Every fall, Beau’s Brewing Co. turns the tiny town of Vankleek Hill, which is outside Ottawa, into a big Bavarian party with its annual Oktoberfest. The 2018 edition featured live music by rockers Sloan and plenty of beer. The weekend-long event raised more than $94,000, which the brewery donated to community groups.
“We developed a policy where we pretty much say yes to everyone, as long as it fits within our personal value set.”
Through this project and others, Beau’s, which generates about $30 million in annual revenue, donated more than $1 million over the last decade. The 150-employee microbrewery says it plans to give away another $5 million over the next 10 years. “We developed a policy where we pretty much say yes to everyone, as long as it fits within our personal value set,” says co-founder and CEO Steve Beauchesne. (Beau’s stays away from sponsoring events that don’t align with beer, such as motorsports and kids.)
The company gives to large charities, local hospitals and grassroots groups. This has helped the company maintain a positive public image, and while giving costs money, companies like Beau’s have found ways to do it that make financial sense.
Here’s how you can – and why you should – do the same with your business.
Giving is good for business
Companies often donate money because they want to help their local community, but Beauchesne also considers giving a key marketing strategy. “I could pay thousands of dollars for TV and radio ads and they would not be as impactful as a thoughtful donation to a grassroots group that people believe in,” he says.
Generous companies also appeal to prospective employees. “A lot of people come to us and say, ‘I believe in what you’re doing around community giving,’” says Beauchesne.
Giving is a “win-win for you and the charity,” says Regan Exner, a Regina-based regional managing partner with accounting firm MNP.
Reduce your taxable income
Companies, like individuals, can reduce taxation by donating to charity. How much depends on your situation – it’s a complex process, so talk to a financial professional. Your company can also donate stocks to a charity and avoid paying tax on the capital gains these investments have accumulated. Your business would get a charitable donation receipt for the full value of the asset.
Meanwhile, new rules come out from time to time from the federal and provincial governments that may offer additional tax breaks for charitable giving. “When you’re looking to make a donation, look at what kinds of tax incentives are out there. Governments are always putting out extra incentives,” says Exner. Consult with a financial professional to find out what’s new and if your gift matches the right criteria.
When it comes to the giving itself, companies can write cheques to organizations in need or find other creative ways to donate. For instance, Beau’s mostly sponsors events. An organization that hosts a fun run or charity concert will buy beer at wholesale and then sell it at their event. Beau’s then writes the organization a cheque for the same amount as the beer costs. “It’s a revenue stream offset by a donation stream,” says Beauchesne. “We don’t lose any money on it, but we don’t make any money on it.”
Since not every organization is a registered charity Beau’s doesn’t always get a charitable receipt. That’s OK, says Exner, because companies can often still deduct the donation as a company expense. Beau’s often counts its donation as a marketing cost.
Consider a foundation
Medium-sized companies that plan to give a lot, or even start running their own charitable projects, may consider setting up a foundation, which comes with tax breaks similar to making donations to registered charities, but with more flexibility around ways of doing good. It’s something Beau’s has considered. “I feel like at some point moving to a foundation will make sense, I’m just not sure when that will be,” says Beauchesne.
Setting up a foundation comes with costs: you typically incorporate a new company, create a mission, set up processes and put together a board. Meanwhile, a foundation is a long-term commitment. “It’s a one-way street. You can’t do it and then just change your mind,” says Exner.
Giving generously while keeping an eye on profits and taxes has worked well for Beau’s. Its employees and the communities it operates in are devoted to the brand, too. Says Beauchesne: “We believe beer tastes better when you feel good about drinking it.”