Businesses often have tangible capital assets such as machinery and real estate. They can also have intangible assets like brand loyalty and goodwill. Both types of assets are important for a business to grow and thrive. A company may have the best equipment in its factory, but one bad PR move can cost them heavily.
Many consumers today want to support brands in sync with their values. In most cases, customers have numerous options allowing them to pick one business over another. If car manufacturer A had a politically incorrect advertising campaign, customers might boycott the business and influence others as well. However, if car manufacturer B promotes a car with lower emissions, it may resonate with those who value an eco-friendly lifestyle. Here are some reasons why investing in community projects can be good for the bottom line.
1. Goodwill in the Community
When businesses allocate resources for their local community, it shows they care. Instead of simply promoting themselves as a local, family-owned, or neighborhood business, they are putting their money where their mouth is. Some businesses choose to sponsor local Little League baseball teams. They often put up framed photos to show patrons how they give back to the community and support the youth.
Businesses can also give back by supporting local parks and recreation spaces in their surrounding neighborhoods. They might sponsor the installation of new outdoor playground equipment for children in the community to enjoy. Many local municipalities would then honor the business by associating their name with the park or displaying a plaque of gratitude. By all considerations, this is a smart PR move and a win for the community and for the business.
2. Financial Benefits
Not only can community projects build goodwill for the business, they also help the bottom line. In most cases, donations to nonprofits qualify as tax deductions, saving businesses a huge chunk come tax time. Many stores ask at checkout if the customer would like to donate a dollar or round up for a local charity. Some businesses match donations made by their employees or customers and donate larger amounts to support good causes.
Businesses often have deeper pockets than individuals, allowing them to take advantage of commercial or industrial pricing. For example, a business donating school supplies can get a better price per unit buying in bulk. This allows them to support their neighborhood school while saving money on the supplies they’re donating.
3. Networking Perks
By getting involved in the local community, businesses will also benefit from networking. They may find great suppliers, employees, or even more customers right in the neighborhood. Such projects can also help open doors to new partnerships and collaborations with local officials. Officials running for local office, such as the Mayor and Trustees, often look to establish relationships with reliable businesses. This can help them complete projects they may have promised their constituents at election time.
In turn, the business benefits by getting contracts to some local projects and adding them to their portfolio. Landscaping a local park is typically a larger scale project than someone’s backyard. These kinds of partnerships lend to the long-term sustainability of the business. Community members won’t consider them a fly-by-night pop-up shop that may be here one day and gone the next. When a business invests in the community, people think of them as a neighbor in it for the long run.
4. Improved Employee Retention
Just like customers who choose to support businesses that give back to the community, many employees feel the same way. They would rather spend their day working for an organization whose vision and mission statement isn’t just about making money. People take pride in working for a business where actions speak louder than words. They may appreciate working among other locals and neighbors, building a sense of camaraderie at the workplace.
Personnel management is not just about hiring the right people, but also retaining the talent. When employees feel their values align with the company they work at, they may stay longer with the firm. This can save money in paying recruitment agencies and onboarding new staff. Companies should take pride in retaining employees for long periods of time. It speaks volumes to their ethics and safe work environment.
5. Contributing Global Citizens
When a business gives back, they are doing their part to make the world a better place. This may sound cliché, but it is not. Whether an organization supports education, health, the environment, or another cause, the benefits extend far and wide. A local business selling meal kits, for instance, cannot end world hunger. However, they can make a difference by providing one meal to a hungry kid locally for every meal kit purchased.
Sharing impact reports on a company website is not simply about philanthropy. It is also smart marketing as customers feel more inclined to buy from a business that is changing lives. There is nothing wrong with helping others and making money at the same time. Businesses don’t have to choose one over the other. Running a business can be about making money to help your own enterprise as well as others around you.
