Benefits of Social and Community Investing

bigstock 218709745
bigstock 218709745

When used correctly, social and community investing can be valuable for growing your business. Social investing is the practice of investing in companies that fit with your personal beliefs, such as health-related companies or pet supply businesses. Similarly, if you are against smoking, you would probably not invest in any tobacco or cigarette companies. Community investing is the practice of spending time or money to improve the community in which your business is located. Examples of community investing would include volunteering time with groups like Habitat for Humanity or spending money to help improve the local schools. Social and community investing are not the best mechanisms for quickly growing a company financially, but they are still important to the life of a business.

Social investing is a long-term process. Depending on the type of company, there are different ways to follow the principles of social investing. The basic rule of thumb for social investing is to only invest in, do business and be associated with other groups doing the same. If your company does not take the time to research the other companies and individuals with whom you do business, it could come back to hurt you in the long run, especially when decisions are being made to do business with or invest in your company.

Community investing is a long-term investment in the public image of a business. This is a very valuable tool for small businesses, allowing them to compete with larger companies by becoming part of the fabric of their communities. Because community investing is about more than the amount of money being spent, it allows smaller businesses to use this as a way to contribute by donating their time. In showing up to help build houses and playgrounds, or participating in a walk, businesses can meet people in the local community and garner good will in that area. Also, many nonprofit and charity events have some sort of media coverage, which means the companies that sponsor or participate in events are often mentioned along with the event.

Social and community investing can go hand in hand to help grow a business. These are effective tools for businesses to grow their brand and provide goodwill. By investing in its community, a business has an opportunity to become ingrained in the community and compete with the other larger companies even though their pockets may not be as deep for investing purposes. An example of community investing is to sponsor local golf tournaments that help local organizations like veteran’s groups, local scholarship funds and local police departments. Generally, for a small donation to the event, companies can get their names included in the advertisements. Additionally, some of the items that are given away to all participants may even mention your company as a sponsor for the event. By investing in the community, consumers may view this company as more socially responsible, thereby making it a business that they are more likely to invest in and do business with in the future.

The important thing to remember is that community and social investing are not strategies to use for quick results for your business. Because they are long-term tactics to boost the image, brand and name identity of your company within the local community, they cannot be used to see immediate financial gain. Social and community investing are important parts of any business, regardless of how large or small it may be. A company that is active in its community will help it become part of the geographical area. When first starting out, a business may not have the funds available to donate but may be able to volunteer time to help out with community projects. Time is just as valuable as contributions in many cases and, in some situations, it is needed more than actual funds. However, as a business grows, it may have less time to devote to the community while it may be able to contribute more financially. The important thing to remember is that when a business becomes a part of the community, everyone wins.

About: Josh Simpson, Investment Advisor with Lake Advisory Group, brings a history of management experience with him to the financial field. Josh prides himself on his ability to work with people of many backgrounds in order to create the best possible plan for their unique situations. To contact Simpson, call 352-350-2008 or visit




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