Non Profit Research Paper

Why should companies participate in corporate giving? There are quite a few benefits in the relationship between corporation and non-profit. The first reason is the most apparent; non-profits survive off donations to help people who are in need. There is also the tax benefit, donating to non-profits allows for tax deductions. Finally, there is the psychological aspect of donating to non-profits. Businesses have certain mission statements, non-profits tend to have a main cause to support.

The relationship between businesses and non-profits is a two-way street; each party involved benefits. The obvious benefactor is the non-profit. As the corporation gives to the non-profit, the non-profit can aid more people and reach a broader audience. In

2016, “$390 billion was given to charitable causes” and “Corporate giving in 2016 increased to $18.55 billion – a 3.5% increase from 2015” (Non-Profit Source). From these statistics, we can see a decent amount of the total money donated in the United States comes from corporations. In addition, according to these statistics the amount of money coming from corporations is on the rise.

Giving to charities is also reflective of the stock market. In addition, it is included in the nation’s Gross Domestic Product. In the past charitable giving has risen “one-third as fast as the stock market” as well as counting for “2.1% of Gross Domestic Product in 2016” (Non-Profit Source). These statistics once again show the amount of money donated to non-profits. Charitable giving is important to our nation as a whole; it helps those in need and our

environment. We need to support those businesses who can, or more importantly, want to donate to those non-profits.

Luckily, in our country, the Internal Revenue Service, or the IRS has codes that give tax deductions. According to Topic Number 506 of the IRS tax topics in order for a donation to be tax deductible it must be to a “qualified organization” (Internal Revenue Service). A qualified organization can be many things, for example, a church, synagogues, mosques, nonprofit hospitals, “Boy Scouts of America, Girl Scouts of America, museums, the American Red Cross, United Way”, and so many other organizations (IRS). This essay is focusing on the nonprofits such as nonprofit hospitals, nonprofit charitable organizations, and other organizations dedicated to helping people in America. Businesses who give to these certain organizations will not only be helping people but also be receiving tax donations.

The benefit of tax cuts, however, does not help the nonprofits. They are already exempt from tax payments. Unless they are purchasing things, then they would need to pay the sales tax. Therefore, the idea of tax cuts is only beneficial to the corporations involved in the exchange. However, the benefits of donating to charities is not purely economic.

Companies have started to notice that corporate giving is highly beneficial to them and the environment around them. Many for-profit organizations are deciding to put corporate giving into their business plans. This is not only because giving to charities helps their tax payment, but also because it looks good. In the present, marketing is one of the most important aspects of their existence, and “philanthropy is getting integrated into the strategy of all departments throughout the entire company”, according to Margaret Coady, director of the Committee Encouraging Corporate Philanthropy (Coady). If a company does not have a good marketing strategy, they

will not be as appealing to the world around them. Charitable giving is not only economically beneficial, but also socially beneficial.

One of the biggest ways we can see the effect that charitable giving has on corporations is through the use of the Internet and Social Media. In an article written by Joshua Kucera, he highlights the idea that “more and more, companies are trying to use philanthropy to build their businesses” (Kucera). How and why are they doing this? They are feeding on the idea of “corporate social responsibility”, or “thinking of philanthropy and business as not two separate things but things that are mutually reinforcing” (Kucera). Corporations often put deals or incentives online for their patrons to see. These philanthropic calls to action not only help the charities but also help the company’s image to the world. For example, during President Obama’s first few days in office Starbucks had a challenge for their patrons. Their challenge was for all of their customers, to put it a total of 1 million hours of volunteer time during President Obama’s first days in office. They offered a free cup of coffee to anyone who did at least five hours of service work.

Non-profits and businesses are not only good partners for a short-term benefit but also a long-term benefit. Companies are choosing to include philanthropic work as part of their business plan; one example is Nestlé. Nestlé chooses to work with the farmers that they work with; the company helps the farmers reduce their water use, boost productivity and create better products. Nestlé’s leaders recognized that in order for “[their] business to be successful in the long run, it must consider the needs of two primary stakeholders…the people in the countries

where we operate and [their] shareholders” (Kucera). Nestlé even decided to change their articles of association; articles of association are “a contract between the members (stockholders, subscribers) and the organization and among the members themselves”, it is like a The Constitution of a company (“Articles of Association”). Nestlé decided to change their articles to include the idea that they need to be aware of staying around for the long term and being sustainable. Companies like these are what help the non-profit sector the most.

Another example of a business collaborating with a non-profit is Staples and DonorsChoose.org. DonorsChoose is a website that is full of project requests, for the past five years, Staples, as a corporation, goes through, finds projects relating to public schools, and chooses one million dollars’ worth of projects annually to fund. According to their corporate website in 2016, Staples “gave more than $11 million to non-profit organizations around the world” (Staples, Inc.). Staples mainly tries to help organizations that focus on education and job skills. For the past three years, Staples, has worked with “Do Something, a New York nonprofit group that seeks to boost youth involvement in social causes, on a campaign to encourage donations of school supplies for needy children” (Barton and Preston). Do Something receives a grant of $150,000 and has its own line of school supplies that are sold in Staples stores; Do Something receives a portion of the sales of those products. Staples also had a campaign in 2017 called Staples for Students; their paired up with Lady Gaga and donated one million dollars to the Born This Way Foundation. Staples as a business is smart, they not only

donate to a charity in line with their business foundations but they join with a celebrity’s charitable foundation.

For businesses, associating themselves with a celebrity’s foundation is a smart business venture.

Why? Well, it gives them more coverage and expands their audience. People pay attention to celebrities, especially in today’s digital era. Social Media is huge, as stated before, and people get, not only most of their news, but ideas, from what they perceive on their Social Media feeds. Facebook, Instagram, Twitter and Snapchat ads are some of the most effective sources of relaying ideas. Trending is a word we hear all the time, but who knew that one day Non-Profits would be “trendy”, for this we can look back to the summer of 2014 and the ALS Ice Bucket Challenge. The ALS Ice Bucket Challenge was to promote and prompt people to donate to the Amyotrophic Lateral Sclerosis Association. In an article written by Anne C. Partika, she describes the ALS Ice Bucket Challenge as “prosocial behavior”, which is defined as “behavior that is benefit other people”, it is “intentional and voluntary positive action” (Partika). This challenge, more specifically, this viral sensation caught the eye of many celebrities who decided to make their own video of them having freezing water dumped on their head. People saw that it was “cool” to make this challenge and donate so they did it. The ALS Association raised one hundred million dollars in that one summer. This is an example of how peer pressure can lead to good

things.

Businesses often feel that they can, and should pair up with charities; in fact, many companies have started putting corporate giving in their business plan. Businesses often feel a

sense of duty and according to Kathey Barney, President and CEO of Generations Bank, “[they] have a responsibility to the community from which [they] call their customer base” (FiveCoat-Campbell and Katz). In times of crisis, especially, corporate giving rates go up. People in America tend to rise up when they know people need help. Cynthis Allen, director of the American Red Cross Wyandotte County Chapter in Kansas says, “She appreciates the donations made at times of crisis, but she wishes that all donors would realize the importance of donating during lulls in large disasters” (FiveCoat-Campbell and Katz). Individuals are able to donate gifts and money to non-profits but it is often difficult for a non-profit to survive off small donations every now and then. They rely on the partnerships the build with corporations.

What is a reason businesses should not donate to non-profits? There are so many benefits to it. Businesses can benefit so much from creating partnerships with Non-Profits. The benefits are not only economic but also social. It is helpful, from a marketing standpoint, to have a good image. In addition, if there is no one to sell to, you cannot have a business. You have to think about sustainability as a corporate executive. The idea of corporate giving has changed; charities will always need money and tangible good as donations. In addition, many other non-profit organizations exist who need people and their time to help. Corporations not only need to give money, but time as well.