Charitable giving should be embedded into business DNA

Tis the holiday season, where we shift from giving thanks to giving (and receiving).  And in the spirit of the season, the annual charity “Give” campaigns are already sending out emails to line up donors to provide financial support for charitable organizations that fill the gaps between business and government programs within our communities.

I recommend and implement it in my own business designs that every business should adopt a charity.

By adopt a charity, I do not mean that the owner of a small business makes an annual gift to a charity out of whatever cash happens to be available at the end of the year (a rare circumstance, at best).

I mean that the business should set aside a percentage of its profits, better yet a percentage of its revenues, and give this money to one or two charities.  This commitment should be formalized in the organizational documents of the business: its bylaws, operating or partnership agreement so that the gifting is permanent and not discretionary.  I call it “embedding a soul in the DNA of the business”: a genetically magnificent organization or GMO.  I have been told that this term will not catch on.

Some business may protest that they cannot afford such a charitable commitment.  However, they are already shipping 3.5 percent of their revenues to Wall Street to process their credit cards and typically paying a higher amount to the government as sales tax.  Setting aside a percentage of revenue for charities is like a self-imposed tax: Only it feels better.

Unlike the payment of credit-card merchant fees, your gifts should not be hidden.  They should be transparent.  It’s not bragging to tell people that you are making a donation.  You are simply setting a good example. And, building credibility with those who share your values in supporting charitable organizations.

Charities appreciate consistent payments.  My wife is the executive director for a small charity — Wapiyapi, that provides a camp near Estes Park for children in Colorado with cancer (www.wapiyapi.org) — and each year’s planning has to deal with the uncertainty of whether any one donor is going to repeat their charitable contribution.  Your business’ gifting commitment will ease the stress of your selected charity if it does nothing else.

Your charitable support should not be limited to cash gifts.  Your business should embrace, enfold, nurture and support the charity.  You should be present at all of the events of the charity.  You should have a representative on their board.  Your support should be so intensive that people associate the brand of the charity with the brand of your business and vice versa.

Support should not be isolated to the owner or board of the small business, but should be expanded to include all of the employees.  In addition to programs where the business will match contributions of its employees, the business may create “performance bonuses” that recognize achievement of the business, teams and individual workers with additional charitable gifts.  This alignment of business and employee interests will improve team morale.

Since my talents lie in designing capital campaigns, I am currently developing a campaign plan to raise $5,000 for Plant with Purpose (www.plantwithpurpose.org) using charitable crowdfunding.  I intend to reach out to my network and ask each person within my network to reach out to their networks to use the power of the crowd in achieving this fundraising goal. Once the plan is complete, it will be posted for free download from the Colorado Community Capital PBC website (www.coloradocommunitycapital.com).

Adopting a charity is one method for building a crowd — one of the single most important activities of any business.  By supporting the charity, each of its staff, beneficiaries and donors may become aware of your business and think kindly of it the next time that they are shopping or looking for a Main Street investment.

I recognize that the last observation may be challenged by those who believe that charitable donations should come solely from the heart.  I understand.  However, if a business can make larger donations by viewing their support of a charity as part of their marketing budget, then all is well that ends well.

Karl Dakin is president of Dakin Capital Services LLC. He can be reached at kdakin@dakincapital.com.