How do you give back? Sure, we can donate our time and money volunteering.
However, it is becoming more common to look for alternative ways to assist the community, like supporting businesses that lead with a purpose besides making money, particularly among the younger generations.
Let’s look at how this trend may affect small to medium business owners and why it is actually beneficial in more ways than one to give back.
Gen Z Supports Companies with a Strong Desire to Give Back
According to the Australia Giving 2019 report, younger generations (like millennials and Gen Z) are more likely to go with companies that have a purpose other than just making money. Considering Gen Z will make up 40% of customers by 2020, the trend is hard to ignore. Plus, giving back to the community has proven benefits of attracting and retaining staff, and creating a strong, socially-conscious culture.
While it may seem easier on the money-front for large corporations to give back due to their high annual revenue, small to medium enterprises (SME’s) can still make a significant impact.
How much should small to medium businesses donate
Australian small and medium enterprises give $8.5 billion to charity every year, according to Philanthropy Australia. Additionally, a report from investment firm Koda Capital revealed 70 percent of SME’s donated an average of $5800 in 2018.
While there is no set number in terms of how much you should donate to a charity, companies tend to donate a small percentage of their profits, for example, 6%.
It’s also important to note that donations of $2 and more are tax-deductible if donated to government-endorsed deductible gift recipients.
Small Businesses Making a Difference
Small businesses around Australia are already paving the way and giving back to Australian and international charities. Here’s just a snippet of what they’re doing.
The Grateful, a small boutique and bouquet company in Newcastle, NSW are giving back to the community in more ways than one. For every flower bouquet purchased, the company donates another one to a patient at the Ronald McDonald House or the John Hunter Hospital. They also pay $1 to the Got Your Back Sista charity, which helps fund self-defence classes for women affected by domestic violence with every $0-$25 spent in-store.
Started by Ali Kitinas, who was 14 at the time, Freedom Scrub offers not only body-scrubs but three tiers of giving back. First, the ingredients are ethically sourced using recycled coffee grinds via collaboration with The Freedom Hub. Then for every Freedom Scrub purchased a percentage goes to homeless children in India via the 87 Cents Project. Finally, Freedom Scrub is an ambassador for B1G1, a global business providing a platform to create an impact via small businesses.
Tips to start giving back as a business owner
If you are an SME owner, and yet to donate to charity, consider these tips to start your impact project:
- Research a charity or project aligned with your values – you won’t contribute your all otherwise, and people will see through it.
- Ask the charity you’re interested in what they need – assuming won’t help.
- Be transparent about where the money is going – 41% of people would donate more if they understood where their money went (Australia Giving 2019).
- Set-up a policy you can refer to if you become inundated with charitable requests and need to say no.
- Encourage your team to get involved to boost morale – as an added bonus you will also create a culture of giving.