More and more businesses, including private lenders, are waking up to the benefits of aligning their mission with a deserving cause.

Cause marketing is a phrase you may have heard more often recently. That’s because more businesses are embracing it not only as part of their marketing and growth strategy but also as part of their quest to align with issues that are important to them.

When a company is engaged in cause marketing, it donates to a charity or charities it supports, generally based on a percentage of product sales. The charity receives the donation, and the business receives marketing exposure as their donation makes a positive impact on their local community or even the world.

Most large companies already have cause marketing in place; however, every business, no matter how small, can benefit from cause marketing, including private lenders.

Let’s take a look at cause marketing and how it can make a difference within your private lending business.

Growing Your Private Lending Business

How can cause marketing take your business to the next level?

Charitable giving is a way to build alliances with other organizations and to network with individuals who are potential clients. If you meet someone at a charity event that your business sponsors, you know their values are already aligned with yours. Now you can build both professional and personal rapport. The prospect may not become a client right away, but you can add the prospect to your database and also seek potential referrals from that prospect.

Another way to grow your business through cause marketing is to advertise on your website, social media, and other marketing materials that your business will donate a portion of every deal/transaction to a nonprofit, match any donation given by a client, or donate a percentage of the business’s annual revenue. Your support of certain causes may give you an edge over your competitors as prospects visit your site.

There are many ways to structure how your business gives to charity. You and your financial advisor should decide what works best for you.

Building Your Brand

How can cause marketing help to build your brand? Most charities will list you on their website as a corporate donor, share your company information on marketing materials, or tag your company on social media. Because many people donate based on emotion, when a charity shares a video, picture, or story about how your private lending business has positively impacted the people they serve, that kind of visibility and third-party shout out can only help your brand and business grow.

Another benefit of cause marketing is that people will get behind your business. According to a survey of more than 2,000 individuals Morning Consult conducted for Fortune, most of the time millennials and Gen Zers chose to do business with the companies that have a giving program in place over businesses that don’t. When your business supports a charity and helps with a need, it shows you care about making a difference in the world.

Additional Benefits for Private Lenders

As rates compress and private lenders find fewer and fewer differentiators from their competitors, cause marketing offers a powerful one-two punch:

1. You stand out. When rates and terms are nearly identical, borrowers will look for almost anything that makes the decision for them. Supporting your cause by borrowing with you earns your clients “warm and fuzzies,” turning what may have been a coin toss into a “well duh” moment.
2. Private lenders aren’t often looked at with automatic trust and goodwill. If you actively support a cause, it shows you care about more than closing the next loan—you’ll care about your borrowers too.

Include Cause Marketing in “Your Story”

When you talk about your business—whether it’s an elevator speech, at a conference, or on your website—having your “why” be about something that is not you is an attention-getter.

Incorporating the reason you selected a particular charity into your “why” can help you tell your story:

• Why did you choose the charity you support?
• Who or what cause does the charity serve?
• How do your donations benefit the charity?

When you share your story from the heart, you will inspire others to want to get on board and work with your business, because they know that when they support you, they also support the charity. Your story must be genuine and purpose-driven. If it is, your business will grow.

Supporting a charity also gives your employees a reason to talk about how and why your business gives back. It may also help you recruit employees who are aligned with your cause and want to work with you. That is why it is wise to get employee input on the charity you choose. Have a meeting and talk with your team about what is important to them. Doing so will help build a healthy culture and show you care about your employees as people.

Choosing the Right Charity

When choosing a nonprofit to support, make sure it is one you and your team are passionate about. If you, on a personal level, are passionate about the nonprofit’s cause, your marketing will reflect that and people will want to support your business even more.

Be sure to stick with one, maybe two, nonprofits at the most. A fun idea is to allow your clients to choose the one they want the donation to go toward. This can make them feel included and special too. And, they may share their positive experience with friends and family, helping you build your referral business.

How do go about finding a charity to begin with? Use the internet to type in keywords reflecting causes you and your team are passionate about, followed by the word “nonprofit.” Or, ask around. Maybe someone knows of a charity that would benefit from corporate sponsorship. Pick up the phone and call past clients or send them an email. You may find a charity and stir up some new business at the same time. Talk with family members, your spouse, or significant other.

Tax Benefits

Giving to a charity can have great financial benefits for your business. Supporting a charity allows your business to receive a charitable donation tax deduction.

Donations that are generally tax-deductible include sponsorships of charities or events, donations of inventory or services, and cash donations. Be sure to check with your tax advisor, attorney, or CPA. Another important tip is to make sure the charity of your choice is a nonprofit organization approved by the IRS. You can use the nonprofit search tool on the IRS website to ensure the “charity” you are considering is a true nonprofit.

As you can see, cause marketing is a good strategy to put into practice in your private lending business. Cause marketing can help grow your bottom line, and it’s a great feeling to know your business is leaving a lasting legacy as you make a positive difference in the world. What can be better than that?