The importance of seeking a charitable balance

Editor’s note: Michelle Stockman is an independent consultant with her company, Fort Smith-based Msaada Group. Stockman earned a bachelor’s degree from Loyola University-Chicago in communications and fine arts, and earned a master’s in entrepreneurship from Western Carolina University. Her thoughts on business success appear each week on The City Wire.

As this calendar New Year has begun, most businesses also begin their fiscal year. This typically represents new budgets to play with and new opportunities to seize. Likewise, this is also brings in a new year for non-profits to start fundraising and knocking on the door to your new business.

The profit and non-profit worlds are co-dependent on each other and offer many benefits to one another. To the charity, fundraising means gathering the necessary revenues to support the operations and staff of the organization for the year. Like making sales for a profitable business, fundraising allows the nonprofit to maintain the social and civic services the organization provides. While grants and special events are good fundraising tools, most nonprofits rely on the generosity of business and individual donors.

Likewise, profitable businesses utilize non-profits to donate some of the profits for tax relief. They also donate or sponsor a non-profit event for an opportunity to market and advertise to that non-profit’s target market. Non-profits offer entrepreneurs the opportunity to give back, as entrepreneurs are often the largest donors within the community.

Both organizations need to balance their reliance on each other. Nonprofits need to seek a balanced fundraising plan each year that includes a mix of funding sources. This funding mix makes the nonprofit stronger, especially in hard economic times as one funding source may get weak while another picks up the shortfall. Likewise, businesses need to balance the amount of funds they provide to local nonprofits. It is very hard to turn a good program away; however many small business owners either give more than they can away or feel a sense of guilt for saying no.

For example, a business owner came to me one year exasperated from the number of nonprofits who were soliciting donations from the business. This entrepreneur cared about each of the nonprofits, but the donations were jeopardizing the very existence of the business. After much coaching and a clear look at the priorities for this business owner, the business owner had to learn to say the word “no.” Also, the business owner evaluated how the nonprofits fit with the mission and market of the business in order to make the relationships with the nonprofits successful for both.

While some businesses or business owners can donate as much as they want, most entrepreneurs and small businesses need to set a limit. In this time of new budgets or budgeting, entrepreneurs may want to consider setting either a dollar limit to their donations to charities or hand pick the charities they want to support for the year. I know it’s hard to say no to the band student or the booster club, but approach your charitable giving with a plan. Choose what charities or fundraising efforts make sense for your interests and what aligns with your business.

For non-profits and businesses, find balance with your goals and with each other. Together, both entity types can create a great healthy and vibrant community. Collaboration is key to surviving this ever evolving world.

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Stockman can be reached at [email protected]