Giving back to the community
can lead to many happy returns
By Christine Selvig • Bankrate.com

Small businesses are finding that volunteer work doesn't just help their communities -- it helps their bottom lines, too, although the return can be tough to see at first.

Good deeds can sometimes have an immediate impact on a business's ledger sheet, but more often, the benefits of volunteering are seen in harder-to-count ways such as improved morale, broader contacts and better public relations.

Giving workers the time
Homestyle Publishing and Marketing in Minneapolis, for example, gives each employee four hours a month to donate to any organization they wish. Co-owner Jeff Heegaard says it's well worth the effort.

When he and his brother Bob first started out, Jeff says, "We didn't have a lot of money. We did have time and energy. We were 30 years old, so we started doing things together to meet our mission.

"It's a thrill and it's fun. And, I believe it adds a tremendous value to who we are. The quality of relationships change and are enhanced when people work together." Can Heegaard quantify the investment his company has made in volunteerism? No, he says. Nevertheless, he quickly adds that while the efforts can't be directly traced to profitability, "having people get out of their boxes in theory can be translated to the bottom line. There's a certain pride -- this is something more complex -- we're able to tell people who we are and express that culture."

Heegaard expresses a common belief among business owners -- that giving to the community can pump up a staff as it exposes a business to new and sometimes unanticipated opportunities.

For example, Rhonda Goodall's personal commitment to the arts in her hometown of Louisville, Ky., ended up giving her some publicity she hadn't expected. Goodall is CEO of a Architype Inc., a commercial interior and graphic design firm. The Community Foundation of Louisville featured her in an advertisement after she had established a fund for the arts and the local visual arts association.

Goodall says everyone in her company is involved in community volunteering on an individual level. "My experience (is), as small businesses, we don't have dollars, the thing we do have is time."

Time equals money
That time -- eventually -- can translate into money, according to a study of business owners by the Points of Light Foundation and The Conference Board, a New York-based business research group.

According to the study, volunteer programs can help a company gain a competitive advantage.

"Volunteer programs help companies attract and retain the people they need, and help build skills and attitudes that foster organizational commitment, company loyalty and job satisfaction," the report concludes. "Opportunities for personal and professional growth provided by volunteer activities encourage characteristics that improve the quality of the work force, like creativity, trust teamwork and persistence. A volunteer's community service contacts with government and business leaders can also make business contacts more productive."

Keep the books
While many of the advantages of charitable work are tough to measure, some translate easily into entries on the ledger, so don't forget the basics of good bookkeeping when it comes to donations.

Keep good records of your company's charitable contributions. You can claim a deduction on your personal income tax if you're running a sole proprietorship, partnership, limited liability or S corporation. Regular corporations will claim a charitable contribution for the company.

If you donate food or purchase an item from a nonprofit fund-raising event, plan to deduct only the actual value of the item. Donations of fully depreciated equipment are not deductible. The IRS recommends you refer specific questions to your tax Adviser.

Sometimes a contribution can be expensed as advertising. For example, when you support a local T-ball team, you create company name recognition every time the team puts on their uniforms.

The real bottom line: feeling good
Wil Johnson, director of BWBR, a St. Paul, Minn., architectural firm, puts down the blueprints and puts on blue jeans for a week each summer to work construction for Habitat for Humanity.

He and his fellow BWBR employees volunteer for purely selfish reasons, he says. "The reason we do it is because it makes us feel good."

-- Updateted: July 31, 2002