Selecting a "Charity of Choice"

How should your business select a charity of choice?

Today more than ever, corporations want to get involved in their communities. And doing so isn’t as optional as it used to be—the public expects businesses to give back to the world, not just to profit from it.

In fact, the expectation for corporations to do good means that corporate social responsibility (CSR) has become critical for positive public perception, branding, employee retention and recruitment, business development, and reputation management. (For more on CSR trends and why they matter to your corporation, read our article on the topic.)

Corporate social responsibility goes far beyond donating to charities and volunteering staff time—although nonprofit involvement is a true CSR cornerstone. Starting there, let’s assess how a business can choose a charity of choice for its CSR efforts:

What are your core business values?

Nonprofit involvement should be a fulfilling way to further the mission of your organization while helping the community in which you live and work.

Who do your stakeholders support?

What matters to your employees? Do your customers, prospects, or investors have causes close to their hearts? Choosing a cause that resonates with your stakeholders shows you are in tune with the matters that are important to them.

How involved do you want to be?

Do you plan to donate to the organization only? Would you like volunteer opportunities for staff? Do you expect a board seat for an executive to ensure the company has oversight into the organization and its direction? Different nonprofit organizations offer different types of possibilities; you want to find one that offers elements you need to achieve your CSR goals.

What scale—local, global, or both—matters most?

Is your business local? National? Global? If local, you may want to consider keeping your efforts to your community. Yet if your organization serves the nation or the globe, you may want to research nonprofits that have a broader impact—or that have active efforts in the areas in which your company is most involved.

What values should the nonprofit have?

Choose a charitable organization that has a mission statement and a method of operations—a way in which it does business—that resembles or complements your company’s values. Organizations that share the same ideals will work more amicably toward a common goal.

How legitimate are your options?

Make sure organizations are registered with the IRS and meet criteria for tax-exempt organizations. If the charity of your choice doesn’t meet these specifications, your company’s contribution may not be tax deductible. The Better Business Bureau and the Charity Review Council are great resources for helping you determine legitimacy. If the organization does not show up in either system, ask to see its letter of determination. And the site CharityWatch.org provides extensive information about thousands of American charities.

Also, ensure that the organizations you consider truly do the good they promise. The American Institute of Philanthropy, a charity watchdog, recommends supporting a charity in which at least 60 percent of your donation goes to the charitable endeavor. A reputable charity will report its achievements using concrete criteria.

Need help thinking through a corporate social responsibility plan that meets your business’s objectives and values? FrogDog can help.