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Dealers Take Different Approaches When it Comes to Charity

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“He who wishes to secure the good of others,” Confucius said, “has already secured his own.”

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Such ancient Chinese wisdom has its place in the business world, along with the wealth of wise words spoken throughout the ages and across cultures about charity. Yes, it begins at home, but it can grow at a tire dealership. And while gaining from giving shouldn’t be the prime motivator to give, it’s a fact that as a company’s charity grows, so can its profits.  

It’s the simple law of karma: What goes around comes around, as effortlessly as a well-balanced tire.

“HAPPINESS NEVER DECREASES BY BEING SHARED” (Buddha)
No tire dealer knows that better than Barry Steinberg. As president and CEO of Direct Tire and Auto Service in Watertown, Mass., he has instituted an annual donation of more than $100,000 to charitable causes from his four stores. And even in the tough economy of the last two years, Steinberg says business has been “very, very good.”

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“I think what we do comes back to us,” says the man who founded Direct Tire 35 years ago. “I’m proud of everything we’ve been doing, and we’ve got to spread it around.

“It’s in my DNA,” he adds. “I’ve always given to charity. If you want to set yourself apart from everybody else, you’ve got to give to the community you’re in. You get a lot more business when you’re a philanthropic kind of dealership.”

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Steinberg’s philanthropy touches several causes. The biggest beneficiary is the Children’s Hospital of Boston, to which he donated a whopping $67,000 last year, followed by the Greater Boston Food Bank, to which he gave nearly $32,000. Smaller food banks in the communities of his four locations are each recipients of $500 from Direct Tire during the holiday season. And Steinberg regularly donates gift certificates to charitable silent auctions and even to an online marketer of such donations.

“What people like the most is when we give them gift certificates that they can auction off,” he says. “They range from $100 to $150, and last year we printed 200 of them for 200 different charities. If a person comes in with a gift certificate, it’s human nature that they’ll spend more than what the certificate is worth. That’s good because the charity gets the money, people spend more here, and it’s a no-brainer. It’s a win-win for everybody.”

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Paul Hyatt, president of Superior Tire and Auto in Toronto, also sees the good that his 10 dealerships do as coming back to him, though that’s not his reason for giving. Each of his stores has a budget for charitable donations that’s dispersed according to individual community need, with a total annual budget of more than $20,000.

“Hopefully, we get a return for our investment in the community,” he says. “But our main objective is to assist those who are more needful than ourselves. It’s great to know that we were able to give a helping hand to some group or person and perhaps make a difference in their lives.

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“I was a Little Brother for many years and will never forget the helping hands in my life,” he explains. “I consequently became a Big Brother in later years.”

Among the local recipients of Superior Tire’s donations are hospitals, high schools, charity runs, sports teams, churches, synagogues and community events. All of Hyatt’s stores also donate to Toy Mountain during the holidays to provide playthings to needy children.

Other financial donations are used to send students to the Canadian capital of Ottawa to watch Parliament in action, to assist the Canadian Red Cross with relief efforts in Haiti, and for the Second Harvest food bank.

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“Our approach has not changed in the last year or two,” Hyatt says of donating in a harsher business climate. “Obviously, there’s more need in these tougher times for some and, while our economy is facing tougher times, their needs become even tougher than ours.”

“While the economy is weak at the moment, we feel this is the time when charitable organizations need us most,” agrees Anthony Blackman, president of Atlantic Tire and Service in North Carolina. “I truly believe that a business should have a strong relationship with the community and charitable organizations in it.”  

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Atlantic Tire’s three locations – in Cary, Raleigh and Research Triangle Park – have highly localized charity focuses. Groups like Cary Visual Arts, which places artwork throughout that city, and The Carying Place, which helps Cary residents who have fallen on hard times due to job loss or divorce, are among the dealership’s beneficiaries. The arts group, in fact, has received more than $50,000 from Atlantic Tire since 2000.    

Besides the Boy Scouts and Rotary Club, Blackman’s other charitable causes include local churches, which receive about $1,000 annually from his company, primarily, he says, to help keep their vehicles maintained. But not all tire dealers are comfortable about associating with potentially divisive organizations, even those as seemingly innocent as churches.

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And that begs the question: To whom should – and shouldn’t – you give?
 
“EVERY GOOD ACT IS CHARITY” (Mohammed)
Ask the Better Business Bureau that question and the answer comes in four practical parts:

1) Choose your favorite causes and put your resources toward something that matters to you.
2) Research potential beneficiaries and beware of charity scams that may use donations toward operating costs and profits.
3) Donate to groups within a pre-established annual budget so you don’t feel guilty passing on some requests.
4) Toss repeat solicitations and don’t feel badly about accepting unsolicited “gifts” without making a donation.

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Ask Ed Perry the same question and his answer is a bit more blunt:

“Just don’t give money to socially charged or religious causes – and, if so, don’t publicize it,” warns the president of Arlington Auto and Tire in Poughkeepsie, N.Y. “We look to groups that are not tied to specific religions or causes or politics.”

Perry, whose charity of choice is the Children’s Home of Pough­keepsie, says that he prefers such a beneficiary not just to remain disassociated from issues of potential contention, but because he “avoids charities that give money to people who could improve their situation in some way. Children are totally innocent, so it was a charity I was comfortable with helping.

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“It’s a noble cause helping innocent individuals in poor circumstances,” explains the man who donates about $400 a year plus Nintendo Wii games to the institution. “It’s wholesome in nature. It’s just people in need of genuine help. There’s not much a child can do in those circumstances.”

While Perry’s choice may have been clear, many donors struggle with the variety of charities that make themselves known to potential givers. More than 60,000 new charities are forming each year, according to the BBB, with more than 1.6 million already in existence. So, competition for business dollars is intense.

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Such groups fall into the Internal Revenue Service-established categories of charitable, religious, scientific, educational, literary, prevention of cruelty to children or animals, fostering of national or international amateur sports, and testing for public safety. Donations to all but the last of these 501(c)(3) organizations are tax deductible.

 Adding to the mix are 501(c)(4) groups – civic organizations, local associations of employees and some volunteer fire departments among them – contributions to which are not tax deductible as charitable donations, though some may be deductible as business expenses.

And then there are a smattering of others – all 501-something-or-anothers – that do allow tax deductions for contributions under certain circumstances: veterans’ organizations if at least 90% of its members are vets; nonprofit cemetery companies if the contribution is for care of the cemetery as a whole; fraternal societies if the usage is deemed charitable, etc.

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The choices may be confusing for dealerships specifically seeking deductions – and, these days, such a consideration is viable. Being a tax-exempt organization doesn’t necessarily mean that donations to the group are tax deductible. While there are more than 20 Internal Revenue Code categories for tax-exempt organizations, contributions to only a few of them can be deducted from a donor’s federal income tax.

To Perry, being charitable in today’s economy can indeed be a challenge. He says his company’s donations have fallen as his own taxes have risen, and he even suggests that tire dealers contact their senators to complain that “government spending may cause you to cut programs.”

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While he says he “doesn’t take calls from solicitors,” and therefore selects his own charities rather than answering people’s requests, Perry has found other ways to help those in need.

“The Little League in Middle­town was broken into,” recalls Perry, who also donates to local charity car shows. “All the gear was stolen. We purchased new bats, gloves and other things so they were ready for the next game.”
 
“IN CHARITY THERE IS NO EXCESS” (Sir Francis Bacon)
At the opposite extreme, in terms of openness to solicitation, is Steinberg.

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“We hardly say no to anybody we get requests from,” he admits. “We get calls and letters all the time about sponsoring walks, mara­thons, Boy Scouts and Girl Scouts, teachers, golf tournaments, Little League. We’re finding customers are either writing, calling, e-mailing or coming in personally saying, ‘I’ve been a customer for so many years and we’re having this fundraiser for our church,’ or whatever.  

“If you’re out there and people know you donate money on a regular basis – any way you can, whether it’s $10 or $100 – people know they can approach you. Every owner should be approachable so people can ask you, ‘Are you willing to sponsor my kids’ Little League?’ These people walk in and thank us for helping a charity they feel good about, and it takes the edge off of their transaction.  

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“Because, face it,” he quips, “people equate going to tire dealerships with going to the dentist. This way, there’s no Novocain required.”

There are other indirect benefits of charity to the bottom line, as Steinberg has learned, beyond good customer relations and tax deductions. The press that a dealership can get from its charitable work, for example, can prove invaluable as well.

Steinberg says that his openness to virtually any charity has gotten him the kind of publicity that money can’t buy. “We’ve had a lot of press in the Boston Globe, like when we’ve donated 3% of our sales to a charity for a three-month period,” he says. “And it’s been all over the radio. When we do exit polling, asking people how they heard about us, they say, ‘We see you guys everywhere. It’s great what you did for the hospital or the food bank or for sponsoring the hockey team.’

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“We also support National Public Radio,” he adds. “We’re all over NPR.”

Meanwhile, Blackman says his company is just slightly more selective in picking beneficiaries. “The criteria that we use for determining our willingness to give to charities is very simple,” he says. “Who does it help? Is the organization reputable? And are we familiar with the organization’s staff? We don’t expect anything in return. We’re just satisfied that, through our blessings, we’re able to make a difference in others’ lives.”
 
“THE GREATEST OF THESE IS CHARITY” (Corinthians)
Charity, in the end, is charity, not a business strategy. But, as with other phenomena that show the correlation between what one puts out and what one takes in, countless tire dealerships have proven that charitable giving can be a natural and beneficial element of symbiosis in business.  

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“It does naturally evolve,” Stein­berg says.

And while the reasons for giving are varied and the motives diverse, securing the good of others, as Confucius said, does indeed secure one’s own – one way or another.

“We should always remember,” Hyatt says, “the helping hand that we each received throughout the years from people who generously gave their time, their guidance and help when needed. What a wonderful way for a payback.”  

“I think,” Steinberg adds, “that because we’re in the automotive business – which isn’t the shiniest one in terms of consumer trust – dealerships should know that if you shine some positive light on your business, it will come organically. Business will come through the door. It always has and it always will.”

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TIPS ON DEDUCTING CONTRIBUTIONS
 
1) Contributions and pledges are deductible for the year in which they’re actually paid.
 
2) The value of volunteering is not deductible, though expenses related to voluntary service usually are.
 
3) Contributions for which a donor receives a gift are deductible only for the portion that exceeds the gift’s value.
 
4) Donations must be made to qualified organizations, not directly to the needy, to be deductible.
 
5) Contributions to foreign organizations are not deductible except to those of Canada and U.S. possessions like Puerto Rico and the Virgin Islands.
 
6) Charity thrift-store donations are deductible for their fair market value if they’re not consignments.
 
7) Special rules apply to the donation of vehicles and gifts of appreciated property.
 
(Source: Better Business Bureau)

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