Entrepreneurship and Charities and NEWS TOPICS and Small Biz Funding and Gifts and Philanthropic Research and Philanthropy and Small Business

Despite recession, small businesses support charity

November 24, 2008
As a flooring contractor for 18 years, Scott Seasor has sponsored a lot of his kids' sports teams. When he started coaching his second son in football, he decided to take the leap and sponsor a whole league.

The economy has changed dramatically since Castleton-based Seasor's Carpet and Flooring signed on with Hamilton County youth football.

"Three years ago, when I signed the contract, $4,000 was a good write-off," Seasor said. "It's going to be very tough to continue on with that. I'm worried now about keeping my doors open."

Business owners across the country are in the same boat. A national survey finds that 66 percent of small businesses donate cash to charities, but 60 percent also said the economic turmoil has already affected their usual philanthropy.

Madison, Wis.-based Chamberlain Research Consultants surveyed 1,033 small businesses on behalf of Utah-based Advanta Bank Corp. and The Chronicle of Philanthropy. Companies in the survey had annual revenue of $100,000 to $200,000, and the median range of their gifts was $500 to $2,000.

In the Indianapolis area, small-business owners told IBJ that they give in whatever way they can, and would like to continue as long as their finances allow. But the Chronicle survey indicates that giving is already on the decline. The survey found that 38 percent of businesses had reduced their giving over the past year, and 47 percent gave the same amount.

Just 14 percent of small-business owners in the survey said they had increased their giving.

"It's probably not the time to expect huge capital contributions," said Martha Hoover, owner of Indianapolis' Cafe Patachou, which has six local locations and usually donates food and gift certificates to charity.

Small-business owners find other ways to help not-for-profits: 51 percent of those in the national survey said they volunteered, while 41 percent donated services and 39 percent gave away products.

In-kind donations might be all that many businesses can manage in today's economy, said Kathryn Rietmann, resource partner director at the Business Ownership Initiative of Indiana, a not-for-profit that counsels extremely small enterprises.

"People are looking for alternative ways to have an impact, short of giving cash," she said. "I think we'll see a big upswing in volunteerism."

While small-business owners can be generous, most don't plan their giving. The ad hoc approach is understandable, especially in retail. "In a neighborhood restaurant business, there are so many ways we're asked to give," Hoover said. "Soccer moms and dads asking us to give gift certificates to their little leagues or PTAs. At each Cafe, it happens daily."

On top of those giveaways, Hoover estimated that she donates more than $10,000 in food directly to events. She said she wants to continue those sorts of gifts, even if the poor economy catches up with her restaurants. On Nov. 12, she opened a sixth Cafe Patachou at Indianapolis International Airport's new terminal.

"I'm proud of it," she said of her donations. "It's one of the pleasures of being in your own business."

In addition to the more common ad-hoc giving, Hoover and other Indy-area business owners also make gifts under a philanthropy plan that they lay out with the help of managers and co-owners. This year Cafe Patachou is promoting the mid-north neighborhood development group Harmoni with special menu items. Hoover also intends to donate cash.

"Every year we get involved in something," she said. "It really is part of our culture."

At Beck's Hybrids a fourth-generation seed company in Atlanta, family members gather each year to decide where to donate 10 percent of the company's net profit.

"Through the years, we've always given to a degree," Vice President Scott Beck said. In the last five years, he said the family has looked upon its giving as a tithe, or "being faithful in stewardship."

The recipients are always Christian-based and have included a mission to Africa, the local Christian radio station WGNR-FM 97.9 and Habitat for Humanity of Hamilton County.

"Last year we were aware of a lot of the food pantries and places people go for additional support for basic needs," Beck said. "Those needs have increased, [so] we budgeted in some additional amounts."

Some small-business leaders surveyed by the Chronicle said a lack of organization and time, as well as money, cut into their giving.

Indianapolis architect Jenelle Smagala, president of Synthesis Inc., thinks more small-business owners can give if they make philanthropy a priority.

"Some people think they can't do it; they don't have the money for it," she said. "If you budget it, just like you do equipment and furniture, then you'll make it happen."

Smagala said most of her giving is pro bono work, which she includes in her budget as a line item. Most recently, the 20-person firm discounted its rate to design a community center for Windsor Village Park, a public park on the east side.

"We're in a profession that is about people. We design spaces for people. We create environments for people," Smagala said. The annual pro bono project, she said, "That puts a personal touch on what we do."

Smagala added that she sees the effect of that goodwill within her firm. "It's the intangible benefits of our staff understanding that we care about people, which means in turn that we care about them. It builds loyalty."
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