Many companies are interested in giving back to their local community. In addition to the goodwill generated for the firm, corporate giving is responsible for many wonderful charitable programs that are used by many people.
There are various ways that a company can give back to the community. They may do so by donating funds to a local charity, sponsoring an event, or by setting up their own corporate foundation.
A corporate foundation is a charity that is tied to a specific for-profit company. There are several key differences between a corporate charity and a traditional nonprofit corporation. A corporate foundation provides greater flexibility to the persons that may serve on the board of directors. For example, the board of directors may be made up entirely of company employees or may include members of the local community.
In addition, companies are allowed to donate up to 10% of gross sales to their corporate foundation that can be tax deductible for a given fiscal year. You can claim tax deductible donations for up to three years later.
Corporate Foundation Main Advantages
Forming a corporate charity can provide many advantages for for-profit company.
One of the main benefits of corporate foundations is the amazing difference they can make in the community. According to the National Philanthropic Trust, in 2014, foundation giving was approximately $53.7 billion. This made up approximately 15% of all giving. These contributions were used to fund many great causes including education, human services, and health services.
Another one of the key benefits of corporate charities is that they provide much greater control over corporate giving. It provides the opportunity for the company to determine how any donated funds are best allocated. This ensures that the funds are used appropriately and for the purpose that was intended.
Additionally, a company charity can generate powerful word-of-mouth marketing and positive press within the community. It will improve name and brand recognition among potential future customers.
A corporate foundation also provides greater opportunity to document and publicize a company’s charitable efforts. Many customers prefer to purchase products and services from companies that are making a positive difference in the community. Corporate foundations are also a great way to get members of the community involved in charitable projects.
Furthermore, corporate foundations can be a great tool to get employees involved in the community. They can be used to build camaraderie within the company as employees work together on charitable projects. Working on charitable projects is also sure to boost employee morale. This can be a great way to enhance employee satisfaction while making a positive difference in the community.
Corporate Foundation – The Bottom Line
Foundations have two primary benefits. They can improve the local community through charitable programs or corporate giving to nonprofits, and they can also improve the company’s financial results. All companies are interested in increasing profits. Forming a corporate charity can be a great way to improve the bottom line by generating goodwill in the community and benefiting from the positive marketing that can come from it.
Setting up a corporate foundation, however, can be an intimidating process. The process to establishing a corporate foundation can be a lengthy one if you do have experience in it. Even after the corporate foundation has been legally formed, there are many steps that must be taken to ensure the charity has the best opportunity for success. From branding to strategic planning, corporate foundations require a substantial time commitment in order to be successful. Even the largest corporate foundations experience the growing pains of foundations. Let our experienced consultants guide you in forming your corporate foundation. We can make the process easy and simple.