If you’re a business owner, the next few months ahead are going to probably be spent with your legal and tax advisors as you get a handle on the tax changes that are about to sweep our country. No, this article is not about the pros and cons of tax legislation.
However, the fact that our tax laws are changing could be an opportunity for your business.
Most entrepreneurs and business owners I know have already been speaking to their legal, financial and tax advisors about the tax reforms that will happen. My take is that a lot of organizations will be changing some of the ways they do business, so this is also an excellent opportunity for you to look at something else––corporate social responsibility (CSR).
- Consumers want to do business with companies that are socially responsible.
- 66 percent of customers are willing to pay for products or services from a socially responsible company.
- Millennials and Generation Z are more willing to patronize businesses that practice CSR.
As you take a look at the way your business is structured and you review your business plan, you might want to consider that corporate social responsibility as part of the equation.
If you’ve been thinking about implementing CSR into your business for a while, this might be an opportunity for you to become a B Corporation. B Corps are certified as such after they undergo a thorough vetting process by the B Lab concerning transparency, accountability, and performance. These types of businesses also commit themselves to creating high-quality jobs, improving the life of the people in the communities where they operate and even seeking change for a better world.
I own several social enterprises and will share with you that my team members and also our partners love the idea that our businesses are seeking to help improve the lives of countless of people. Social enterprises have two primary goals: 1) to make a profit; and, 2) to create a social impact. Social enterprises can be both for-profit and non-profit ventures; however, if they are nonprofits, then the money they make (e.g., selling artisan merchandise) is reinvested into the organization. I love having social enterprises as part of the mix of my suite of brands, and it could be something you consider for your own business.
10 Percent to Charity
Perhaps thinking about having your business becoming a B Corp or social enterprise is not something you can do in the near-term. Something else you can easily consider is to create a partnership with a local nonprofit organization and make it a point to give 10, 15 or 20 percent of your profits to them. If you form a partnership, you have the opportunity to credibly and consistently tell your clients that you’re part of a “joint venture” with the nonprofit because of your memorandum of understanding. It’s a chance for you to have a critical differentiator between your business and your competitor on the other side of town, or clear across the country. And, your customers will enjoy knowing that you are supporting a charitable cause and may make it a point to patronize you because of it.
Many companies want to do good, and countless businesses provide their teams with volunteer and social good opportunities (e.g., days of service). But, another thing you can do is to reimagine giving and by that I mean reimagine how you do business. Perhaps you can get your team and some key and trusted advisors, including customers and brainstorm what makes sense for your business to do for CSR. Possibly giving for your company does not have to mean volunteering, but instead can be reimagined as something else that aligns with your core work (e.g., an accounting firm sponsoring a class on financial education for high school students).
Some companies create a functionally related business, which is a separate entity from their main group, but is a private foundation. The private foundation itself can be tax-exempt and is funded by the founder or business associated with the organization through investments of cash or other assets, such as securities. A private foundation differs from a public foundation in that the control of the body is held by the founder or a small group, such as a business.
As you begin to evaluate how the tax changes will be impacting your business, take a step back for a moment and consider aligning your company with social good. You can take it from me who’s done it: It’s a competitive advantage and helps set you apart from others.
Author of “Not Your Father’s Charity: Grip & Rip Leadership for Social Impact” (Free Digital Download)
© 2017 Wayne Elsey and Not Your Father’s Charity. All Rights Reserved.