Business Giving means corporate giving, for educational, charitable, scientific, and religious purposes. It may give of money, goods, or services by business to nonprofit organizations (NPOs).
Specific areas of giving, such as gifts, to education and art, are the appropriate functions. The federal government thought its income tax law has encouraged corporate giving for educational, charitable. Scientific and religious purposes corporations would have to pay taxes and then give gifts from the residue of net income.
(a) Investment: Business giving is frequently justified as an investment that benefits the business in the long run by improving that community. A gift to a hospital building fund is rationalized in this was because it should create better health in the community.
(b) Operating expenses: Another basis for giving a gift is to consider routine local ones as operating expense of doing business. Gift of this type are often through to provide public relations or advertising returns and are treated like any other public relating expenses.
(c) Supporting profit: Some of the gifts can be rationalized as supporting profit in the long run if not in the short run.
(d) Support philanthropy: As a citizen, it has a duty to support philanthropy without regard to its self-interest in the same way that a private person does. This philanthropic approach can open a Pandora’s Box of riving.
(e) Characteristics of taxes: Some corporate gifts take on the characteristics of taxes. Since it is the prevailing opinion that corporations should be good Citizens, helpful neighbors, and human institutions, the community comes close to imposing some types of gift giving on the corporation as a kind of unofficial tax.
(f) Acting as agent and trustee: Business is acting party as agent and trustee for the community receiving funds and distributing them according to community needs. Other reasons could be specified as –
- Public affairs.
- Advertising returns.
- Expanding market.
- Creating strong position.
- Improving image than competitors.
- Obedience to the business.