The study confirms that 68% of businesses also report a positive impact on their reputation too.

Why does charitable giving improve profits for small businesses?

Customers respond well to businesses that give to charity and demonstrate sustainable and respectful practices. And while it’s nice to assume businesses give to charity for other reasons too, there’s no doubt that it’s good for their bottom line.

More than 35% of businesses say that giving to charity leads to more new clients. The research covers 100 small businesses and almost the same number of charity fundraisers, and reveals both positive and negative reactions to businesses giving to charity.

More than 60% of small businesses say that they donate to charity, both in terms of time and money, to make an overall positive impact on society. The survey also reveals that small businesses that donate more than 0.5% of turnover are twice as likely than those giving less, to find it positively impacts their business reputation. They also report it assists with recruiting and keeping high quality employees.

Different options for regular charity giving

Random, ad-hoc donations are always a good thing for the causes your business chooses to support. However, Work for Good says that data gathered during their research suggests that sustained, regular giving will benefit your business more in the long term.

By including a CSR and charity giving programme into your business plan or business model, you will benefit from more of the positive effects on your company. Consumers, employees and stakeholders are all driven by their personal belief system. It’s a logical step for small businesses to include this into their business initiatives and launch CSR programmes that demonstrate positive effects on society, the community and charity.

Small businesses benefit from CSR

CSR is usually confined to large businesses, but SMEs are increasingly catching on to the benefits of having a strategy too. It can seem like just ‘another thing’ to get done when you’re in the midst of running a small business, but with a strategy in place it will become part of everyday business practice.

Studies support this, showing that a strong CSR strategy tends to help attract and retain higher skilled employees. It also fosters a sense of loyalty among employees. Research from PWC shows that an enormous 86% of Millennial employees would think about leaving a business if their CSR values don’t align with their own.

Here are some ways to define and implement a CSR strategy:

  • Involve employees when choosing community projects to get involved with, or charities to support. Collaboration is much easier in SMEs than in large corporations, and it increases engagement.
  • Make it ‘business as usual’, CSR isn’t just a message on your website, it should become part of every day business. Regularly communicate updates on initiatives and keep everyone aware.
  • Communicate the positives. Employees should be told at regular interviews of the positive effects of their CSR and charity contributions.

 

James Turner, Managing Director of Turner Little Limited, says: “A successful CSR and charitable strategy is about much more than occasional bursts of fundraising. By building CSR activity into their business model, small businesses can benefit in myriad ways. From recruiting higher quality employees to fostering excellent teamwork, CSR has a positive effect on people and profits.

 

“If you’re not sure where to start, think about your company’s unique selling points. Can you link a charity or service with your own products or services? Start with your local community, as this is particularly important for small businesses. A report from Raconteur says that ‘the top 1,000 charities soak up 89% of all donations in the UK’. This leaves plenty of scope for small businesses to make a sustainable difference to smaller, local charities. Using your business as a force for good will only benefit you and the future of your company.”

About Turner Little
Founded in 1998 in Yorkshire, UK, Turner Little is a specialist UK and offshore company formation, banking and corporate services provider. Our services include company formation, UK and offshore banking, asset protection, credit correction, trademarking and trusts. Other services include Internet services, mail forwarding, wills and probate. Turner Little’s vision is to offer the best possible service, together with market leading products.

Turner Little and its affiliates do not provide tax, legal or accounting advice. Material on this page has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.