Corporate-MatchingA significant number of businesses in the US, from large, multi-national corporations to small Mom-and-Pop retailers, have made charitable donations a regular part of doing business.  In fact, many consumers not only expect this in the 21st century, but they specifically look to do business with charitable companies.

Corporate America today supports all kinds of different causes, from medical research to providing clean drinking water for people in developing countries.  Some companies, like Toms, have created their own charities.  The Toms “One for One” campaign provides a pair of shoes for a needy child for every pair of Toms shoes sold in North America; a unique twist on the idea of corporate matching.

A concept in charitable giving that has been gaining rapid favor in the business world in recent years is the idea of corporate matching.  “Corporate matching” is a program whereby companies encourage employees or customers to give to a particular cause by offering to match those donations dollar-for-dollar.

The benefits to such programs are tremendous, not only for the charity that receives the donation, but also for the giver and the company that matches the donation.  Some of those benefits include:

1) Tax credits: Individual tax payers in the US are allowed to deduct a significant portion of charitable donations from their annual income.  This helps to bring down the individual’s income, resulting in lower taxation.

Many individuals plan their annual giving so that they donate enough money to bring their incomes down into a lower tax bracket.  Often they end up making the same net income as they would have in a higher tax bracket.

Corporations are also able to benefit from their charitable donations.  Regulations regarding how financial gifts can be deducted by both corporations and private individuals vary from state to state and may change from year to year.  (Check with your accountant or book keeper for up-to-date tax rules.)

2) Charitable giving and corporate matching makes good PR.  Consumers like to know that the money they spend on a product or service isn’t all going to line the pockets of CEO’s and managers.  Consumers have many choices today when it comes to almost everything they buy, from grocery products to major purchases like cars.

When given the choice between similar products of similar cost, most consumers will choose to purchase from the company that makes a donation for their purchase or that regularly supports a charity.  Corporate matching programs definitely fall under this umbrella.

3) Corporate matching encourages individual donations.  When the tsunami hit Japan in 2011, many companies and organizations offered to match dollar-for-dollar donations made by private individuals.  This resulted in many donations that may not have otherwise occurred.  It also sparked many donors to give more than they may otherwise have donated.

4) It’s the right thing to do.  Tax deductions and PR aside, giving is simply moral.  Those who have been entrusted with wealth should share it with others who are less fortunate.  This is a principle that is embraced by many different religions, as well as many individuals who do not participate in any kind of organized religion.

Behind almost every successful corporation in America is at least one charity that has benefited from that company’s philanthropy.  It’s a tenet that many of America’s billionaires and CEO’s have made an integral part of their lives and careers.