Smaller businesses with big hearts can practise effective philanthropy.

 

 

 

 

How Australian SMEs can donate effectively post-COVID-19

According to Giving Australia, in good years approximately 70% of Australian businesses with fewer than 200 employees (small to medium-enterprises or SMEs) make charitable contributions. But after a year of wildfires and COVID-19, Australian SMEs considering giving back to charity in 2021 need to know how to achieve maximum impact for their donated dollar.

While eye-popping donations will always steal the media spotlight – think Andrew Forrest’s Minderoo Foundation buying 10 million COVID-19 test kits in April for $160 million, or the Gates Foundation’s $1.6 billion pledge for vaccine development – there are several practical ways in which smaller businesses with big hearts can practise effective philanthropy.

Start with the end in mind

Many SMEs are grappling with reduced cashflow, so a decision to make a charitable contribution must be a purposeful one. What’s your goal in giving away your hard-earned money? Are you giving back to your local community to see a specific outcome – more green space, or reduced homelessness, for example? Or are you looking for something more intangible, such as the goodwill that comes from supporting the favoured charity of your employees or best customer? 

Principles of post-COVID grant-making

Businesses donate dollars, goods and services to the not-for-profit sector. In response to the pandemic’s impact on the sector, Peak body Philanthropy Australia issued a list of key principles for effective donating that apply to all businesses. Here are the most relevant principles for SMEs.

Ask how you can help, rather than wait to be asked

Philanthropy Australia recommends consulting proactively with your prospective beneficiaries. With the pandemic affecting for-profit as well as not-for-profit businesses, CEOs are in a strong position to consult a shortlist of beneficiaries to ask how the pandemic has affected a grantee’s operations, and what they need most? What resources have rapidly changing circumstances revealed the grantee lacks? How can your business help the not-for-profit address immediate needs, deliver services, as well as help the not-for-profit emerge stronger post-COVID-19?

Understand why unrestricted funds are best

Australia’s leading philanthropists recommend removing as many restrictions on grants as possible so that the grantee organisation has flexibility with using the funds. As business owners you understand how changed circumstances have disrupted normal operations. Show empathy to your beneficiary if the organisation has a reputation for being well managed.

Consider other ways to offer support 

SMEs most frequently contribute money to local fundraising events. But not-for-profits also need the skills, expertise and technology of the private sector to help them thrive.

In their inaugural PwC Not-For-Profit CEO Report, for example, PwC found that more than 75% of not-for-profit leaders said improving the digital skills of their employees had become a greater priority because of the pandemic. 

It will come as little surprise that most of those same CEOs said they lacked the resources to provide the necessary training. Helping a charitable organisation to upskill its employees is a great opportunity for companies looking to give back in ways other than making a financial donation.  

If you’re looking to partner with a charitable organization over the medium to long term, we suggest a simple agreement should be in place setting out the responsibilities of each party.

 

Any decision that affects your business has legal implications. Contact us today to help secure your business for whatever tomorrow brings.

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