How to Keep Donating During Inflation: What You Can Do to Cut Costs Instead of Charitable Giving
If you watch the news or read any writing in the financial realm, you’ve likely heard talk about inflation. With recent months continuing the trend of rising prices, worries about coming inflation—and the impact of it—are everywhere. When rising costs start to force changes to your budget, will you cut your charitable giving?
Why Inflation is a Problem for Your Company and Your Charitable Giving
For many companies, the biggest challenge in this area is how inflation shrinks your company’s budget. Inflation can squeeze your company’s budget on both ends, making your money less able to buy what you need and making people less likely to buy your products or services. Inflation can make it harder for your company to maintain any kind of significant profit margin.
It’s important to understand both what inflation is and how to know when it’s coming. The only way to protect your company—and your ability to give back to your community—is by being prepared and aware.
How to Track Inflation for Your Company
The most common way that inflation is tracked uses the consumer price index. This index, which officially began in 1919, uses the price of various commonly purchased goods to track the value of your money. By tracking when the cost of those goods increases, the consumer price index estimates the relative value of a dollar in the current economic market. Inflation, or when the relative value of the dollar decreases, means that those costs have increased.
For companies, inflation can show up in the creeping costs of goods and services. This can make a balanced budget difficult, as last year’s line items increase in cost until you either have to increase budgets or cut purchases and compensation. That’s a choice no company likes to make, as increased budgets mean a need for increased revenue—which can be especially challenging in times of inflation, as your customers are seeing the same pinch in their budgets that you’re experiencing.
Ways to Cut Costs Instead of Cutting Charitable Giving
Inflation is a fact of life. The cost of goods and services is drastically different than 20 years ago, and this trend is unlikely to change. Planning for inflation generally is always a good idea, but certain periods of time show unprecedented growth in inflation that can devastate a company’s bottom line. Many companies in these times default to cutting discretionary spending, including charitable donations. While this is an easier area to cut quickly, it can harm your image in the community as well as have tax implications for your organization. There are often other ways to cut costs that simply streamline and innovate rather than eliminating much needed aid to the causes that matter to your company and employees.
Building Efficiency with Technology through Automation
One of the easiest ways to cut costs and fight inflation as a company is to build in better efficiencies. By reducing the amount of time it takes to do many tasks, you’ll free up your team to focus on more revenue-generating activities and avoid having to pay for extra services to get things done. A quick win is to find an effective software solution that is both cost-effective and has a significant impact on your team’s workload.
Maybe that’s automating some HR functions so that you still keep your employees engaged but free up your Human Resources team to focus on issues like compensation analysis and recruiting in this tight labor market. Or perhaps you can find ways to automate manual tasks that often take a lot of focus and time, like organizing company volunteering or giving campaigns--both of which have also been shown to increase employee engagement. In a tight labor market, keeping your team happy saves you money on recruiting costs and avoids competing solely on the basis of salary to win and retain top talent.
Tools like DonationXchange can help you set up employee volunteering, giving, and more in simple, automated workflows. You can reduce the hassle of responding to requests for corporate donations and support, as automated workflows, screening quizzes, and task assignment capabilities keep your team on track. Think of DonationXchange’s employee portal as a project management system for your human resources and employee giving functions, streamlining the process and keeping you ahead of the game.
Boosting Your Benefits
Another method to counteract the impact of inflation is by finding unique ways to boost the benefits you offer. In a tight labor market, competing to retain and recruit top talent solely on the basis of salary is only going to hurt your company’s bottom line. While the right compensation is important, think about other ways your company can boost your benefits, like increased time off or flexible work schedules. Remote work provides freedom that many people crave, so keeping some remote work options can go a long way with many employees.
It’s also important to think about other aspects of how your employees experience their work. Do you provide opportunities for them to form meaningful connections with others at work? Feeling isolated can quickly sabotage an employee’s engagement level. Do they feel like the work they do matters and makes a positive impact in the world? Providing volunteer opportunities and giving options, especially with some kind of company match or competition, can help your team feel like their day-to-day work is doing something good in their community. Tools like DonationXchange’s employee portal can automate volunteer reporting and recruiting as well as help team members see the ways they’ve made a positive impact already.
Many budgeting experts will tell you that keeping your personal spending under control often starts with reining in fixed expenses like subscriptions and monthly bills. The long-term impacts of saving that money consistently add up and help to stretch your dollars further.
For companies, the same principle holds true. Find ways to reduce the fees you are paying for many of the software products and services you use will go a long way.
Tools like DonationXchange charge a simple setup fee and don’t add on fees for every donation payment processed through the software—instead, more of your money goes to helping the causes you and your employees care about.
Reduce Your Tax Burden
Corporate giving can be a strategic benefit on several fronts. It can bring positive PR exposure in your community, keep your employees engaged, and—what’s especially helpful during spikes in inflation—keep your tax burden lower. Consider using your corporate giving money to impact all three of these areas at once; through company matching, you can inspire your employees to give while also increasing the impact of the donations. The nonprofits you support will be grateful for the partnership and glad to highlight the generosity of the company and employees, and your team will feel connected to a bigger cause. DonationXchange can help with easy, automated company matching that streamlines that process and takes out much of the manual work for your team.
Cut Costs, Not Charity
Inflation can pose an existential threat to many companies, especially if you’re in an industry with low profit margins. By finding ways to cut costs and reduce many of the fees you pay, you can keep supporting the causes you and your employees care about while preserving your company’s bottom line.