Can philanthropy really help startups grow?
The short answer is, yes.
But a more important question is how does it promote growth? This is exactly what I will teach you here.
Before we get into that, it is important to understand this…
Philanthropy isn’t about writing checks.
Although synonymous with donating money, philanthropy is not just about writing checks and donating them to charitable organizations and causes.
While that is a part of philanthropy, it does not stop there.
When it comes to philanthropy, there are numerous ways you can give back. For example:
- Donate your time by volunteering at nonprofits, like soup kitchens or food banks.
- Donate your expertise (nonprofits need more help than just money).
- Donate your possessions, like clothing, books, or CDs.
Now that you have a clearer understanding of what philanthropy truly is, let’s talk about why philanthropy has a positive influence on startup growth.
Philanthropy jumpstarts startup growth by providing purpose.
Purpose. An extremely underrated word.
Purpose gives people meaning. And when they have meaning in their lives, remarkable things happen.
Purpose is what kept Steve Jobs pushing forward even when he was ousted from Apple in 1985.
Purpose is the fuel that drives (no pun intended) Elon Musk to push the boundaries of innovation and tackle seemingly impossible things.
What does this have to do with a startup’s growth? It is simple.
Employees, a company’s greatest asset, want purpose. They want to feel that their hard work is for something more than dollar signs on a revenue sheet. This is especially true for the millennial generation.
In a survey of over 12,000 millennials, Telefonica found that 62% of millennials believe they can make a local difference. And 40% said they believe they could make a global difference.
In a time where more millennials are entering the workforce, they believe in making an impact. And they want to join companies that have that same mentality baked into the culture’s DNA.
That is a key reason why companies like Google (ahem, Alphabet), Facebook, and Salesforce attract and retain talented employees (It is important to note that all three companies have created philanthropic arms: Google.org, Internet.org, and the Salesforce Foundation).
Not only do they make products that change lives, the companies are socially conscious and fully understand the responsibility that businesses have to their communities.
But purpose is not the only thing philanthropy brings to the table.
A healthy workforce is a productive workforce.
A study conducted by UnitedHealth Group in 2013 found that people felt better emotionally, mentally, and physically after volunteering.
Imagine having an environment where employees feel healthy in mind, body, and spirit. How much more productive could they be?
From a business standpoint, if your employees feel great, they are in a position to add more value.
Philanthropy does not stop there. It is the gift that continues to give.
Philanthropy is good for business.
Research by Edelman finds that 68% of consumers would stay loyal to a brand if it supported social causes in a time of recession.
The research goes on to state that 76% of consumers like buying from or evangelizing a brand that makes donations to worthy causes.
That is a primary reason why a company like TOMS is in the position it is in now. Do you think TOMS Shoes would be as popular as they are if they did not have a social cause wrapped around the brand?
The point here is that people care about how businesses add value to society beyond their products or services more than you realize.
And as an entrepreneur, aspiring or seasoned, you should too.
No matter what type of company you start, there are endless ways to give back. You just have to get creative. And more importantly, make an effort.
Successful companies embrace and act upon the philanthropic mindset.
Now that we have discussed the benefits of philanthropy and how it affects a startup’s growth, let’s cover a couple companies that embrace the philanthropic mindset.
Salesforce: philanthropy is in its roots.
What if I told you Salesforce, a billion dollar company, has been involved in philanthropic activities since the founding of the company? Would you believe me?
It is true.
In the early days of Salesforce, Co-founder and CEO, Marc Benioff, not only wanted to create a sustainable business, but also one that made a difference in the community.
That is when the 1-1-1 model was created.
The 1-1-1 model is a pledge that companies take. In doing so, they pledge to donate:
1% of their product, 1% of their equity, and 1% of their employee’s time.
The donations go towards nonprofits and charitable organizations.
But Salesforce didn’t stop there. They went on to create the Salesforce Foundation, which recently surpassed over one million hours of total employee volunteer time.
That is impressive.
Clearly, a company can make profits and do good in the world. It does not have to be an either/or.
Zendesk: philanthropy feeds daily activities.
Zendesk, creator of the popular cloud-based customer support platform, did something on the day of its IPO that many companies would not even think of doing.
On the day of the IPO announcement, instead of popping champagne (I an sure they did this at some point that day), Zendesk went outside their office and cleaned the neighborhood.
Ladies and gentlemen, this is a company that understands the bigger picture.
On top of that, Zendesk is consistently in the community making a difference. More companies need to follow in their footsteps.
Keep thoughts and actions in mind at your startup.
There is more to philanthropy than donating money.
Getting your team involved in the community gives everyone a sense of purpose, and helps attract and retain employees.
Volunteering is good for the mind, body, and soul.
Philanthropy can drive real business results.
Companies can make profits and do good.
Every startup wants to grow, and reach a level of success that puts it in the conversation with the likes of Apple, Virgin, and Salesforce.
There is more to business than selling products and services. And as you have read here, philanthropy affects growth in a variety of ways; it is not hard to get involved.
The startup community loves to throw around the mantra, “Change the world.” Well, if you really want to change the world, start caring about it.
Image credit: CC by Gerry Dincher