Most businesses today realize that a community benefit program can be a part of its marketing effort to develop community awareness and a means of promoting a sense of common purpose between the business and its employees.  A principal part of any community benefit program is charitable giving.  It can be a large or small program depending on the charitable intent of the principals of the business and the needs for community awareness of the business’ products.

Well organized businesses have policies for their programs.  Section 1721 of the Pennsylvania Business Corporation Law provides that directors of a business corporation in discharging their duties as to what is in the best interests of the corporation may take into consideration the effect of corporate actions upon employees, suppliers, customers and the communities in which offices and other establishments are located.  Having a policy for charitable giving is one of the better examples of such corporate decision making.


First, the policy should be aligned with the purpose of the business.  More specifically, it should be aligned with its ability to reach and hold customers or clients.  This holds true whether charitable giving is in the form of monetary contributions or in corporate members volunteering or acting as directors.  For instance, if the business sells automobiles, its policy should emphasize contributions to charitable institutions which buy cars.  If an accounting firm is interested in representing a business which has a visible charitable interest, consideration should be given to making contributions in time and money to the charitable institution in which the business is interested.

A secondary, but still important, use of charitable giving is to show interest in employees by supporting their community concerns.  Thus, support for employees can be demonstrated by matching employee contributions and allowing time off for service as a director of a charity or for volunteer work.


When coordinating charitable giving with marketing, focus is important.  Therefore, a few larger contributions are more effective than a series of small ones.  If showing an interest in employees’ community concerns is the object, smaller and less focused contributions are possible.

In order to achieve policy objectives, a business should see to it that credit is given for monetary or service charitable contributions, either by the recipient or as a news story or release.

When operating a charitable giving policy in conjunction with a marketing policy, consideration should be given to making the contributions in a sustainable manner over a long term.  On the other hand, sporadic giving of larger amounts will not go without notice by a nonprofit entity in good or bad times.

An outside parameter is the 10% of federally taxable income deduction limitation allowed for corporations by the Internal Revenue Code.  Of course, there is a 5-year carry forward of amounts which qualify for a federal charitable deduction.  Consideration should be given to donating to a reserve, perhaps, donor advised fund at a community foundation, before starting a program of charitable giving so that such a program can proceed in an orderly fashion even when adjusted gross income does not allow orderly funding of the policy.


A business is not a charity.  Therefore, charitable impulses must be kept in check.  When formulating a charitable giving policy, care should be taken that all principals in the business are on board and understand the relationship with marketing policy.   If a principal is opposed to corporate giving, the issue could be a source of major discord leading to dissolution.

In carrying out a charitable giving policy, attention must be paid to the sensibilities of the principal owners of the business and employees.  At a minimum, if there are such sensibilities, there must be some understanding that there will be diversity in implementation, and this must be built in to the policy.  For example, if there are pro-life and pro-choice persons in the business, it should be discussed at the outset that implementation of the charitable giving policy, either in conjunction with the marketing policy or a matching contribution policy, may result in contributions of either time or money to organizations like Planned Parenthood.

A well-thought and carefully executed policy will ensure that an organization’s charitable giving is a win-win for both the beneficiary and the benefactor.