As a successful entrepreneur or owner-manager of a business, you may feel a desire to give back to your community – whether through your time, knowledge, money or assets.
Of course, there’s no shortage of deserving charities and causes (in fact, you probably get approached on a regular basis); so it pays to have a considered strategy around this.
As well as the satisfaction of helping others, giving back can also be an effective part of your tax and wealth management programme.
Roger Wilson, Partner and Agri-Farm business specialist at KPMG Enterprise, highlights some of the key things to consider.
What’s your reason for giving?
With the rise of the social entrepreneurship, an increasing number of Kiwi businesses are being created with philanthropy at their very core. One example is our client Almighty Beverages – you can read their story on our website.
But plenty of other businesses also see value in giving back. For family-owned businesses, it can be a way to reinforce your own family values and create a sense of unity.
“Philanthropy can be a way to get the extended family involved, including those who may not work directly within the business,” says Roger.
From a practical perspective, companies (and individuals) who make charitable donations can claim tax deductions. Your KPMG adviser can explain how this works, and the best way to structure things from a tax perspective.
What are the other advantages?
The kudos from helping others and building new connections can only enhance your business reputation – and can even help you win new business. Plus, the philanthropic business will often have the edge when competing for (and retaining) employee talent.
“Today’s employees, particularly millennials, are seeking a greater sense of purpose in the work they do,” notes Roger.
“They’re attracted to businesses that are focused on more than just the bottom line.”
For example, KPMG New Zealand has the inspirational purpose of Fuelling New Zealand’s Prosperity.
“Our purpose is all about creating a better future for all New Zealanders, including those who are most vulnerable. This resonates deeply with a lot of people…it’s one of the reasons they choose to work with KPMG.”
What cause will you support?
That’s entirely up to you – but it should be something that the whole business (both management and employees) feel an affinity for and are keen to get behind.
It also makes sense to support an organisation that’s in a similar sphere. If you’re in hospitality, for instance, you may want to contribute to a local urban garden, or the DineAid scheme. Or if you’re in construction, there may be a low-decile school that needs your help with building-related projects.
As Roger points out, not every charity has a high-profile national presence – there are many lesser-known groups at local community level that would love your help.
“Perhaps seek out those smaller not-for-profits, the ones that are right on your doorstep. You’ll become more closely involved with the organisation; and even if you only have a modest amount of money or time to give, you can make a really significant impact.”
How will you go about it?
Providing a cash donation is simple and straightforward – but it’s not the only way to do it. The 2015 Giving New Zealand report showed that for every $1 given in cash by Kiwi businesses, they give an estimated $1.43 in sponsorship and $3.27 in donated goods and services.
Many firms, including KPMG, encourage staff to take paid ‘volunteer days’ to help out at their favourite charity; or provide their skills and expertise on a pro-bono basis.
Did you know that the IRD runs a payroll giving scheme? This allows employees to give regularly to charity out of their before-tax pay; while employers can choose to make matching payments.
And if you’re really passionate about a particular cause, you could even set up your own charitable organisation. Your KPMG Enterprise partner can talk you through what’s involved.
Like to know more?
KPMG Enterprise family business advisors can work with you to maximise the impact of your philanthropic endeavours, both for the organisations and causes that you support and as part of your personal tax plans. We’ll help you find the best ways to structure your support, so you can give generously while also being tax-efficient.
Or if you want to know the other ways KPMG Enterprise could help your business, give us a call on 0800 576 472 or email us on SmallBusiness@kpmg.co.nz