Do Business And Philanthropy Mix?


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One is all about earning, the other is all about giving. Can the two ever mix successfully?

Yes – but getting the balance isn’t easy. Here are just a few ways that business and philanthropy can make a good pairing, and how they can also work against one another.



Legal parameters

There are laws when it comes to charity and business that need to be abided. Generally, if you’re running a registered charity, you can’t use the profits from this charity for your own personal use. Money must be kept in a charity account and used for charitable purposes. However, you can own a registered business in which some of the profits from here then go into a charity account or directly to a charitable cause. In complicated situations, talking to a member of the charity commission may be worthwhile.




Being too charitable

There have been cases of businesses being too charitable – so much so that their business starts to run on a loss. In some cases, employers have provided so much for their employees that they’ve scared clients away by not coming across as having a stable business acumen. A business after all has to be profitable in order to function and continue. It’s best hiring an accountant or financial advisor to help come up with a viable plan.




Philanthropy and business as two separate things

Many great business owners such as the likes of Moshe Kantor have succeeded in both areas by keeping them separate. Reaching a certain status in the business world may certainly help with giving your charitable cause more recognition and attract donators. Similarly, running a charity may make your business seem more humanitarian and convince clients to buy into your product. However, by not having a flow of finances between the two and making them two separate organisations it can help prevent legal problems and lack of trust from clients.




Philanthropy as a marketing strategy

Philanthropy does look good on a business and can be an effective marketing strategy. Many businesses will donate a small amount of money to charity from each sale and use this as a marketing incentive. For example, a company selling t-shirts might advertise that 10p from each shirt goes to a cancer trust. Micro-loaning services such as Kiva are ideal for doing this. The key is to stick by your word and make sure that this money does go to the charity specified.


Another marketing strategy might be to publicly sponsor a charity event such as a festival or a charity project such as building a well in Africa. This is a way of giving to a cause that also put your company name out there in the media in a good light.


Charity marketing does need to be tactfully done and there are some cases where it may negatively affect your image. You should generally try not to promote your product too hard at a charity event – the focus should be the charity, otherwise you’ll come across shallow and uncaring of the cause at hand. You should also avoid causes that conflict with your business (for example, an airline company would be silly to sponsor an anti-global warming agenda).



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