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News & Press: ABAG's Baltimore Business Journal Column

ABAG's BBJ Column: MD Businesses Need to Start Planning Their Giving

Tuesday, March 17, 2015   (0 Comments)
Posted by: Buffy Beaudoin-Schwartz
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March 13, 2015

Baltimore Business Journal

By Celeste Amato, Contributing Columnist

Maryland businesses play a vital role in maintaining the state's quality of life, not only providing jobs and economic stability, but also offering charitable support to many projects and programs that enrich the lives of all residents.

While business owners across the state are eager to respond to community needs, relatively few have a plan guiding the distribution and use of their charitable contributions. In the same way that a business plan helps a company stay on course toward its financial goals, a charitable giving program, however informal, can help a business achieve its charitable goals and effectively support the communities it serves.

I've recently written about how businesses contribute to our state's quality of life through charitable giving, discussed how to determine where company and community interests can intersect, provided tips on creating a business giving program, and highlighted how giving doesn't have to be cash only.

Another consideration for businesses is thinking through what the right percentage is for their giving plan. The reality is that there is no standard answer to the question, "How much should our company give?" Contributions are subjective and depend entirely on your business, your personal goals, and your giving comfort level. Some businesses set aside up to 5 percent of their pre-tax income for contributions.

In formulating a budget each year, companies may take into account issues such as:

  • Current revenue and profit projections
  • Internal competition for resources
  • Availability of other resources
  • Spending patterns of other companies in the area

Establishing a budget offers a framework within which to make decisions. And, it's an easy way to manage and track contributions throughout the year and help in an annual evaluation of effectiveness

Here are some questions to consider when establishing a budget:

  • How much of our contributions is tax deductible?
  • How much money did our company contribute last year, and in previous years?
  • What is our target charitable budget?
  • Can we afford to give more?
  • Would we like to give more?
  • How much of our total giving budget do we want to give directly?
  • How much to we want to give in matching employee gifts?
  • Will the entire budget be centralized or will there be any funds managed within other departments or business lines?

Business owners across Maryland tell us that corporate philanthropy — charitable giving directed by a business entity — is highly rewarding to everyone associated with their business. Thinking through a giving plan for your business is an important process in ensuring success across the board.

Celeste Amato is president of the Association of Baltimore Area Grantmakers.

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