To Give or Not to Give? Profit Sharing with Your Nonprofit Customers

Are charitable gifts included on your firm’s tax filings? Many firms demonstrate their corporate social responsibility by setting aside a percent of their profits to give to nonprofit customers. Read on to learn more this tactic.

How Does This Tactic Work?

If you enjoy a profitable year, you donate some of your profit to your nonprofit customers. A national office technology firm, for example, gives one-third of its profits.
  • Give-back donating offers low-risk giving: you donate if you profit.
  • Nonprofits receive cash. Cash endears you to them. Corporate support allows nonprofits to compete better when seeking grants.
  • Your gifts trigger recognition packages that enhance your brand.
  • You establish a quid pro quo relationship, not a partnership. You lose breakthrough wins.
  • You risk planting unrealistic expectations. Your customer anticipates $5,000; you planned on $500. An insurance executive complains, “Nonprofits think we’re made of money.”
  • From some, the transaction holds a whiff of bribery.
 Avoid the Bite
  • Discover how the nonprofit will leverage your gifts. Together look for opportunities with greater wins.
  • Be upfront about the average donation size. It’s never about how much you give; it’s about what you accomplish.
  • To meet new partners and markets, include other nonprofits besides your customers.

Business Philanthropy Tactics

This article is the third in a series about different business philanthropy tactics. Click here to read about contests and discounts. To assess your business philanthropy, take Karen’s Bottom Line Philanthropic Assessment.

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