Contributing to a Nonprofit Is Profitable for Your Business

Contributing to a Nonprofit Is Profitable for Your Business

Today, businesses must have values and show that they are acting on these because consumers now choose to support socially responsible brands. Contributing significantly to nonprofit organizations shows concrete proof of social responsibility. These contributions are also tax-deductible, making them cost-free.

Consumers Reward Brands with Values Through Purchases

These are reflected in the findings of a survey by brand measurement company Vrity in January 2021 among 1,072 respondents across the U.S. The study aimed to study generational differences in consumer values and what brand values matter to them, if any. Vrity CEO and co-founder Jesse Wolfersberger stated that most consumers are now making purchase decisions based on values, both theirs and the brands’.

More than half or 55 percent of consumers stated that they are more conscious of brand values today compared to the previous year. The most conscious of values are millennials and people who have shifted to remote work.

The majority or 60 percent of respondents have purchased a brand that upholds the same values they believe in, while 53 percent state that there are certain brands they would never purchase because of the brands’ stand on certain issues. Millennials and Gen Z are the most conscious of buying based on values.

While shopping online, 49 percent research brand values before making purchases. During in-store shopping, 46 percent research brand values before buying. Among all respondents, 82 percent are willing to pay a higher price for a value-aligned brand, 43 percent are willing to pay double, and 31 percent will buy a value-aligned brand at any price.

Brands must not stay silent on issues for fear of a backlash. Most respondents, especially millennials, prefer brands to make a stand, even if it disagrees with their own stand. Gen Z will most likely not buy from brands that are silent on issues.

For baby boomers, the most important causes are fighting poverty, hunger, and homelessness. For Gen X, millennials, and Gen Z, the most important causes are ending racism, gender equality, and LGBTQ equality.

Most generations, except Gen Z, prefer affordable brands that offer good value, have good customer service, and are honest and authentic. Gen Z prioritizes brands that promote friendship and family, treat their employees well, and are fun and comfortable.

Retail TouchPoints shows similar findings. Most or 90 percent of consumers consider values important in choosing brands, 72 percent buy from brands that reflect their values, and 64 percent avoid brands whose values they do not believe in. Consumers’ loyalty to a brand they believe in will raise its lifetime profits by 85 percent.

The majority or 67 percent of consumers, especially millennials, are willing to pay more if profits go to charity, and 81 percent of millennials expect the brands they support to make charitable contributions. Having a checkout donation increases a brand’s average order value (AOV) by 29 percent.

The 2020 Consumer Culture Report of 5WPR likewise shows this trend. Among millennials, 83 percent prefer companies aligned with social issues, with 76 percent expecting brand CEOs to be vocal about issues. Brands that show their political and social beliefs are favored by 62 percent, while 65 percent have boycotted a brand with an opposing stance on an issue.

How Corporations Can Show their Values


The most concrete way that corporations can prove their values is to donate cash to nonprofit organizations. Since various generations prioritize different causes, companies can spread donations among these causes. Alternatively, you can choose the causes that your target market prefers.

Cash donations are best because nonprofit organizations can allocate their spending based on what they need most. For instance, a health facility may need more medical utility carts with drawers, while a nonprofit focusing on education may need the money to provide laptops to children in need who are now doing distance learning.

In 2020, the government suspended the limitation on tax deductions for charitable contributions. This has been extended to 2021. Corporations can deduct donations to nonprofit organizations up to 25 percent of the company’s taxable income. Before the enactment of the Coronavirus Aid, Relief and Economic Security (CARES) Act, this was only up to 10 percent.

This means that companies must now increase donations to increase tax deductions. It also makes the donations essentially cost-free. It is a win all around, especially considering the increase in consumer goodwill this will bring in and the resulting profits from purchases. For companies, it pays to be good and do good, putting your investments in your values.

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