We have been told that our company, McDaniel Knutson Financial Partners, would be more valuable if we did not give so much away. We have also been told we would make more money if we were not so generous. Maybe. I actually do not believe that, but even if true, it makes no difference to us.
Wait. Did I say I do not believe that? Is it not a matter of simple math? If you give less, you have more money in your pocket, you have increased profits and the value of your company, right? Not necessarily, but I will return to that in a moment.
First, Why?
Some companies give to appear like good community partners. Giving for us is not a matter of community image. In fact, when we first started this policy, we struggled when we did receive recognition. We do not give to impress anyone or to get something in return. We don’t give for the tax benefits either. We give to people and organizations we believe in, that we believe make a difference.
We give out of principle. We give because we have been blessed and believe that part of the reason, we have been blessed is so we can bless others, particularly those less fortunate than us.
We give to help avoid greed. In the business world, it is so easy to become focused on making more and more and becoming self-focused. Generosity is a way of taking the attention off of ourselves and our own interests.
We give because we believe that is what God is like. We believe that God generously gives of himself to us and asks for us to do likewise. Because we have been blessed, we are to bless others.
We give off the top and not the bottom. What does that mean? Most companies give a percentage of their profit. For example, if they gross $1,000,000, they may have $100,000 of profit. If they give 10% of their profit, they give $10,000. We give 5% of our gross revenue, so under the same scenario, we would give away $50,000, or 50% of our profit.
Why do we do that? For one thing, it is very easy to manipulate the expenses and reduce profit, if you want to (like for tax reasons). Take more income and you have less profit. By taking it off the top, we cannot manipulate the amount. Furthermore, by making it a percentage, as our revenue goes up, so to does our philanthropy – automatically. No discussion about “can we afford it.” It is what it is.
Returning to the math question earlier. While we do not give to get, we know by experience that some people like to do business with businesses that are generous and who care. We have not done any statistical analysis, nor do we even have the statistics to do so, but I believe that our generosity has resulted in additional business that more than exceeds what we give. That is why I do not believe it hurts either our income or business valuation to give so much away. Again, we do not do it for this purpose. But, Jesus said, “Give and it shall be given to you, pressed down and overflowing.” We have experienced this.
One last point. Sometimes giving should be done in private and anonymously. And, we do that a lot. However, there are times in which it should be public. Jesus also said, “Let your light shine that people might see your good works and glorify God.” To the degree that we are public about our giving, it is to inspire and encourage others to be more generous.
This post was written by Wayne McDaniel, Chief Financial Officer of McDaniel Knutson Financial Partners. He and his wife Jude are generous donors and champions for Insight Women’s Center‘s mission and work.