As self-starters and problem-solvers, many entrepreneurs find it characteristic to extend their skills beyond building their businesses into charitable activities.
In fact, sixty one percent of entrepreneurs surveyed in a Fidelity Charitable study said that their entrepreneurial nature leads them to be more charitably inclined.
“There is the sentiment that (entrepreneurs) should help people, because they knew what it was like to be struggling as they were building their businesses,” said Sarah Libbey, president of Fidelity Charitable.
Libbey said she believes bringing personal values of philanthropy and incorporating them into the culture of a company, whether through financial donations or volunteer activities, also adds value for both a company and its employees.
Smart Business sat down with Libbey to discuss corporate philanthropy’s role in the business world.
Have you found that aligning themselves with a single cause that means something to the organization or to the employees of the organization can be tactful?
Not exactly, I would say that there are different schools of thought. Among some of the entrepreneurs I’ve spoken to recently, they have said that it can be a struggle to get the tight partnership team to all agree on one cause, so it might me better to empower employees.
… But certainly, then you find the companies that say it’s almost as if it’s an extension of a marketing budget — that it’s better to get the value of giving back locally to one organization and have that accrue to the personality and brand of the company in that local area.
How do you start to see the shift between the top down to the bottom up, the ability to attract and retain employees, through employee-driven philanthropy?
I think … it is very heartening for employees to know that, even though they are working hard and nose to the grindstone to make the company successful, it’s not all about being a money-making machine. To be part of a company that values having another impact outside of their strict business strategy is a great thing.
What other findings from the study would be significant? Do you see an increase in giving dollar wise?
Entrepreneurs on their own tend to give more than the average person over their lifetime. With respect to their companies, we found that they donated 3 percent of their company profits. The national average among large corporations is 1.5 percent, so that is a significant difference.
I’d say the other finding that loops back to what we started with in the beginning is that although 61 percent of them reported that they, as entrepreneurs, are charitably inclined, only 26 percent of them have built philanthropy into their business plan from the get-go. That is something that is a really important thing to think about when you’re starting a business.
So what are some of the first steps they should be considering?
Their corporate counsel needs to make sure their governing documents maintain flexibility for the eventual transfer of the stock for charity. That doesn’t mean they have to give up their control of the stock, but there are ways to have that appropriately written into their governing documents from the (start). That will allow them to maximize that resource, and that will potentially be their single best asset to donate for charitable purposes.
What is Fidelity Charitable doing to make it happen in the community?
We have over 50,000 donor accounts, and they have granted over $10.5 billion in the 20-year history of the gift fund. Those have reached over 135,000 nonprofit organizations in all 50 states, (and) some of our donors are granting overseas with us. The exciting thing that I am seeing is that donors are being more and more creative with how they fund their account. … Knowing that donors are very passionate about being committed to their causes and are creative about funding their accounts and their giving strategies is very heartening.
How to reach: Fidelity Charitable, www.charitablegift.org
