Small Businesses Undervalue Impact as they Support Local Causes, Survey Finds

If you’ve ever wondered about the impact or motivation of small businesses giving to their local communities, a new study reveals how intertwined community success and small business growth really are.  Nearly all (99%) of small businesses gave back to their communities within the past year, and most (97%) prefer to give to local causes and nonprofits, according to the survey.

Small businesses view what they give back to their communities as an investment (60%) and important to their business’ growth (70%), 69% stated that their primary return on investment (ROI) from giving is their personal satisfaction from supporting their communities, followed by 68% measuring ROI by the ability to create a benefit in their communities.

The Spring into Kindness Small Business Study was conducted for conducted for seedership, a Connecticut-based community-giving and storytelling platform for small businesses, designed to create transparency and visibility around the good they do for their communities.  It was conducted by Drive Research, an independent market research firm, which surveyed 403 small businesses across the nation to examine how and why they give back, and their expectations of benefits from their charitable contributions.  The survey was conducted prior to the coronavirus crisis, but has implications for the current circumstances, officials point out.

“Throughout the past two years, we’ve learned that small businesses care deeply for their communities and give back primarily out of passion to make a difference, and since the outbreak of COVID-19 we have seen their desire to help heightened,” said Jennifer Smithberger, cofounder of seedership. “Our study reinforces the authenticity of small businesses’ commitment to their communities and also identifies additional opportunities for giving – to better advance their marketing efforts and business growth.”

The majority (60%) indicated that they consider their giving to be an investment in their business versus a trade-off or expense, with 70% stating community giving is important to their growth. More than two-thirds (70%) gave consistently throughout the year, with 87% asked to donate at least once a month. The survey found that 93% have plans to also give in 2020.

They survey also found that three-quarters (75%) want to increase their community giving, while approximately half cite that the lack of available finances (50%) and time (46%) prevents them from doing so. Nearly seven in ten (69%) stated that their primary return on investment (ROI) from giving is their personal satisfaction from supporting their communities, followed by 68% measuring ROI by the ability to create a benefit in their communities.

Small businesses give back to their communities in multiple ways, the survey found, with money being the primary (75%) method, followed by volunteering their time (62%), items gathered in collection drives (58%) and in-kind donations (35%).

The seedership study provides insight into the unique opportunities small businesses have to grow as a result of their close connections with, and continual support of, their local communities.  Businesses tend to underestimate the full value of their donations and the competitive advantage they could gain, seedership officials explain. 

While almost all (95%) track their community giving, most track the monetary value of what they give – either as money donated (73%) or money raised (30%) – leaving a hazier picture around other giving components, such as time and items.  And three out of four stated that they could promote their community giving more effectively, citing that the most common methods they utilize to drive awareness of their efforts are word of mouth (69%) and Facebook (67%).

The report also notes that businesses increasingly “harness their expertise, resources and entrepreneurship to accelerate positive change and be recognized as a force for good. Consumers are driving this trend with their purchasing power and ability to influence brand reputation.”  Recent studies have shown that consumers prefer doing business with organizations that support a cause, and tend to be motivated to buy knowing that their purchase is helping make a positive impact on society.

 “In today’s environment, strong communities matter more than ever. Consumers want to help support the small businesses that give their community character, create jobs, foster the local economy and give back to causes they care about. The good that a small business does every day makes up their community story – a story that can help their business grow,” Smithberger said.

The report points out that “making a difference in their community and giving back to those who support their livelihood is not simply a business strategy; it’s a part of who they are and how they operate every day.”  The report adds that “While contributing to their community is vital to their success, what they do is often undervalued and understated.”

seedership’s patent-pending act tracking, management and sharing platform is designed to make it easy to aggregate every dollar, minute and item a small business gives back to visualize their unique community story. The full study can be seen at www.seedership.com/research.