How Discounting / Giving to Non-Profits Can Grow Your Business
There are many reasons to give generously to non-profit organizations (NPOs), both personally and as commercial organizations. Today we are going to laser focus in on one area: the tangible ways in which working with non-profits can actually grow your business.
Free Traditional Media Marketing
Working with multi-national NPOs probably won’t land most small or medium businesses in media publications. However, working with local non-profits is a great way to gain the attention of the press. Sure, you probably won’t find your business or its products on the front page of the New York Times or Washington Post, but you may find yourself in your local newspaper or mentioned on the town Facebook page.
Most geographic areas, even sparsely populated ones, have a newspaper of some sort that is released on a regular basis and delivered to everyone within that geographic area. These papers are always looking for something newsworthy to report and a business providing any form of tangible assistance to a non-profit certainly counts!
Many areas also have local TV or radio stations that will be looking for interesting, uplifting content to share with residents.
Practical Tip: Work with local non-profits in some significant way, through giving of products/services or significant discounts; then create a press release with the non-profit you both can share with local media outlets.
Free Word of Mouth Advertising
Sometimes it seems that people may not as readily go off the recommendation of a friend or co-worker when choosing a product or service to buy – choosing instead to research on the internet – but that doesn’t mean those personal recommendations aren’t still invaluable! Assuming your product/service is on par with the competing products/services your potential customer is looking at, a personal recommendation can push a customer right into your arms and away from the other guy!
Recommendation: Don’t write off word of mouth advertising just yet! Take the tax break and get the potential free referrals!
Free Show Room Advertising
Not every business can afford a show room. So how do you show potential customers your product or service quality and operations? By local installs, of course!
Many non-profits are more than happy to let you walk a potential customer through the building you just renovated for them, or check out the new ultra low water toilets you provided. NPOs generally fairly high use buildings and equipment, so if buyers are concerned about quality you can assure them with spaces where everything isn’t kept just so, where the kids really are slamming the doors every day or how your tires are still in great shape on that NPO bus after so many miles!
Recommendation: Find local non-profits that need what you have to offer. Don’t assume they’ll be okay with you bringing clients by, ask explicitly, and be very considerate of the NPO’s time and resources!
Free Customer Testimonials
Sometimes people want to talk to someone who isn’t being paid to sell your product – and representatives from NPO’s are often more than happy to pick up the phone or chat for a few minutes at the office with your potential client who just needs those last few whisps of uncertainty relieved.
Recommendation: You can ask when you’ve made the donation or you can contact them later. Again, be considerate of the NPO’s primary function and don’t overwhelm them with contact requests!
Free Web Marketing
Don’t forget the web! Reach out to local bloggers and internet based media organizations with information about what you’ve been doing.
Recommendation: If you are offering a product or service which requires actions over a period of time (e.g. many construction services), don’t wait until everything has been completed to let the media know – reach out to them early in the process – they may be interested in doing a series that follows your progress!
Free Viral Marketing
You may be able to get a viral image/meme/video out of your work with an NPO. The NPO may take the initiative to create this viral content and distribute it themselves. NPO’s are always looking to raise awareness about the work they are doing, but even if they don’t initiate that doesn’t mean you can’t create your own viral content and share it!
Recommendation: If representatives of the NPO ask for permission to take photos or video of you in process, this may be their way of gathering material from which to create that great viral content!
The Familiarity Advantage
Why do people use the products, services, and software they do? Because they are familiar with it! Think about all those students at all those schools who are using Microsoft Office for their productivity needs. Who do you think they’ll want to use at their eventual place of work? Microsoft! Get folks using your product and they are likely to stick with it when they need it for other projects at work or home.
Recommendation: This can be especially useful in a market where the product/service has reached a place of stasis resulting in little obvious difference between competing products/solutions.
The Discount Advantage
Farmer John sells apples. Each year he sells 10,000 apples for $1 each and makes $10,000. 10% (1,000) of the apples he sells each year are bought by non-profit organizations. If he reduces the price of apples to $.75 each for the non-profits he loses $250 (3% of his profits from the year) – right? No way!
When Farmer John lowers his price for non-profits, it is likely the number of apples the non-profits purchase will increase, AND it is likely that he will secure the business of additional non-profits.
Lets imagine for a minute that the reduced price for non-profits results in an additional 1,000 apples being sold each year. Farmer John is now selling 9,000 apples at full price ($1 each) and 2,000 apples at a 25% discount to non-profits ($.75 each). Farmer John’s total profits would now be $10,500 – an increase of $500 (5%) even though he has lowered his prices by 25% for non-profits!
Recommendation: You don’t have to give your product or service away to work with non-profits. Many would feel extremely happy to receive a decent discount. On Philanthropy Catalyst we only list offers that are 10% or more off of regular prices (unless you can show there is a reason, such as high product or labor costs, that make it difficult to reach 10% – in which case it is likely that your <10% offer would still be welcome by non-profits – since your competitors will be facing the same constraints!).
NPOs are often located in highly trafficked areas (not just the people who use the services of the NPO but also those who drive by!). Did you replace a roof? Ask if you can place a small sign outside the building announcing that you provided the roof for a period of time.
Recommendation: Even better if your product has the name/logo built into it! For example, that lawnmower you sell that has your logo nicely embedded on its side.
The Perception Advantage
What business can we trust to do a quality job? To provide a quality product? An organization that has been working with a non-profit gains instant credibility! Create a page on your website where you share the ways you’ve worked with non-profits – when potential customers visit they are likely to consider your charitable actions as representative of additional positive characteristics – for example, trustworthiness, reliability, and fairness.
Recommendation: Make sure your character matches your giving. Folks will quickly discover if your giving is simply an advertising technique, and then you may end up worse off than you started!
The Tax Advantage
I’ve saved the best known advantage for last – tax deductions. Your charitable giving (including discounting!) is generally tax deductible. This means you can reduce your taxable income, which means you pay less taxes, which frees up more money to spend on marketing your products, building new prototypes, or getting that air conditioner you’ve been dying to have for your office!
Note: Only in some states is labor considered a deductible expense. You’ll almost always find materials to be deductible!
Hopefully we’ve shown you a few ways beyond the basics (e.g. satisfaction from contributing to a good cause) that your business can benefit from charitable giving/discounting. Are there items we missed? Ideas you have for making charitable giving a mutually beneficial relationship between your business and non-profit? We’d love to hear them!
If you wonder whether we’re just spouting off nonsense, and would like to hear more from some folks who have some credentials in the commercial arena, take a look at these articles:
- Inc.’s 4 Ways That Supporting Charity is Good for Business (by Molly St. Louis).
- Harvard Business Review’s The Competitive Advantage of Corporate Philanthropy (by Michael E. Porter and Mark R. Kramer).
- Entrepreneur’s 4 Ways Your Company Benefits from Giving Back (by John Boitnott).
- Fortune’s The Best Employers Are Adding Giving Back to Their Core (by Kim Peters and Sarah Lewis-Kulin).
- Mossberg & Company Inc.’s Three Reasons Why Companies Should Give Back (by Katie Coughlin).
- Inc.’s Why Giving Back Should Be Part of Your Marketing Strategy (by Adam Heitzman).
- Wall Street Journal’s How Small Companies Should Give to Charities (by Louise Lee).
- CIO’s The Value of Free: How Businesses Benefit from Giving Stuff Away (by Larry Alton).
- LendEDU’s Why Your Business Should Consider Supporting a Charity (by Dave Rathmanner).
I’m not an expert in law, finance, taxes, or business. Talk to appropriate experts to ensure correct implementation for your organization.