SOURCE: Alignable, Inc.

Alignable, Inc.

December 17, 2015 08:00 ET

New Survey Shows Small Business Philanthropy on the Rise

47% of SMBs Plan to Give More to Charity This Year; 90% of Donations Support Local Causes

WALTHAM, MA--(Marketwired - Dec 17, 2015) - A new study from Alignable, the social network for small businesses, reveals that small business owners are projecting to donate more to charity this year than years prior. The survey of U.S. small business owners shows that 47 percent plan to give more this year than they did last year, and 49 percent plan to donate the same amount.

In total, 95 percent of small business owners plan to make charitable donations this year. The majority (81 percent) plans to give donations in the form of cash, while 75 percent will give goods or services, and 67 percent plan to give their personal time.

Turning the Spotlight on Charity Disparity
The survey unveils a large discrepancy in the giving approaches of SMBs and their wealthier business counterparts.

Whereas the top 1-percent give 2.8 percent of their discretionary income, the Alignable survey shows a quarter of small business owners plan to give over 10 percent of their profits.

"Large corporations get exposure for their sizable charitable donations," says Eric Groves, CEO of Alignable. "Their contributions are indeed generous, but when you look at giving as a percentage of profits, small businesses give more. It's important to shine the light on these overlooked entrepreneurs who understand the importance of giving back, and the impact they have on their communities on a daily basis."

Small and medium businesses' giving preferences also suggest a strong sense of community and focus on local needs. Human services, such as food banks and shelters, was the top charity of choice for 77 percent of respondents; 46 percent will give to youth groups, and 41 percent will give to community development organizations.

By contrast, wealthy philanthropists concentrate their giving on colleges, universities and the arts. In a study that examined giving habits of the 50 largest individual gifts to public charities in 2012, not one gift supported a social service organization, while 34 gifts went to elite educational institutions like Harvard, and nine went to museums and arts organizations such as the Metropolitan Museum of Art.

Keeping Commerce and Contributions in the Community
Overall, SMBs give closer to home, with 90 percent planning to give to local organizations, while 10 percent will donate to national organizations. Women are almost twice as likely as men (13 percent versus 7 percent) to support national organizations.

Immigrants: America's Fast-Rising Philanthropists?
While immigration policies are hotly debated in this country, first-generation immigrants are not letting the controversy impact their giving. More than half (58 percent) of first generation immigrant-owned businesses plan to give more to charity this year, compared to 46 percent of non-immigrant-owned businesses. Immigrant-owned businesses also give a significantly higher portion of their profits: 15 percent gave or will give over 20 percent of their profits, while only 9 percent of other businesses plan to give that much.

Generosity by Gender and Geography
Ninety-five percent of SMBs are planning to give charitably this year, but differences emerge among various groups of small business owners. Men seem to donate more than women, with 58 percent planning to give more to charity this year, compared to just 39 percent of women. Men are also almost twice as likely than women to give 20 percent or more of their profit to charity.

Regionally, the south is the most charitable, according to the survey. The western United States, home to many tech companies who have been called out for being stingy by Marc Benioff, was reported as the least giving.

Checkout Not the Place for Charity
There is one trend that does not appear to excite small businesses, and that is the point-of-sale donation. Seventy-four percent of small business owners oppose or have no opinion on cashiers asking for donations at checkout. By contrast, a survey of American consumers found that 71 percent of respondents have donated to charity at the register.

Away from the checkout, the data also shows that small business owners are frequently asked for donations in general. Twenty percent report being solicited more than 100 times per year.

SMBs Giving With Their Heads and Hearts
SMBs let their hearts lead when it comes to giving, with 86 percent citing they are motivated to give back because it is personally meaningful. However, small business owners also think strategically when it comes to donations; 28 percent cite tax deductions as a motivator. See here for some tips on strategic charitable giving for small businesses.

About the Alignable Small Business Charitable Giving Survey
Alignable collected results from 304 small business owners -- who are members of Alignable.com and have an Alignable business profile -- between November 23 and December 9, 2015 via an online survey. The margin of error is +/- 5.6 percentage points.

About Alignable
Alignable is the free social network for small business owners. Using Alignable's platform, small business owners connect with others nearby, within their industries, and across North America based on their interests. More than 7,000 communities across North America are using Alignable to build business networks to grow their businesses and succeed. Headquartered in Waltham, Massachusetts, Alignable is a privately held company with the backing of prominent investors in small business, networking and data, including Mayfield, Saturn Partners, NextView Ventures, Boston Seed, CrunchFund, Kensington and Lead Edge Capital.

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