If you’ve attended a charity event or donated to a cause you care about, you know that giving back is a reward in itself. But do you know that it can also be beneficial for your financial advisory business?
At Commonwealth, our non-profit organization, Commonwealth Cares, grew out of a long history of giving back. While the main goal is to help others and it has made a huge impact, it has also benefited the company, our employees and the consultants we work with in myriad ways.
So how can you harness these powers in your practice and in your community? In honor of Giving Tuesday, we’re sharing five benefits of developing a give-back strategy and how to put a plan into action.
5 reasons for a giving back strategy
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It helps maintain customer relationships. Instead of hosting a customer dinner, wine tasting, or movie night, why not bring your customers together to give back? By inviting them to volunteer for a good cause, you show them that you care about more than just business. It can also help deepen relationships and may even lead to new referrals.
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It encourages employee engagement. When employees are allowed to socialize and bond, a great workplace culture is created. By organizing a team to attend an event or fundraiser, you bring people together, raise awareness, and make your employees feel good about making a difference in the community.
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It’s an investment in the community. Donating locally means supporting your community or hometown. And when you support your community, they will want to support your business too. Whatever the reason, everyone benefits.
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You can market your efforts. There’s nothing wrong with emphasizing your efforts on social media and your website – it’s a great way to show clients and prospects the causes you care about. And depending on your commitment or the size of your donation, you may receive a notice on an organization’s website or in an event program book.
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There are potential tax savings. The contributions you make should be tax deductible. However, remember to consult your tax advisor beforehand, as the structure of the donation and the recipients of your donation will determine what you can deduct.
Create your own giving back strategy
When you’re ready to implement a formal return strategy in your organization, it’s wise to start small. This way you can ensure a consistent, repeatable process and build your efforts over time.
Next, you want to create a mission statement. This helps you focus your efforts on the causes you care about most and prevents you from writing a check every time someone asks for a donation. Your mission statement should answer questions like:
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What motivates you to give something back?
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What charitable impact do you want to achieve?
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What is your geographic scope?
Once you’ve answered these questions, you can narrow down the organizations you want to get involved with and decide how you want to make a difference. There are several ways to do this:
- Type sustained over time. Instead of a one-time donation, this is a great way to help an organization long-term. You can donate monthly to a specific cause or distribute the donations to different organizations that serve your mission. You can even combine this promotion with special occasions: instead of giving gifts to customers or employees, consider making a donation on their behalf.
- Host an event or get involved with a good cause. There are many ways your efforts can go beyond monetary donations. For example, if an organization you admire is hosting a charity march, team up with employees and encourage customers to participate. Or offer your employees a Volunteer Day Off (VTO) so they can all roll up their sleeves and volunteer for a good cause.
- Work on a charity board. There’s no better way to support a cause you believe in than to become an integral part of the organization. Serving on the board allows you to bring the skills, experience or expertise that the organization desperately needs. Donating time or money to a good cause over an extended period of time can lead to a board position. You can also stop by BoardStrong.org and look for open positions on the boards of organizations that appeal to you.
- Create your own means of giving back. If you want more control over how your contributions are used, consider starting your own fund or organization. There are two ways to do this:
- Create a Donor Recommended Fund (DAF). This option is a relatively easy, flexible, and tax-efficient way to support your favorite charity. You deposit cash, stocks, or other assets into an account, invest the funds for tax-free growth, and donate directly to the charity of your choice. Note that you may not solicit customer donations to a DAF.
- Set up a 501(c)(3) organization. Charitable foundations and private foundations are two tax-exempt organizations established for charitable purposes. While these options offer a broader range of donation opportunities, they are much more complex. First of all, they are legal entities, so there is a lot of paperwork and costs involved in establishing and maintaining them. In addition, public charities require that one-third of the funding comes from public donations. But with the right amount of time and effort, these options could help meet sizeable fundraising goals for building projects or funding research.
Help others and help yourself
Giving Tuesday was created to encourage people to do good. And while your primary reason for developing a return strategy should be to help those in need, your practice can also benefit from your generosity. It can improve your brand image, engage customers and employees, and show potential customers that you care about more than just your company. If you’re ready to give something back, there’s no better time to do it than now.
Commonwealth Financial Network® does not provide legal or tax advice. You should consult a legal or tax advisor regarding your individual situation.
Please consult your member company’s policies and obtain prior approval for any marketing ideas or other strategies discussed in this post.
