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The Breaking Barriers Issue August 2022

Why a founder’s commitment must drive DE&I — and how to build systems for meaningful change

Why a founder’s commitment must drive DE&I — and how to build systems for meaningful change

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The founder’s guide to impactful philanthropy at all stages of growth

Founder's Guide to Philanthropy

From starting your company’s first philanthropy program to deciding how you’ll donate your earnings post-IPO, the experts in this in-depth guide share tips on how to do the most good while you grow.

    The traits that make someone a successful founder — being solutions-oriented, a forward-thinker, empathetic, and willing to roll up their sleeves to get the job done — are the same ones that make a committed philanthropist.

    That’s why it’s not so surprising that, compared to non-entrepreneurs, entrepreneurs are reported to volunteer more frequently, be more likely to include philanthropy as part of their identity, and value the impact of volunteering and charitable giving on their professional growth and career success.

    A founder’s philanthropy journey can be long and varied, and it can look quite different at all stages of company growth and individual success. It might also take a variety of forms: partnering with nonprofits, setting up employee matching programs and volunteer opportunities, or getting involved personally in philanthropic causes.

    If you haven’t started on your own journey yet, it’s always a good time to get going (regardless of your company’s stage or headcount). If you’re well on your way to integrating philanthropy into your life and work, you can always improve the experience for your employees and start planning ahead for what’s next. And if you’re a founder who’s already cracked the code of corporate philanthropy within your business and you’re looking to leverage your success to make an even greater impact on a more individual basis, skip ahead to the second half of this guide.

    First, we’ll dig into how founders and companies — even (and especially) small and medium-sized businesses (SMBs) — can craft impactful philanthropy programs that empower employees to give back. Then we’ll switch gears to share expert advice on how later-stage entrepreneurs can take a more proactive approach to impactful philanthropy and maximize impact as their personal and professional success grows.


    Philanthropy is for all founders at companies of all sizes

    It’s no secret that, in addition to the obvious benefit of making a positive impact on the planet and your community, building philanthropy into your company’s DNA is much more than just a competitive advantage. It’s an absolute must when it comes to branding your company (and yourself as a founder) and attracting, engaging, and retaining both employees and customers.

    Our first featured expert has seen adoption of corporate philanthropy at smaller companies skyrocket over the past few years, which is a great thing for the world — and his business. Josh Driver is the founder and CEO of Selflessly, an out-of-the-box giving and volunteering software platform that makes it easy for SMBs to set up and customize their in-house corporate social responsibility (CSR) efforts.

    “When we first started building this company, investors were more of the mindset that philanthropy was a vanity metric — a nice-to-have, not a need-to-have,” Josh reflected. “Now we're seeing companies getting started as an LLC on a Monday and then reaching out to sign up with us on Friday, because they want to start a CSR program at the ground level.”

    From childhood all the way through his first few nonprofit jobs, Josh said he was always “hardwired to volunteer.” But when he made a career jump into the tech sector, he started to see how painful corporate philanthropy was — not just for the companies implementing programs, but for nonprofits on the other side, too. He looked into software that might be able to help, and it was all expensive, inefficient, or geared toward Fortune 500 companies.

    So Josh built and launched Selflessly — Indiana’s first Certified B Corp and Domestic Benefit Corporation — with the goal of creating an equal playing field in corporate philanthropy, which he firmly believes shouldn’t just be enjoyed by larger companies. “We think there's so much value in SMBs that want to give back — they just need the tools to be able to do it,” he said.


    Five tips for founders and SMBs building an authentic philanthropy program

    We asked Josh and the Selflessly team to share their best advice for how founders and SMBs can kickstart, improve, or grow a philanthropy program that makes an impact and empowers employees. Here’s their advice.


    1. Make it personal

    Customization at the employee level is at the heart of any successful SMB philanthropy strategy. The first step is making a clear distinction between whole-company initiatives — an ongoing nonprofit partnership, for example — and empowering employees to give back in meaningful ways individually.

    In addition to (or instead of, if funds are limited) deciding where your company will make a one-time or recurring donation, give each employee a share of the money to donate to the causes most personally meaningful to them. In one example Josh provided, OnBoard, a board management software company, immediately gives every employee $50 when they sign up for Selflessly to donate to any nonprofit they’d like. They’re able to jump in and get involved on day one.

    Also, try to avoid making all company volunteer days or “days of service” the same — offer a choice of activities, or leave the volunteer time off open-ended so employees can decide how they’ll spend it.

    “We were finding that a lot of the volunteer programs set up by companies were too limiting or prescriptive,” Josh shared. “There’s a place for company events, but a company shouldn’t be defining what an employee’s purpose is — that’s for them to decide.”

    A smart move is to survey your employees about what they care about and what their expectations are for their employer’s involvement. A more personalized, homegrown approach always creates higher participation and fosters a more authentic philanthropy culture. Plus, it takes the pressure off of founders and executive teams to decide which organizations they’ll partner with or support. As Josh said, “99.9% of the time, the employees will bring the best organizations to you!”


    2. Lean into the type of philanthropist you are

    Some people are check writers — maybe you’d rather give back with dollars and not be out on a Saturday picking up trash in the community park. Maybe you love the in-person volunteering experience. If there’s a cause you’re especially connected to, you may choose to become a board member at a nonprofit or foundation in that space.

    Once you identify your preferred way to give back, embrace it — and know that your favorite form of philanthropy could differ from those on your team and throughout your company. That’s OK! All types of philanthropists are vital to a thriving philanthropy culture.

    By offering a wide range of ways for your colleagues to give back, you’re empowering them to lean into their philanthropy types, too. In-person events that require physical labor can be challenging for employees with disabilities, and workplace giving programs that center around monetary donations aren’t always inclusive or realistic for everyone in the office. Combine opportunities to donate money with opportunities to donate time and skills, too. 


    3. Be flexible

    According to Josh, an SMB philanthropy program moves from strategic (and at times, disingenuous) to authentic when you prioritize being flexible around what’s happening both within your company and in the world around you. In addition to any longer-term, ongoing initiatives you’re working on, leave room to be nimble.

    It’s easy for employees and customers to spot hollow statements from founders — especially when it comes to important issues like social justice and climate change. They’re more interested in the action you’re taking to address the issue. For that reason, the Selflessly team recommends against planning an SMB philanthropy program more than a year out.

    “Don’t be so rigid that you can’t react,” Josh said. “Corporate philanthropy is becoming more and more influenced by public policy, current events, and the media.”

    Plus, external factors may impact your company’s ability to execute on a philanthropy plan — and it’s important to be prepared for pivots. If matching donations are going to stretch the budget during a financially challenging time, switch gears to a day of volunteering.


    4. Do it the right way, for the right reasons

    If you jump into a philanthropy program too soon out of fear you’ll lose employees by not having one, Josh put it bluntly: “I promise you it will fall flat on its face.” Integrating philanthropy into your business doesn’t fix toxic work environments or distract from other internal issues. But with some planning, a focus on inclusivity, leadership buy-in, and employee input — you can do a lot of good, internally and externally.

    Be careful not to turn a philanthropy program into a project for just your human resources team. If you have more than 50 employees, Selflessly suggests forming an employee-led philanthropy committee across departments. Employee advocates who understand the culture and community at your company can help curate events around a specific day or month (e.g., Pride Month, Indigenous Peoples Day) and have ongoing conversations across teams to determine which causes stakeholders care most about. 

    Finally, as a founder, your support for your company’s philanthropic strategy and efforts is invaluable. Employees can quickly suss out what Josh calls a “box-checker program,” thrown together without purpose or intention from company leadership. On the flip side, engaging with your teams through philanthropy can boost morale across the entire organization.

    “One of the most massive changes we’ve seen within the culture of companies we work with is an increase in employees’ respect toward leadership,” Josh told us.


    5. Rely on tools, communities, and resources

    A founder’s inclination toward generosity and building a business with ethical frameworks in mind can be incorporated from day one — even if you’re a small business or a scrappy, early-stage startup that can’t always give away its hard-earned investment to charity. Set the tone early on that you’re building a company that cares about its impact on the world.

    Outside of launching or improving your company’s philanthropy program, there are plenty of other ways to get started — or keep moving — on your journey to making a greater societal impact as a founder. Here are just a few places to start:

    • Begin the process of becoming a certified B Corporation to further codify your commitment to the planet and its people, and apply that commitment to how your business is structured.

    • Join thousands of other entrepreneurs around the world and pledge 1% of your profit, product, equity, and/or time to a charity of your choice.

    • Use resources like Charity Navigator and GiveWell to maximize the impact of your charitable giving and partnerships, and stay up to date on the latest research in the world of philanthropy.

    • Work with partners like Selflessly and Realized Worth Institute to streamline your employee giving and volunteering programs for more efficiencies internally and more impact externally. Beyond their services, each of these organizations’ blogs offer a treasure trove of insights on corporate philanthropy and giving trends.

    We're seeing companies getting started as an LLC on a Monday and reaching out to sign up with us on Friday, because they want to start a philanthropy program at the ground level.
    Josh DriverFounder & CEO of Selflessly

    As your company and success grow, so can your impact

    If you’ve got the previous section of this guide covered and you’re the founder of a company in Series B round or later, it might be time to start thinking about leveraging your success to make a deeper philanthropic impact.

    For insight into what meaningful philanthropy looks like at this stage, we spoke to Danielle Gram, Managing Director at Founders Pledge, a community of entrepreneurs committed to high-impact, evidence-based philanthropy. With roughly three in 10 founders planning to exit their businesses in the near future, Founders Pledge encourages them to become more informed philanthropists and support the causes they care about by pledging a percentage of their personal proceeds to charity.

    Beyond the pledge itself, Founders Pledge offers an array of other ways to get involved in philanthropy — including their Equity for Impact program (launched in partnership with Airbnb alumni), to help employees make commitments to impactfully give around an IPO. They’ve also launched a new fund structure that centers on collaborative giving. Active community members can come together around a single issue, like climate change, to learn together and pool their funding.

    After founding her first nonprofit at age 16 (which grew into a successful global organization), Danielle spent the majority of her early career focused on nonprofits and humanitarian work in East Africa and the Middle East. Time and again, she saw instances in which donors had great intentions, but the programs they were funding weren’t actually implemented effectively enough to change lives in meaningful ways on the ground.

    When she joined Founders Pledge three years ago, it was still a young organization — but they already had a proven model of connecting founders who wanted to give back and supporting them with educational content, a thriving community, and an emphasis on research-driven philanthropy. In its seven-year lifespan, Founders Pledge has grown to 1,700 members who have pledged more than $7 billion to high-impact charities.

    Regardless of whether you choose to join an initiative like Founders Pledge, the following advice from Danielle and her team will help set you up for the most impactful next step on your journey as a philanthropy-focused founder.


    Five tips for later-stage founders looking to maximize individual impact


    1. Lean on the broader founder community

    The power of community as a resource is something we write about often at In the Works, and it’s just as powerful as it relates to philanthropy. When founders choose to share about their own philanthropy journeys, it empowers and inspires others and ultimately leads to deeper and more widespread impact.

    One of the most crucial benefits of Founders Pledge membership is its community focus. The Founders Pledge team fosters community through events that range from small retreats to larger-scale forums. They bring in outside experts and connect similar-stage companies and founders with shared interests.

    “There is definitely a multiplier effect,” Danielle said. “All of our growth comes from our members sharing what they've done — which means not only will more money go to charity, but it can be done in a way that generates more good for the world.”

    Of course, you don’t have to join a formal community to be a part of that multiplier effect as a founder. Sometimes it’s as simple as being transparent about your philanthropy goals, openly sharing what you’re learning along the way, and engaging with other philanthropy-minded founders.


    2. Separate personal and business giving

    Though both are important and have their own place, Danielle advises founders to think differently about their personal and business giving priorities. When you're stewarding your company's assets and acting on behalf of a broader team, it makes more sense to take the company's specific purpose into account and align your giving with that mission. That might mean supporting an initiative or taking on a cause locally that matters to your community and your workforce.

    On the personal side of philanthropy, where Founders Pledge is focused, there are very few restrictions on how far a founder can go in terms of making an impact. When you don’t have to stick closely to a cause that’s mission-aligned with your company or limit your cause to one geographic location, you can focus more on the highest-impact interventions across the globe — and have at it. 


    3. Evaluate your motivations and educate yourself

    If you begin your philanthropy journey by looking inward at why you’re interested in a particular issue, it will help open your eyes to more effective and impactful solutions in the long run. Zoom out and think about your values — and why you care about the issues you care about.

    “The interesting thing about giving is that it can be a very emotional thing,” Danielle said. “The experience is influenced by a whole variety of factors about how you've lived your life: What were your experiences growing up? What was the culture around giving in your house? What different life experiences have you been exposed to?”

    Once you get to the bottom of your motivations for giving, the charities and solutions that align best might look different than you thought. For example, a founder might say they want to support an after-school STEM program because it was access to STEM education that set them up for success in their own lives. But if their core goal is increasing access to education and opportunity for more kids, research shows that the most impactful way to do so is actually by supporting public health initiatives, like deworming children, for instance.

    That doesn’t mean supporting an after-school STEM program won’t make an important impact — it will. But understanding your deeper motivations and core goals will introduce you to additional ways to make the impact you seek in even further-reaching ways. And, no matter the cause or the scale of it, everyone can become a more informed philanthropist. You can always evaluate two community programs in your neighborhood that have a similar mission to determine which one is doing the most good.

    Another important part of educating yourself is finding out which organizations and causes already exist to address the issue you care about. One of the mistakes founders make when it comes to giving back, Danielle said, is forgetting that there’s a centuries-long history of philanthropy — both in the U.S. and globally. Take the time to learn from what's been tried, what's worked, and what hasn't.

    As a philanthropic founder, you might also have to resist the entrepreneurial urge to create something. Often, you don’t have to reinvent the wheel — but you can help make the wheel faster and more efficient.

    “Within our community, people are really thoughtful about what's missing, what's neglected, what isn't being done — and sometimes assume that means something has to be created,” Danielle said of the entrepreneurs she advises at Founders Pledge. “But there are 1.5 million charities in the U.S. alone, and there's a very good chance that we don't need another one to address an issue.”

    A better use of a founder’s time might be serving on a nonprofit or charity board. Instead of starting from scratch, find the most impactful charities already tackling the issues you’re interested in, and support their growth and development to help them do even more good.


    4. For maximum impact, focus on the long term

    Taking a longer-term approach to how you think about investing your resources — in areas like pandemic preparedness, global poverty, or fighting biosecurity threats and climate change, for example — will likely yield the greatest impact. That’s why Founders Pledge focuses its research on the potential impact of solving long-term existential threats far into the future.

    Many philanthropic donations, while still important, might not move the needle all that much. Founders Pledge and their research partners — like GiveWell, Schmidt Futures, and the Gates Foundation to name a few — aim to find the outlier cases in which there is real, dramatic change happening in people’s lives as a result of donor investment. They call them the “unicorns of the charity world,” but unlike the high-valuation tech unicorns founders are used to hearing about, these unicorns measure ROI in long-term impact.

    Choosing where to focus your time and investment is tough — and you don’t have to do it all at once or put all your resources in one place. Many philanthropic founders take a portfolio approach to giving, which Founders Pledge encourages. Decide which portion of your giving you want to reserve for friends- and family-related causes, which portion you want to give to addressing issues in your local community, and which portion you’re willing to commit to more global, longer-term solutions.

    Occasionally, a founder or philanthropist might gravitate toward one longer-term issue and choose to get involved at scale, becoming an expert in the particular area. Sometimes it becomes more of a lifestyle than an interest, and several Founders Pledge members have gone on to found businesses or nonprofits to address their issue of choice — while staying active in the Founders Pledge community to share what they’re doing and learning.

    “We realized early on that philanthropy is a pretty small part of the life experience of our members,” Danielle said. “Their impact can extend far beyond just their own philanthropic giving — they get involved in policy, run for office, and found nonprofits or for-profit companies that tackle important social issues.”


    5. Make a commitment and be accountable

    Making a commitment as early as you’re ready to, whether it’s through a pledge or another mechanism, is crucially important. Regardless of the stage of growth you’re currently in, take a moment to truly reflect on how much you want to give — whether it’s your time, resources (in a dollar amount or a percentage), or both.

    Danielle said the planning aspect of a pledge really helps founders: “I think most founders who take our pledge have at some point thought, ‘If I do well, I'd love to be able to give.’ The pledge really makes them think about what they mean by that,” she said. “We are able to hold them to their intention. And what most often happens is our members actually want to increase beyond their original pledge as their companies grow, especially if they've had a tremendous outcome like an IPO.”

    Not only does a binding pledge or public commitment hold you accountable within your community, it also shows you’re taking philanthropy seriously from the start, and it’s not just lip service.

    No matter what stage or size, just get started

    While an increasing number of entrepreneurs are focusing on their societal impact, there’s still plenty of room for improvement, especially in the tech sector. A report from Open Impact found that on average, it took most people 10 years after a wealth event (like an IPO) before they started getting involved in philanthropy.

    Both experts featured in this guide advocate for this small-but-mighty rule of thumb: Just get started. From Josh’s perspective, you can’t use your company size as an excuse anymore. “Every company, no matter what size, can give back in some way,” he said. “It doesn't need to be a big ceremony with a 10-foot check. It doesn't have to be a named highway. But everyone has the means to start doing something.” 

    Danielle has similar advice for founders at later stages of growth, too: “Even if it’s making your first, small donation within a year of liquidity, put your toe in the water and start to learn which issues you’re interested in,” she suggested. “It doesn’t have to be stressful — it's not all or nothing. Just get started.”

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    Written, recorded, and designed by doers & makers © 2022 In the Works