We are quickly approaching that time of year when firms start getting emails suggesting they make donations before the current tax year ends. And, of course, the donations should be to the firms emailing the suggestion.
But how do you decide which donation request to approve and which to decline?
And even with sincere-sounding names and messages, so many turn out to be scams that will cash your check and run. They even create fake websites to look real if you check them out.
I once worked for a firm where the president couldn't say "no" to any charity asking for help. Someone in accounting alerted the marketing department and we realized that we were getting no visibility for our contributions.
But how could we control the good-hearted nature of the firm's president and make sure the donations were going to organizations that really existed and were aligned with the firm's goals and desires?
In the end, all our concerns were answered in one word: PROCESS!
In all four organizations where I have been a full-time employee, I helped create processes to make donation decisions. The basic steps are as follows:
First, look at your firm, its needs, the industry you're in, and factors relevant to how you do business. Select types of charities that make sense for your firm. For example, in all four A/E firms where I was employed, we decided to support causes related to children and education, especially technical education. In addition to writing checks and adopting schools, we also supported programs like the Mathcounts competition/club.
Then look at local and regional politics. We decided to contribute to social causes, especially those that could have a positive outcome for the firm, but not to individual political campaigns. The exception was one city where we had an office, where mayor had a history of vetoing the selection of any firm that wasn't on his list of contributors. We gave $100 to every mayoral candidate so we'd be covered no matter who won.
We looked at all the scammers trying to separate us from our money. I learned that sending information on a fake charity for the purpose of scamming money was considered "mail fraud," a Federal felony. So I told everyone who contacted me to send their information via US Mail. Anything delivered in person or by courier, faxed or emailed would be trashed, unread. This totally kept the scammers away.
Finally, consider the potential for public visibility: would we be thanked publicly or just get a receipt in the mail; would we see our name listed in an advertisement; would the donation give us access to someone we wanted to meet, and so forth.
I believe strongly that individual charity should be anonymous so that it doesn't adversely impact any relationship that might exist between giver and receiver. But that's individual contributions. Corporate contributions, on the other hand, can be considered a form of advertising.
So we determined how much we could afford to give (in one firm, a percentage of revenues; in another, a more arbitrary decision) and where we could get the most impact for our contribution, and set our budget accordingly.
A firm's donations MUST be a business decision. Even large foundations would quickly go broke if they gave huge sums of money to every group that applied for funds. For a small company with fewer resources, such decisions must be made with care.