Rise and Shine

How Startups Can and Should Be Philanthropic

How Startups Can and Should Be PhilanthropicStartups are facing a serious growth spurt thanks to the tech boom of the modern age. Bootstrapped or venture backed mini-companies are launching huge brands. Just look at Basecamp, or Dropbox, or any number of small scale operations that found themselves in the big leagues.

We have seen both the benefits and the drawbacks of this increase in success. For example, the living costs of residents in tech-heavy areas like Seattle, Portland, and San Francisco are skyrocketing. Mom and pop shops that were once a thriving part of a local community are shutting down in the wake of newcomers better equipped to handle the current generation’s needs. Things are changing.

This underlines the importance of social responsibility for startups making their way into the limelight. Where they were once outsiders, it is up to these companies to start integrating properly into the communities they are impacting.

As Tej Kohli, founder of Tej Kohli Foundation, puts it very well:

It’s through innovation and democratization where real philanthropy starts by pushing the boundaries of technology. Through sheer determination, ability and having the will to do it, we can now drive real change to real people and make a real difference in the lives of the masses.

What better way to do this than through philanthropic efforts?

The Importance Of Social Philanthropy

Too often the growth of startups are at the cost of the little guy. When this happens, the people who the service are meant to appeal to can become bitter and look for alternatives. We live in a time where the social responsibility of a company is just as important to the average millennial consumer as the product itself.

If you want to see how much of a concern this has become, you have only to look at the 1/1/1 Model constructed by Salesforce CEO Marc Benioff. It is a way for startups to become more philanthropic from the very beginning of their launch, while allowing their philanthropy to grow alongside their profits.

The 1/1/1 Model’s Philosophy

How it works is simple. You take a pledge to give 1% back to a community or philanthropic project of your choice. This could be 1% of personal equity, company equity, product and services, or time.

Within two days of making the pledge on their site, a representative from Salesforce.org contacts you to help you make that promise a reality. They will provide a blurb about you in their marketing materials, as a company taking part in their movement.

But you don’t have to pledge with their site to follow the same model of industry. You can give a percentage to any cause on your own, and help improve the world without their endorsement. Plenty of startups have established trusts, scholarships, charities, and more in order to help their fellow man, or the planet.

Other Charitable Options

Of course, the 1/1/1 Model isn’t the only route. A number of startups since the late 90’s have been establishing IPO-shares as set asides for charitable groups.

Still others set philanthropic goals that match projects for growth, making it a part of their business plan as important as profit generation itself.

Some startups connect with non-profits and give gifts of their products or services that can be distributed as the charity sees fit, running it through a third party that is more equipped for the task.

As you can see, you have plenty of options open to you. So consider the place of philanthropy in your company’s future.

Anna Fox

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