Rusty Tweed believes that companies should seriously consider creating scholarship programs. Here are 7 reasons why your company should start a scholarship program for deserving students in your community and around the country.
1. Name Recognition and Exposure
The first advantages given to a company that is involved in a charitable giving program such as a scholarship are name recognition and exposure. As students apply for and are awarded scholarships, a company gains more goodwill. Press releases and news articles announcing the scholarship, as well as articles about the winners, put your company in the public eye and reinforce that your company is doing the right thing for the community.
2. Reflecting Company and Personal Values
An important consideration for companies that wish to start scholarship programs is ensuring that the scholarship supports company values. It is ideal for a scholarship to match the field in which your company operates. For example, a publisher could begin a scholarship for students of English literature. A medical supplies company could start a scholarship for health fields or biological sciences.
You can also choose to have the scholarship match your personal values. For example, Rusty Tweed has begun a scholarship based on the ideal of drug free living. Having a values-based scholarship builds goodwill in the community and shows your dedication to making the world a better place.
3. Fostering a Well-Educated Employment Base
While the recipients of a corporate scholarship program may not work directly for your company in the future, any increase in the community education level benefits all local companies. A highly educated workforce is more productive.
4. Offering Scholarships Directly to Employees
Offering college scholarships to your employees is not generally tax deductible, but it is a significant factor in employee attraction and retention. For example, LINK Starbucks provides full scholarships to Arizona State University’s online programs for all of its employees working more than 20 hours per week.
Having a scholarship program can cut employee turnover rates, meaning that your company does not need to spend as much time hiring and training new employees to replace the ones who left. Some companies such as the health insurer Cigna were able to save $1.29 in recruiting and training costs for every $1 they spent on corporate scholarships for employees.
5. Boost Your Company’s Bottom Line
The goodwill created by a scholarship program will also advance your company’s profitability. This may be a slow process, but after you have awarded several scholarships, you will find that your name recognition has improved in the community. Name recognition means that consumers are more likely to choose your company when looking for a specific service, such as home repairs. This gives your company an advantage over competitors.
6. Colleges and Universities Promote Your Company
When corporate scholarships are awarded, colleges and universities keep track of which companies they came from. These companies, large or small, are recognized by the colleges and receive name recognition there.
7. Tax Advantages
Another significant benefit to the company is the tax advantage that comes from corporate giving, though this must be carefully managed and in accordance with all IRS rules and regulations. Again, corporate scholarship funds that largely benefit employees are not tax-deductible under most circumstances. Scholarships for students in the community can deduct significantly from your company’s tax liability.
In closing, corporate scholarships and other social responsibility programs provide a good return on the dollar for companies awarding them. Instituting even a small yearly scholarship for members of the community produces goodwill and promotes name recognition, which can have a large impact on a company’s bottom line. As customers recognize that your business has invested in the community through charitable giving, they will be more likely to want to patronize your company in the future.
Fostering an increase in the overall education level of local residents is good for all businesses in the community, making the workforce more productive and highly skilled. The tax advantages are significant, provided that a company does not use it as a benefit or incentive for its own employees. Even a scholarship for employees of your own business results in lower training and hiring costs, boosting profitability.
Rusty Tweed recommends starting a corporate scholarship and enjoying the benefits such a program can give to your company.