Small Businesses are Big Givers to their Communities

Small Businesses are Big Givers to their Communities

Team seedership
April 15, 2020

Spring is officially here! That means it’s a time for new beginnings, a time for growth, and a time to approach situations at a new angle. It’s also time to announce the conclusion of our first ever Spring Into Kindness Small Business Study. We are preparing a report to share with you the extent of what we learned. One of the first and biggest key takeaways from the study is probably something everyone had a feeling about: small businesses are big givers in their communities.

This initial finding was not surprising to us. Small businesses are often thought of as the foundation of an economically thriving community. Think back to our seedership “community model,” and how we described that when businesses give back to their communities, it creates a communication loop that helps the business and the community grow. Consumers want to know that their purchasing dollars are being used to benefit the causes they care about and their own communities. When businesses are transparent and share information on all that they do for their local communities, it builds trust which creates more businesses that work towards building the community.

Even in the midst of the 2020 coronavirus global pandemic, we’ve witnessed and spoke about so many examples of small businesses across the nation responding to the needs of their communities. Even though the data in our study was collected prior to stay-at-home orders, social distancing mandates and business closures, we believe the insights and conclusions gathered will be relevant for small business owners to act upon. So let’s explore what small businesses being big givers really means.

Small Business Have Big Hearts

When we say that small businesses are big givers, we mean it. According to the data collected from our 2020 Spring Into Kindness Small Business Study, 99% of businesses gave back in some form (we will get to that later) during 2019. Further, at the time of the survey, 93% of the respondents had plans to give back during 2020.

When we took a step back and analyzed these findings by industry, we found that these numbers generally stayed the same across all industries. This finding was what we were expecting because there are other studies that verify this finding. According to SCORE, a nonprofit and resource for the US Small Business Association, small businesses give 250% more to local nonprofits and community causes than their larger, corporate counterparts. Broken down by profits, small businesses give up to 6% of their profits back to the community, according to SCORE.

Why do small businesses give back so much to their communities? Well, for one, it could be inferred that since small businesses are such an important part of their community ecosystem, it makes sense that they give back to ensure the health of their communities. But beyond that, our study delved into what qualifies a successful community engagement project, and some of the top answers involved the good it does in the community (71.0%), personal satisfaction (61.8%), and how it deepens relationships with customers (51.6%). All these “key performance indicators” describe an intrinsic desire to do good for their communities being the primary motivation for charitable giving campaigns, the other many business benefits like increased sales, reputation boost, and customer loyalty are the after effects.

Long story short, small businesses have big hearts. They give back, and they do it often. Although the 99% statistic included businesses that gave back at least once during the past year, our study found that 70% of respondents reported that their organizations gave back consistently throughout the year.

How these businesses give back took on many different forms. Larger businesses and corporations often refer and report their charitable giving efforts as “corporate social responsibility,” “CSR,” or something similar, but small businesses rarely think of their community giving efforts by those names. In fact, one of the bigger takeaways from our study concluded that small businesses’ giving efforts were often undervalued and understated. Let’s take a look at what small businesses are actually giving back.

Small Business Kindness Is Often Undervalued

When we conducted our study, we went in knowing that small businesses were giving back, but unlike their larger counterparts, they often don’t provide transparency into what they are really doing for the community. First, we wanted to know how small businesses refer to their charitable giving efforts. The top answer, donations, at 20.1%, revealed that some respondents think of charitable giving only as it relates to finances.

However, when we went a little further and asked what types of community giving have these organizations taken a part in. 74.7% of the respondents reported their organizations donated money to a cause, 62.3% told us they volunteered time, 58.1% said they conducted collection drives for food, clothing, and other goods, and 41.4% reported that they took part in sponsorships.

With things like time volunteered, items collected for a charity drive it can be hard to attribute this in financial terms. Therefore, reporting the outcomes of these types of community giving tends to fly under the radar when keeping track of it. But, the impact on the community can be just as valuable as a financial donation.

As we have discussed before in our blogs, small businesses are a cornerstone of their local communities. Small businesses get most of their business from locals, employ almost exclusively locals, and depend on locals to help spread the word and recommend their business to their neighbors. Thinking of the interdependent relationship between small businesses and their communities, it makes sense that small businesses would be contributing so much to their local communities.

Even now, as more and more small businesses and retail shops are required to close their doors to comply with local and national stay-at-home and social distancing protocols, we have seen businesses going above and beyond to respond to their community’s needs. From local breweries adapting their operations to create hand sanitizers, to businesses manufacturing and donating face masks to hospitals, to restaurants feeding kids who are without school lunches, or businesses helping out of work hospitality workers, small businesses are showing their big hearts even during these hard times. Small businesses are responding in ways that show us they can be the first line of support when a crisis strikes the community. They see themselves as problem solvers and a part of the solution.  

Small Businesses Have a Big Part of Our Hearts

Our 2020 Spring Into Kindness Small Business Study revealed to us what a big part small businesses play in the overall ecosystem of a community. According to the SBA, in 2018 small businesses employed 47.5% of the workforce, that’s a little under half of all the jobs in America. Small businesses also help promote and exemplify local culture, and are innovative problem solvers that are able to respond to and adapt to the needs of their community. They give back time, money, and resources to their communities to ensure community growth and stability. As much as small businesses depend on their communities, communities also depend on small businesses.

Although these times are difficult and uncertain, the impact of all that small businesses do for their local communities should not go unnoticed or understated. Now more than ever, it’s important to recognize how big small businesses’ roles are in giving back to the community. It’s important for everyone to consider giving back and supporting our local small businesses during these difficult times in order for our communities to rebound. Our study found that small businesses consistently love and give back to their communities all year-round. Small businesses need support and appreciation from their communities to keep the cycle of kindness and growth going. Remember, we are all in this together.

Stay tuned for more insights from our 2020 Spring Into Kindness Small Business Study, as we explore the value and impact of small businesses’ kindness on their communities.

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