Entrepreneurs Give More Time and Money to Charitable Causes

Why am I not surprised?

Entrepreneurs – CEOs/founders of businesses – believe that philanthropy makes their companies more successful, according to a report just released by the Fidelity Gift Fund.

charitable giving, entrepreneurs, nonprofits, small business ownersMore than 60 percent of those surveyed held this belief and about 26 percent built “giving back” into their business plans. What’s more, the report found that:

  • Nearly 70 percent did not wait for “success” to give back, noting they believed in supporting charities while building out the business.
  • The majority (62 percent) of entrepreneurs report that they want their company to be recognized for its work with charities.
  • More than four-in-10 (43 percent) believe corporate philanthropy helps attract and retain employee talent.
  • Nearly three-in-10 (29 percent) indicate that they made grants to specific charities based on how the cause aligns with their company’s business mission.

These were not fresh-faced, just-out-of-school idealists in technology companies. On average, those responding were 58 years old, in business for 27 years, with revenue of $325 million and included companies in real estate, health care, construction, manufacturing, and banking as well as communications and technology.

And they donated, on average, twice the percentage of profits to charity as the America’s largest companies. Ninety percent donate time and expertise in addition to money. They are more likely to encourage employees to give time and money.

Their reasons for giving leaned heavily toward knowing what it is like to struggle and being grateful for the help they’d received along the way.

Which is why I am not surprised. Being an entrepreneur is not an easy job. It’s hard work that requires a lot of personal sacrifice, and a lot of support from friends, family and those you can convert to believers in your project. It usually means engaging directly with customers and employees in the early days when the business owner may actually be the only employee. It means wearing many hats.

Kind of like being a nonprofit leader, isn’t it? Maybe that’s where their empathy comes from.

While recognizing the benefits to their business, most entrepreneurs said they give because it’s the right thing to do according to their experience and their upbringing. Most select their beneficiaries based on the recommendations of friends and family. Most select charities that have local impact.

Let’s run that last bit by again: personal recommendations, local impact.

What does that mean to nonprofits? It may mean that thinking big isn’t the best idea. Maybe thinking “local” and “privately owned” is a better idea.

A local private company may be more willing than a corporate outlet to give money, provide in-kind services, or serve on your board. According to the report, founders of companies are more open to innovative giving ideas as well, such as letting employees off work to help with a project.

Who knows what new resources you may be able to tap if you sit down with an entrepreneur and ask “How can we … ?” You may well get entrepreneurial, innovative ideas as well as the funds to implement them.

Has your nonprofit benefited from building a relationship with a local company? 

Finding local entrepreneurs

This was a very interesting article, thank you. I'm curious, however, about the "local" concept and whether it would work if you don't really have a "local" place. Our organization doesn't have a core area in which we work, so "local" is a little hard to define. We are a pen pal program for Iranian and American students, so our participants come from all over the U.S. We do have families participating, so that gives us 2 or 3 participants in a particular town, and a club at a high school in Santa Barbara is participating, and they have about 15 members who had been matched with pen pals. I guess those are our only "local" areas--places with more than 1 participant. This makes it a little difficult because, from the way I'm thinking, at least, we can't present an entrepreneur with a "This will help Boston because..." argument.
I'm also just curious about where one would find these entrepreneurs in general. Just through recommendations? Or are there other methods of finding them?
Thanks again for the article.

Unique situation

Yours is a unique situation. I'd think that entrepreneurs who either do business in the Middle East or have roots there might be interested in a program that promotes cross-cultural understanding. Or a service club that works internationally, such as the Rotary, might find your organization worth supporting.  The best method of finding them is talking with your staff and your students: Brainstorm. And look on the Internet for similar organizations; then get in touch. Maybe you can collaborate on fundraising.