BBB Business Tip: What to consider before supporting a charity

As a business owner, donating to a charity can be a great way to connect with your customers, take advantage of tax benefits, and give back to the community that supports your business. But before you write a check, donate goods, or volunteer your time, be sure to do your research and look out for questionable appeals. BBB recommends the following tips when giving to a charity through your business. 

Tips for Businesses Donating to a Charity

• Develop a giving plan. Charities often solicit support from small businesses in their community. But just because an organization asks for your donation doesn’t mean it’s the right fit. Take time to identify what type of charities your business wants to support. This is a meaningful way to give back and generate positive public relations for your business. Your company’s giving focus should reflect its size, location, structure, the nature of its business objectives, and the needs of the community.  You may also want to involve employees in the giving decision process.
  
  
• Do research about the charity. Even if a charity’s mission really speaks to you, put in the necessary time and effort to make sure the charity is operating appropriately. Check the charity’s website to read more about their mission, program, and finances. Read the charity’s report on Give.org to see if they meet the 20 BBB Standards for Charity Accountability (i.e. a BBB Accredited Charity.)
  
  
• Verify government registration. About 40 out of 50 U.S. states require charities to register with the state attorney general’s office or the secretary of the state. Make sure a charity is legally registered, where it is a requirement, before you donate. In Canada, check the Canada Revenue Agency. 
  
  
• Watch our for charity look-alikes. While it is not unusual for a charity to identify a disease, problem or issue that it seeks to address as part of its official name, it can be suspicious if the name appears to closely mimic or match that of a long established and recognized charity brand.  So, look at the name of the charity carefully, and visit the charity’s website to avoid being mistaken.
  
  
• Cause-related marketing. Sometimes business have promotions that announce a purchase of their product/service will benefit a specified charity. If your business decides to engage in such activities, please consider the following. Have a written agreement with the charity that give you permission to use their name and identifies the financial arrangements. As called for in BBB Charity Standard 19, make sure the promotion indicates the actual or anticipated amount of the purchase that will benefit the charity, if there is a time period for the campaign, and any maximum or guaranteed minimum contribution amount. (e.g., 5 cents goes to xyz charity for every abc item purchased during the month of November up to a maximum of $2,000.)  In addition, three may be additional state regulatory requirements for the promotion.  Check with the state attorney general’s office.
  
  
• Clothing donation bins. Before giving permission for a charity to place a clothing donation bin in your parking lot, please take the time to check out the charity as described above. Also, don’t assume how the donated clothing is going to be used. Sometimes the donated items are sold in thrift stores or shredded into rag-bond paper. In some instances, the bin may have a charity sounding name but not be connected to charity at all. If you agree to have the bin placed, verify that it is properly identified and marked so that donors will be able to find our more about the charity before they contribute.
  
  
• Think about charitable tax deductions. Keep in mind that not every soliciting organization is tax exempt as a charity. It is okay if you want to support those other groups, but, in general, to claim a charitable tax deduction, the organization should be tax-exempt under section 501 (c)(3) of the Internal Revenue Code. That is the section that defines charities.
  
  
• Appeals by police and firefighter organizations. Nearly every business receives appeals by organizations claiming a connection to police officers and/or firefighters. Don’t assume what the organization does based solely on its name. Local police and firefighters may have no connection to the organization. If the caller implies donations will result in special treatment by the police or firefighters, don’t believe it. Consider reporting such promises to the state’s attorney general office. Also, some police and fire fighter organizations may not be tax exempt as charities, so contributions may not be deductible.
  
  
• Tickets to benefit performances or fundraising dinners. Before buying tickets to a benefit performance, fund raising dinner, or golf outing, check out the organization as suggested above and decide if this is a charity that your business wants to support. Also ask what the charity’s estimated share will be of the amounts raised.  Your business may want to alternatively make a donation to the organization instead of a purchase. 

For more information 

For more information on donating to charities, visit the BBB Wise Giving Alliance’s website at Give.org.