Daniel Yomtobian Explains Why Philanthropy Can Give Your Business a Competitive Advantage
It has long been known that companies that give back to the community are more successful than those who keep their profits for themselves. Many factors go into fostering the financial growth of your company, and a robust and generous philanthropy program is only one of them.
Daniel Yomtobian, an entrepreneur from Los Angeles, California, explains why corporate philanthropy is a good idea for businesses of all sizes, naming its advantages and offering ways that companies can begin giving back to the community.
The Advantages of Corporate Philanthropy
Following are the top advantages of corporate philanthropy, emphasizing how corporate and social responsibility can help your company solidify its position in the market and the community.
Enhancing Branding
Simply put, attaching your company’s name to a charitable endeavor gives your company a better public reputation. Associating your brand with giving back to the community will strengthen the brand and drive more business.
When people draw connections between your company and the charitable organizations you support, they will think more highly of your company and be willing to spend more money on your products and services.
Improving Employee Morale
Giving back to the community is an excellent way to improve employee morale. One easy way to drive employee engagement is to provide matching donations to an employee’s favorite nonprofit. This program is simple to run, and it provides employees with a good feeling that they are helping an organization with a critical mission.
Companies that offer their employees paid time to help with charitable organizations can also boost morale. For example, some tech companies have entered partnerships with public schools, providing tech support, instruction, and new equipment for schools in need.
Encouraging Customer Loyalty
When customers know that your company is involved in philanthropy, they will be more loyal to you. They will choose your company consistently over your competitors because they will feel that they are doing good for the community by supporting your business. For example, local restaurants that gave away free food during the worst months of the COVID-19 pandemic engaged their customers and caused them to become loyal fans of the businesses.
Better Relations with Government
Charity can make a company’s relationships with state and local governments easier. If your company is viewed as a positive contributor to the community as a whole, you will likely receive some form of preferential treatment from the local government. This is especially true if your company sponsors local events and organizations like children’s sports teams. Donating money to parks and recreational areas is another good way to make your image more positive in the local governments’ eyes.
Social Responsibility
Many companies are becoming more socially responsible. Companies’ mission statements and charters are now including provisions for social responsibility. One of the best ways to build social responsibility is to give back to the community in monetary form. Supporting projects in developing countries and underserved areas of the United States is something that even a small company can manage. Large companies have proven that giving to organizations that provide food, clean water, and medical care to people in disadvantaged areas can increase their social responsibility.
Driving Profits
Taken together, all of these advantages can help a company drive higher profits. Companies that engage in philanthropy tend to do better than those who keep all of their money for themselves. Fortunately, it is possible to get many of these benefits without spending a great deal of cash. Companies that are active in their communities can often give small but frequent donations to their favorite organizations as a way to keep their names in the conversation.
Be Cautious About the Organizations You Support
When choosing an organization to support, it pays to do your research. Not every charity is doing the right thing by helping people in the community. Some charities are in business simply to take money from well-meaning donors and spend it unscrupulously.
It is a good idea to use the website Charity Navigator and determine whether your chosen nonprofit organization is above board. The website also details how the organization spends its money, especially on CEO and executive costs, versus its benefit programs’ actual cost.
Gaining a Competitive Advantage
Through these tactics, a company that wants to increase its philanthropy can find itself making better profits and increasing its ability to compete with other companies in the area. Philanthropy is, in most cases, free of any downside. One of the few potential problems that could arise is discovering that your company has been giving to a charity that is not above-board with how it handles its monetary donations.
Daniel Yomtobian wants all business owners, regardless of their companies’ size, to engage in corporate philanthropy. His company is one of the many that have shown growth and success due to its support of social causes.
