Does charity support affect customers?

You now may have a general idea of the charity you wish to support, but you are curious if this will actually affect your customers. Take a look around you at any store and I bet you can get the answer to this question.

Currently Target is promoting their charitable donations heavily in advertisements. This is used to distinguish themselves from Wal-Mart and show that they are a friendly part of the community.

Kroger has sales on certain items that offer a percentage donation to the National Breast Cancer Association. This is also advertised in commercials and large signs when you walk into the store.

So why is it that these companies are heavily promoting these charities? These charities tend to be very important to community and pull on the heart strings of their customers. What may not be a necessity may be purchased because of the charity association that is made with it. This also shows good will towards the community in a way that is different then just cheaper prices.

What this comes down to is attracting attention to your product. When there is so much competition in each department it is important to get your name out there and distiguished from others. For more information on how to attract customers go to EHow.

Are there any tax benefits?

Although donating to a charity should not be based around what you get out of it, it doesn't hurt to get an incentive either. So what kind of tax breaks can you get?

The New York times wrote an article discussing the support that is building for the government offering incentives to hire workers that have been laid off, which can be found HERE.

So that's great.. but it hasn't passed yet. Well there are currently other programs that the IRS offered this year if you hired an unemployed veteran or a "disconnected youth". Each of these groups had restrictions but employers must request a certification from their particular state workforce agency, such as ODJFS, called Form 8850. These are used in order to introduce youth that may not be doing well in school with a trade that they may enjoy and work towards or helping a veteran obtain a job that they may have had training with. In order to qualify for this credit you must meet the restrictions of the employee and have them begin to work anytime between 2009 and 2010.

That is great if you want to hire somebody, but for right now you just need yourself. So what options do you have? Well if you are donating to a 501(c)(3) organization that means that the gifts made are fully tax-deductible to the amount allowed by law, although you must keep a record of donation, some organizations such as churches do not require a 501(c)(3) in order to have the tax exempt status. The form 1040, Schedule A can be used to itemize your donations.

The amount you donate and your adjusted gross income determine how much you of a donation you can put on your itemized form. Many people do not reach this limit, but generally a person cannot donate more than half of their adjusted gross income. It is also possible to donate property, but anything over $250.00 has special requirements attached.

The most important thing to do is consult your tax professional and be sure to check if your charitable organization has a 501(c)(3) designation so you can get the most bang for your buck. This will allow you to feel good about what you are doing and help yourself in the process!

How to avoid a scam

So the next question on everyone's mind is how do I know my money is actually going towards the cause? This is an important question because you don't want to donate to a charity and then be disheartened when you find out that your money basically goes to administrative fees.

If your charity is local, then you are able to see the difference your donation has made. As a donor you are able to request that your money go to a specific item or request proof that the donation was used properly. It is a good idea to check with the Better Business Bureau to see if there are any complaints registered against this charity. In order to check to see if the charity is registered with the state, check the National Association of State Charity Officials.

If you are not donating to a local charity it is best to make sure that the charity is not completely new. Many fake charities spring up overnight in connection with current disasters and events around the world. These events are able to convince people to donate to their cause based on sypathy. A legitimate charity will supply you with the name, address, phone number and proof that your contribution is tax deductible.

Do not fall prey to high pressure charities that offer to send a courier to pick up your donation or request that you make a payment over the phone. If you feel that you are being pressured it is best to stop and do more research. Your money will be of use at any time, and you should not rush into donating without proper research. If you feel as though something is off, check the spelling of the charity you are donating to. Some false charities use names similar to that of large charities in order to scam your money. You can also call the actual charity to see if they are sending out requests in order to see if the request you received is legitimate.

Now that you think you have a legitimate charity, you want to know how much of your actual donation will go to the cause. There are many sites out there that will show you the percentage of the donation going towards the cause. A few of these sites are Charity Navigator or Charity Choices. These sites will give you an accurate representation of what your money is used for, along with consumer reviews.

Local, National or International Donation?

So you now have a good idea of what you want to support. Now, at what level do you want to support this charity? Should you support local charities, national or international? The answer to this may be determined based off the type of business you own.

If you are a sole proprietorship or partnership the best decision would be something that hits close to home. Sole proprietors and partnerships are very involved in their work and have little funds or time for anything other than the business. A charity that would work well would have to be something that was very important to the owners. The owners would be able to either volunteer their time or funds to the cause of their choice. A good example would be domestic violence; the owner would be able to donate time at the community shelter or even hire an employee that is looking to get back on their feet. This would allow the owners to feel good about the work they were doing while helping the community. A charity that is near your own experiences will allow you to be pleased with your experience and more involved.

A small business depends on the community surrounding. As a small business it is important to remind the community that you are there not just for yourself, but also for them. When getting involved in a charity it may be difficult to explain to your clients that you are supporting a school across the globe instead of your local high school football team. For these reasons it may be best to support your local community which could be beneficial to both the business and the community. Besides supporting local sporting events, the business may also sponsor a scholarship for a student that plans on going into the area of business in which you work. This will remind the community that the business supports its local patrons in more ways than just its services.

A larger business, such as a national corporation, should approach charities differently. A well known national charity will be able give the corporation valuable publicity in exchange for donating to their cause. A corporation can also use the charity to draw in customers that may want to donate to their particular cause. An example would be P&G having a promotion in which if a customer buys a 10 items that are specified and P&G would donate a percentage to a charity such as National Breast Cancer Foundation. Currently P&G is running a promotion for which every "pink" coupon they will donate two cents to the National Breast Cancer Foundation. A customer that believes that this cause is important enough may buy a product that they would not normally buy.

There are many worthy charities and it may be very difficult to choose the charity that is best for you and your company. Managing your donation dollars properly can allow your company to boost employee morale and bring name recognition to your product all while supporting a good cause.