by Celia Craske

Created on: August 08, 2006   Last Updated: June 13, 2009

The reason that many companies make charitable donations is not because of any sense of altruism but because of the effect that charitable donations have on their tax bill. There are also companies whose charitable support arises from the ethos that governed the formation of the business. Many of these are firms that were founded by social reformers of the nineteenth century; the Co-operative movement, Cadbury, and Lever Brothers (now Unilever).

For companies whose business lies totally outside the public sphere, the choice of charity is immaterial. In my opinion such companies should seek out the lesser known and less popular charities to support; they will still reap the same benefits but the donation will be more highly valued.

For businesses that seek to improve their public image in addition to the tax benefits, the charity chosen should reflect the size and the location of the company. Supporting a major international charity will do nothing to enhance the image of a local or even a national company; any donation they make will be dwarfed by those made by the giant multi-nationals.

Companies also choose charities that act as a counter balance to the negative views held by the public. This is the reason why companies such as B.P. and Shell have massive environmental programmes and support associated charities; or why McDonalds supports children's health charities. The message that is given out is "Hey, look at us; we're not the bad guys you thought we were."

Giving to the right charity can mean far more to a company than the tax relief it receives on any donation. Many charities hold annual balls or dinners to which their corporate sponsors are invited. Not only do these events benefit the charity through the money raised, but also it gives businesses the opportunity to make new contacts.

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