When business owners try to balance up their businesses, they obviously want to put as much of their revenue back into the company to build it up again. However, this can raise a question mark over something like philanthropy, which is neither a business expense nor a revenue stream. How can businesses align this into their accounting in a thoughtful way? Let’s take a closer look.
Q2 2020 hedge fund letters, conferences and more
Establish Philanthropy as Soon as Possible
When trying to make philanthropy a regular part of a business, one of the things not to do is dither over what type of philanthropy is best. Instead, it is better for the director, the management team, or even the staff in smaller companies, to all nominate causes close to their heart. After some discussion, one of these could then be adopted.
There are so many charitable options out there that a company could choose to pursue. Whether they wish to adopt a grand scheme that many others support, a smaller local charity, or even potentially set up a non-profit division of their own company, there is always a way that they can find a cause they care about and quickly devise some sort of support for it.
Rethink Philanthropy
At first, it can be very difficult for business execs to separate their desire to generate profit through the company and the willingness to give some of that profit to charity. By reading resources like Rebuilding You: The Philanthropy Handbook by Tej Kohli for example, or attending a seminar on the subject, they can begin to rewire their ways of thinking.
Everyone who is successful should give something back if they can. Any company can make a real difference, whether they donate something each month or plan big drives in the run-up to a holiday season like Christmas.
Be Consistent
One of the easiest ways to ensure that a company is being suitable philanthropic is for it to maintain its donations regularly, whatever they may be or the destination of those donations. They need to be entered into the accounts as soon as possible to avoid any spending errors. If the donations are to be regular instead of a one-time deal, this then needs to be implemented as soon as possible.
For the business owner struggling to become as altruistic as possible, this is the best course of action to take. Regular donations will help to turn this into a habit, and soon it shall be second nature to the business.
A philanthropic outlook has a host of benefits for a company. Not only can it help to boost their standing in the local community, but it can help them to focus an aspect of their business into something that is wholly positive. It can be incredibly rewarding to help others and occasionally focus on something other than the day-to-day operations of the wider business. All companies should have some sort of philanthropic practice in place, be it in their sector, their local area, or just relating to an issue they care strongly about.
