The Small Business Value of Better Giving

Small businesses play a vital role in shaping and enriching their communities, serving as a foundation for local economies. It is estimated that there are nearly 33 million small businesses. They employ nearly 61 million people and generate nearly 44% of all economic activity in the US.

They are also regarded as an important part of the cultural fabric that defines a community. A 2024 Gallup survey found that over two-thirds of the public “have a strong sense of trust” in small businesses, more than any other institution type such as big business, government, schools, media and others.

Which charities to choose?

The Outsize Impact of Small Business Giving

The NFIB (National Federation of Independent Business) conducted a study in 2024 titled “Small Business’ Contribution to the Community” that surveyed the different ways that small businesses make a charitable impact in their communities.

Generally speaking, small business contributions occur in three primary ways:

• Financial Support

• Volunteering Time

• In-Kind Contributions

Source: 2024 NFIB Small Business' Contribution to the Community Survey

This article will dive deeper into the specifics of each.

Financial Support

Making cash gifts to community groups/causes was the most common method of support. The survey indicated that nearly 90% of small business owners gave to charity, engaging in a blend of both business & personal giving. The survey reported that:

• 15% of business owners had 100% of their giving done through their business

• 26% of business owners had 50-99% of their giving done through their business

• 9% of business owners had 25-49% of their giving done through their business

• 22% of business owners had 5-24% of their giving done through their business

If we project these findings, we see that nearly 16.5 million small business owners use their business to give 25% or more of their total charitable giving.

Volunteering Time

Nearly 76% of small business owners reported that they volunteer their time to local charities. The survey indicated that nearly 42% of the businesses devoted 50% or more of their volunteer time to efforts that were associated with their business name. Another 6% reported that 25-49% of their volunteer time was associated with their business.

In-Kind Contributions

Examples of in-kind contributions include:

                  -providing a meeting space at the business to a charity

                  -donating excess inventory to a cause

                  -offering a product/service as an item for a charity auction

69% of small businesses value their annual in-kind giving at more than a $1000, with 27% valuing their annual in-kind giving at $5000 or greater.

The Why of Small Business Giving: The Importance of Involvement

According to the NFIB survey, 71% of small businesses reported that being involved in helping their community was important to the success of their business, with 18% regarding it as very important. The survey also inquired about community involvement as a factor in employee morale/wellbeing. 68% of small business owners reported that it mattered to some degree, with 17% reporting that it was of high importance.

Another dimension looked at building a better business climate in their local community. 82% of small businesses regarded that effort as important, with 30% regarding it as very important.

Additionally, 92% of small business owners believed that their business involvement in local community causes made their community a better place to live.

Conclusion

The NFIB survey captured the degree and value that small business owners felt concerning the importance of community involvement/charitable giving and its role in business success, employee morale, the betterment of the business climate, and the betterment of the local community. The survey begs the question: If your business is not involved in community giving, are you allowing your business to be at a disadvantage?

Having your business give thoughtfully and with strategic impact can be a source of confusion or indecision. Generosity Nexus has the insight and experience to guide businesses of all sizes on how strategic giving can grow both the business and the communities and audiences that the business serves.

Don’t hesitate to schedule an appointment to learn more about how we can help you.