5 things to consider when your company donates to charity

The trend towards greater corporate purpose shows no signs of abating. Awareness of climate change, growing ESG requirements and generational changes mean this is set to continue. The growing number of B Corporations is an indicator of this trend, with the number more than doubling over the last 3 years from 3,735 in 2020 to nearly 8,000 at the end of 2023.

Charitable partnerships and donations are an important part of this for any business. Donations can help kickstart your sustainable business strategy, boost employee morale, and enhance brand trust.

Donating in a strategic and consistent way brings multiple benefits, but it can feel daunting if this is a new venture for you. In the absence of an ESG lead in the business, it can be difficult to assign a specific job title to lead a charitable donation strategy. In this instance, it is even more essential that the approach is consultative and robust, taking into consideration not just the intended charitable impact but also employee wellbeing, due diligence and tax efficiencies.

These five questions will help to shape a strategy as you embark on corporate donating.

1. What are your drivers for donating?

The why behind your giving should shape any donation strategy. Besides creating tangible societal change, is it to improve your reputation and build customer loyalty? Is it to boost the mental health and wellbeing of your staff? Is it to attract a younger, purpose-driven workforce?

Perhaps it is to boost productivity—one study revealed that social incentives and charitable donations on an employee’s behalf led to a 13% rise in worker productivity.

If the donation is to boost employer trust, a match funding scheme might be more effective.  Match-funding has proven to be a successful and popular way of incentivising greater giving and boosting employee engagement.

2. What do your employees care about?

Successful company giving programmes consider employees' interests and passions, and prioritise the causes that deliver real impact while keeping teams motivated. Taking employee interests and existing causes which matter to them helps ensure engagement.

Your colleagues’ personalities can inform the causes you want to give to. You could use staff polls or surveys to scope out some initial topics and ideas for charitable giving or volunteering opportunities. It’s worth considering the size of your team as well when making suggestions, for example team volunteering days may not be feasible for all firms.

If you feel unable to square the circle, there are options for flexible giving. You could do a ‘community chest’ where the company gives a monthly donation, but each employee gets to choose which charity each month. One of the benefits of using a platform such as Global Giving is that it's a one-stop giving platform that offers a range of causes in one platform, meaning employees can give flexibly according to their own values.

3. Have you considered vetting and due diligence?

Just like choosing a supplier or beginning a business partnership, prudent companies vet non-profit organisations before making grants. It is sensible to protect your investment by carrying out due diligence, so that you know your donation is going to a legitimate source. This can be especially pertinent if you want to give internationally, or to smaller charities that aren’t well-known.

At GlobalGiving UK, we work with organisations across 175+ countries, all of which go through rigorous due diligence checks, to ensure they are performing charitable work in a transparent and accountable manner, and that they meet local requirements for registration with their local government. This makes the process of giving simple and easy for companies, and offers peace of mind.

4. How will you ensure you select a closely-aligned charitable partner?

A charity partner that aligns with your company's values and priorities can create a powerful, authentic collaboration. For example, if inclusion is central to your culture, giving to a disability rights organisation can showcase your commitment. Or if environmental sustainability is a core value, joining forces with a conservation cause could make a real difference.

Research potential charitable organisations to find ones that genuinely match your own corporate social responsibility goals and perhaps your company’s chosen UN Sustainable Development Goals. A partnership rooted in shared purpose allows both parties to amplify their messaging and make an even greater impact together.

5. What are the tax implications of your donation?

There may be tax repercussions depending on the size of the donation you want to make. HMRC is an incredibly valuable resource, or you may want to consult with finance experts who specialise on philanthropic or corporate giving.

Corporate charitable giving can be an incredibly powerful way for companies to create societal change while also benefiting business. However, it pays to be strategic when deciding how to donate as an organisation by considering your drivers, due diligence and tax implications.

By thoroughly thinking through these elements, companies can ensure their corporate philanthropy makes the biggest difference possible—to guarantee positive impact as well as for business and ESG strategies.