Caring & sharing is good for business say top entrepreneurs from the likes of Made.com, MassChallenge, Founders Forum & SwiftKey.
A change is afoot. Business leaders have come together to change the way your business thinks about charity.
The idea is simple. New businesses who take the Pledge promise to give a minimum of 2% of their profit to good causes, and the Founders team can support them to help make their money go further.
“We launched MassChallenge in the depths of the recession to save the world,” said John Harthorne founder of the accelerator.
“What drove us into this big recession was just greed, short term profit extraction without actually creating long-term value,” he explained.
“When people are fighting over slices of pie and not enough people are making pie, you run out of pie. MassChallenge is about empowering the pie makers of society: it’s about making more pie.”
Making more pie may sound like an appetising option, but until now there hasn’t been enough support for startups looking to give back, said David Goldberg, Director of Founders Pledge, and CEO of Founders Forum For Good.
“We heard people saying ‘I just don’t have the time, I’m strapped for resources, and I have no support, how do I build a business with values?,” he explained. “There wasn’t a solution that allowed entrepreneurs to focus on growing a successful business and give back.”
“This innate desire to innovate and change and disrupt is what charity is really about in this age.”
“Businesses that take social responsibility seriously actually tend to do better than those that don’t,” he told The Memo.
“Young companies with a greater purpose see the benefit of recruiting better millennials, more rounded people, more ambitious people who want to make their own dent in the universe both at a company and beyond.”
As Harthorne reiterates:
“You just attract better people and they care more about your business when you’re ethically sound.”
Companies have so far pledged between 2% and 25%, with an average pledge of 4%. Cumulatively, their commitments are worth an impressive $70.1m.
You’ll already know of Swiftkey, the AI predictive text service who Microsoft bought last month for an impressive $250m.
“I had been really inspired by Bill Gates and the concept of using the wealth you accumulate during your lifetime to do good,” said founder Ben Medlock of his pledge.
“Founders Pledge connects people with causes that they feel an affinity to so they don’t just put cash in, but follow up with their pledges – that’s really valuable,” he explained.
Shoot founder Nicola Gammon, whose platform creates personalised gardening plans said the pledge appealed because she could commit even alongside her busy schedule.
“I’m so focused on trying to grow my own business there’s not a lot of time to be doing extra stuff,” Gammon explained. “But what was great about Founders Pledge is it made it very easy for me to have an impact.”
“It’s about not only doing something meaningful with your life and leaving a legacy but giving something back and being part of a community that’s trying to do good.”
One of the mentalities that Founder Pledge encourages is using scientific measurements to determine where your money will have the biggest benefits.
“The biggest impact is not just the saddest story, it’s about the longer term impact,” explains Harthorne. “It’s not about giving a sandwich and walking away, it’s about creating a method that ensures food for life.”
It’s something his pledgers are on board with.
“We do this when we build our startups: If we can apply the same thinking to how we do good in the world, we can amplify any good that is done.”
Giving away money based on impact means you might not always address the issues that are closest to you. But Harthorne says this shouldn’t devalue the wider effects: “There’s massive spillover impacts socially, economically, in the development and creation of jobs, in giving people opportunity and hope,” he explained.
For the pledgers, it’s also about balance.
“We’re obviously London-focused,” said Poulter of Pronto’s delivery area. “But at the end of the day, the fact someone might be 10 miles or 100 miles or 10,000 miles away doesn’t mean they deserve anything less than the person next door to you.”
“It’s human to balance those things,” added SwiftKey’s Medlock. “We should care about the people around us, and we probably will always biased somewhat towards those people, so it’s more important for us to consciously to bias towards the people who we don’t see.”
For the Founders Pledge, philanthropy could well be the gift that keeps giving, especially as it’s launched in London, described by Harthorne as “the most global city in the world”.
If every MassChallenge company gives just 2% back, that’s tens of millions that will be funnelled into charity.
Imagine if all every business threw their hat in the philanthropic ring. Are you giving your 2%?