Why Your Business May Want to Set Up a Charitable Fund

Corporate responsibility is more important today than ever before. If your business is in a financial position to set up a charitable fund to help others, establishing a grant can be a great way to give back to the communities you serve.

Putting a charitable program in place not only benefits your community, but it's also a smart way to attract talent and stand out from the competition. Creating a grant can increase your visibility and provide opportunities for building relationships with other organizations or community members.

Is a grant right for you?

Before setting up a charitable fund, make sure your business can afford to make the donation. Look at your cash flow to ensure that giving a grant won't harm your business's financial health. You can always make a difference in your community by volunteering or donating products and services if a grant doesn't fit within your budget.

You should also choose a recipient that aligns with your business and values. This can be an individual or charitable organization. For example, the owner of a hair salon chain may set up a tuition grant to a student who demonstrates need, or a dentist may create a grant for a nonprofit that brings dental services into at-risk communities. The more connected you are to the cause, the more meaningful the grant program will be to you.

How to start a grant

Once you determine that creating corporate grants for nonprofits is right for you and have identified the type of recipient you plan to help, speak with your accountant to determine how much money you should give. You may also be able to realize tax benefits through the donation because businesses can deduct up to 25% of their taxable income for charitable contributions.

Next, create a way for potential recipients to apply. You can find grant application templates online or speak to your accountant about having one created especially for you. Establish the criteria of who's eligible to apply, and set a deadline. You may also want to add frequently asked questions to your website that includes contact information if someone needs further details.

To determine your review process, create a rubric to help you rate applicants. You may also want to invite your board of directors or employees to review grant proposals so that selection is free from unconscious bias.

Maximize results

A key part of the process for setting up a charitable fund is creating a marketing strategy around it. Share the opportunity on social media channels, inside your business and through emails to customers. Cast a wide net so you can give more people a chance to apply while also sharing what you're doing with others.

If your company is in a strong financial position, setting up a grant can provide you with several benefits—and the best one may be the satisfaction you receive from helping others.