Corporate charity donations are a great way for a business to build a strong foundation of corporate social responsibility, leaving a lasting and positive impact while contributing to a worthy cause.
Today, we’re delving deeper into the world of corporate charity donations. Whether you’re a small start-up or a large corporation, understanding the value of charitable giving can unlock a world of opportunities, both for those in need and for the success and reputation of your own business. Keep reading to learn more about the benefits and find out the answers to some commonly asked questions.
Why is it good for businesses to donate to charity?
Corporate charity donations offer a myriad of fantastic benefits for businesses. Embracing a sense of social responsibility not only means businesses become a catalyst for positive change but can also work wonders for corporate identity. Here are just some of the many benefits:
- Enhanced Corporate Social Responsibility (CSR)
Corporate giving showcases a business’s genuine commitment to making a positive impact on society, fostering a positive brand image.
- Strengthened employee engagement
Staff take a lot of pride in working for a company that does the right thing, so corporate charity donations are a great way to boost employee morale and job satisfaction.
- Community impact
Helping local charities with a corporate charity donation means businesses can directly contribute to the betterment of the local community, often addressing pressing issues like healthcare, poverty and environmental sustainability.
- Attracting new employees
Strong CSR initiatives like corporate charity donations make a business more appealing to potential employees, helping to attract top talent.
- Improved PR
Engaging in philanthropic activities often helps businesses gain favourable news and social media coverage, making it great for a business’s public image.
- Tax benefits
In the UK, there are tax benefits for businesses that donate to registered charities, including Gift Aid and Corporation Tax Relief.
- Enhanced business relationships
Charitable giving often helps build and improve positive relationships with other businesses and non-profits, leading to great networking opportunities and potential collaborations.
Can I donate to charity from my business?
As a UK business, whether you’re a limited company or sole trader, you absolutely have the option to make corporate charity donations. Contributing to a cause you’re passionate about is a great way to improve your CSR while positively impacting the local community.
Here are the steps involved if you want to donate to charity from your business.
- Choose a cause! The first step is to find a charitable cause or organisation that aligns with your business’s values. Many businesses choose to support local charities where the impact will be most visible. Decide if it’s important to you to support a registered charity – you can check online to see if your chosen organisation is registered. While there are benefits to supporting registered charities, many organisations which are not registered still deliver good work.
- Decide on your donation type. Most businesses choose to donate direct financial contributions, but your donation may also take the form of goods or services, or even organising fundraising events. If you opt for a financial donation, establish a clear budget, keeping in mind your business’s financials and the desired impact. We’d always recommend establishing a dialogue with your chosen charity first and asking what kind of support will help them most.
- Engage employees. Involve your employees in the decision-making process throughout and ensure they’re engaged with any fundraising efforts. Seek their input on charities – there may be a strong personal connection to a charity within your team.
- Partner with charities. You could consider establishing a long-term partnership with a specific charity to create a more significant impact. Many businesses choose to have a ‘charity of the year’ and focus on one local cause for an entire year.
- Track and report your impact. Make sure you keep records of all the charitable donations made by your business. This not only helps with any tax benefits but also gives you a simple way to measure your contributions over time and the potential impact of them.
“Supporting Leeds Children’s Charity enabled us to improve our own business reputation, develop our staff and create a more satisfied and happier workplace, whilst making a massive difference to a local worthy cause.”
Diane Chapman, Compliance Manager, Aviva
How much can a limited company donate to charity?
For a limited company, a charity donation means you can give to a worthy cause and reduce your corporate tax bill. There are no laws regarding how much a limited company can donate to charity, but there are some general considerations you should keep in mind. Profitability, shareholder approval and tax implications should always be considered.
Do companies pay tax on charity donations? Are donations subject to corporation tax?
While the main motivation for corporate charity donations should always be driven by a desire to make a difference, it’s also important for businesses to consider the potential tax implications.
The good news is that in most cases, companies do not pay tax on charitable donations to registered charities. As corporate charitable donations are often tax-deductible, businesses can support a worthy cause and also benefit from some tax advantages.
In the UK, donations made to charity by limited companies are generally eligible for tax relief. This means that the amount donated is deducted from the company’s total profits before calculating corporation tax. This reduces the company’s tax liability and provides an additional financial incentive for a business to support charitable causes.
How businesses can help Leeds Children’s Charity at Lineham Farm
If you’re a local business and you’re interested in supporting the work of Leeds Children’s Charity at Lineham Farm, we would love to hear from you. The work we do at Lineham Farm directly helps the children of Leeds. We offer unforgettable breaks and valuable learning experiences to some of the most disadvantaged children in the area, giving them some much-needed moments of respite from often difficult home lives.
For businesses committed to making an ongoing change, our Business Support Packages make it straightforward for your business to get involved in our charity, with full support along the way. But there are a host of other ways your business can help, too, from one-off donations to events and CSR days.
Find out more: ‘How businesses can help’.
Our business supporters help keep Lineham Farm a special place for the children of Leeds. Your donations pay for children to spend time in a safe and happy environment, doing activities like riding bikes, climbing, learning about nature, and simply having fun.
Join a like-minded club of individuals and businesses who share your passion for driving change and improving the futures of the children of Leeds.