By: Joshua Finley
Nearly every corporate leader talks a big game about giving back to their communities or doing their part to make the world a better place. Most public companies publish ESG reports or similar documents detailing these initiatives.
In fact, it’s unusual — and, in some ways, a breath of fresh air — to encounter corporate leaders who speak frankly about not “doing their part.” Their excuse is often some variation of “we’re in the business of making money, not giving it away.”
Noted venture capital investor and philanthropist Steve Streit, who founded Patti’s Way and supports regional and national U.S. charities, is not one of those leaders. He not only talks the talk but walks the walk when it comes to supporting charitable causes. He’s also outspoken about why he does so.
“I’ve been very fortunate, and I see giving back to various causes I care about as simply the right thing to do,” he says.
That’s a straightforward, non-judgmental approach. And it hints at something many corporate leaders don’t realize: supporting good causes is not actually that difficult or expensive.
Here’s how folks like Streit and their peers often think about corporate and personal philanthropy.
1. It’s Part of a Triple Bottom Line Approach
The triple bottom line is a holistic accounting philosophy that considers not only the traditional financial motive but also “people” and “planet.” Basically, it’s a kinder, gentler approach to business as usual.
Philanthropy can fit into both the “people” and “planet” aspects of the triple bottom line, depending on which causes the company supports. Often, philanthropy that improves people’s lives improves planetary welfare as well, and vice versa.
2. It’s Good for Business
“Putting people and the planet at the heart of your business, on par with profits, isn’t just the right thing to do from a business integrity perspective,” says Kezia Farnham of Diligent. “There are also sound business benefits to the triple-bottom-line approach.”
In other words, companies follow the triple bottom line not only because it’s the right thing to do, but because it’s good for business. The benefits, Farnham says, include improved company culture, enhanced customer relationships, better business performance, and ultimately a superior investment proposition for external backers.
3. It Costs Less Than You Might Think
Corporate philanthropy is not free, of course. However, it may be less costly than assumed. Charitable contributions may be tax-deductible within certain limits, for example. Even more important, businesses that act in a convening or “bundling” role for other corporate givers may benefit from economies of scale, wherein their own contributions make up a relatively small proportion of the total giving for which they’re indirectly responsible.
4. It May Lend More Visibility to the Causes You Support
Charitable giving often creates — and benefits from — network effects. One poll found that people who volunteer are 11 times more likely to give money to charity, for example. This suggests that individuals and organizations can be “primed” for philanthropy when they see others doing the same or experience the process firsthand. So, by supporting specific causes and making no secret of the fact, you may encourage others to support them as well.
5. It Puts You in Good Company
Some of the world’s successful corporate leaders, founders and investors are all-in on transformative philanthropy. Many have signed up for the Giving Pledge, which obliges participants to give away 99% of their personal wealth during their lifetimes.
As early Giving Pledge signatory Warren Buffett famously said, that leaves participants heirs “enough money to do anything they want, but not enough that they don’t have to do anything.”
You might not have the kind of money Buffett or other prominent Giving Pledge signatories do — they include Bill Gates, among others — but you can still make a big impact on the world by giving most of your money away while you’re still on this earth.
6. It Could Lead to New Business Ideas
Philanthropy and business are not wholly separate activities. Nonprofits can innovate just as well as for-profit corporations, so working closely with charities may spark ideas that you can bring to your own endeavors. Even if it’s a simple process innovation, the benefits could be significant.
7. You Can’t Take It With You
You can pass assets on to the next generation, but you can’t take them with you. That realization led formerly skeptical philanthropists like Oracle founder Larry Ellison to sign onto the Giving Pledge after initially resisting. Might it make the difference for you?
Leave Your Mark on the World
One of the open secrets about philanthropy is that it often requires playing to donors’ sense of vanity. It’s normal to be motivated by the thought that you’ll be remembered for your generosity. And if that’s what finally gets you off the fence and compels you to think seriously about leaving a financial legacy for others, so be it.
Disclaimer: This article is for informational purposes only and does not constitute financial, legal, or tax advice. Readers should consult with their financial or legal advisors to understand how philanthropic activities may impact their specific financial situation.
Published by: Holy Minoza
