Image by: Images Money
By Michael Sarter
It’s an age old thought that giving to the poor can make you rich. What goes up must come down, right? Well it might surprise you that this theory has data behind it. The balance of giving and receiving might have an obvious pull to the naked eye, but to a savvy businessman, they are both interconnected. The U.S.A. loves charities.
Major companies are beginning to understand the trend. Walmart gave over $340,000,000 in 2011, said Philanthropy.com, and because of this, not only did they gain major tax deductions from the government (in the tens of millions), but they were able to create a better company image. Trust me, giving pays off in more ways than one.
Volunteer Work
It takes nothing to volunteer, literally. Though volunteer work itself is not tax-deductible, you CAN however deduct mileage to and from (usually 14 – 18 cents per mile) the location. There is also a likely chance you may be able to deduct air fare if you and your company choose to volunteer for a valid organization out of state.
A company that volunteers is more likely to be trusted by it’s customers. Here’s a tip: the next time you go on a company volunteer trip, wear company shirts and hand out fliers. If you build a relationship with the organization, they are more likely to recommend your services, plus people love free gifts.
Charitable Donations Are Like A Boomerang
Make sure that the organization you are donating to is a federally approved 501(c)(3), this makes sure that your company will be able to get tax write offs. However most business owners often forget that churches and various other small nonprofits are tax deductible as well, and they aren’t required to register with the IRS.
One might think that the more money you have, the more you’re likely you are to donate, thus greater returns. In the scheme of things, this is true. But research from the Center on Philanthropy shows that every business who gave $100 to charity in 2004 were likely to receive $2 – $5 in returns from tax write offs. This money would have been lost otherwise.
Why throw away money? Here’s a tip: make a separate account and call it your “charity account.” Every December, pick four to five charities that your company will donate to the next year and don’t change your mind. Leave a little extra for emergencies, like natural disaster relief or sponsorship. When tax season arrives, you have a well-accounted record.
Item and Space Donation
If you decide to do a spring cleaning in your office, don’t just throw away your furniture, give it to charity! Office equipment, cooking utensils, clothing, mugs, all of these can be tax deductible! Keep all your receipts for everything you buy and it will all be a write off. If it’s more than $500, you need to file an IRS Form 8283 along with your return.
Office space can be another great opportunity for you to bank in on giving. Depending on which state you live in, nearly 85% of them give charities complete property-tax exemption. If you allow an organization to share office space or let them use one of your properties year round, you can be qualified for this exemption and property tax, as we know, is a major cut during tax season.
Company Image
It always feels good to see your brand on the back of an 8 foot by 8 foot screen at a red carpet event or charity opening. Use this to your advantage, because people do look at these names. Consumers feel good when doing business with a company that gives back. It’s hard to talk bad about someone who is seemingly doing good in the world.
Do some research and try to give to charities that like to throw events and have them put your brand up on display. When they do, not only are guests (mostly rich people at these types of places) going to see them, but also photographers, which will ultimately be shared on social media.