The movement to reimagine the social purpose of business is accelerating at lightning speed, spinning off a renaissance of entrepreneurship that’s exhilarating to behold. This wave of corporate creativity for good is transforming the relationship that businesses have with their communities and the possibilities for real change.
As entrenched issues such as income inequality slog on – much discussed yet under-addressed in Washington, a new generation of businesses is filling the leadership vacuum by building philanthropy directly into their founding missions. For this innovative breed of companies, giving back is not optional or half-hearted; creating sustainable and measurable impact is as core to their definition of success as a high return to their shareholders.
San Francisco is a particular hotbed of this socially responsible mindset. Many of the world’s leading innovators call the Bay Area home, but their staggering success has come at a cost. As the city now tops the list of most expensive in the country, it’s become exceedingly difficult for the middle class to eke out an existence, and the ranks of the poor and homeless have swelled. This change has warped the relationship that the city’s leading companies have with the community, creating a starkly classist hierarchy of haves and have-nots and fueling bitter resentments.
Fortunately, the innovative culture that has powered such prosperity for this part of the world is also nourishing a determined approach to social change. One of the best examples in action is the Founders Pledge, a program of Full Circle Fund that engages startup founders to pledge at least one-percent of company equity toward positive social change in their communities.
Imagine if, at the moment of its inception, Facebook had committed 1% of its equity towards positive social change. With that one pledge alone, the problem of San Francisco’s homelessness might now be a thing of the past.
The Founders Pledge seeks to catch the Facebooks of the future early on and give them the community and resources they need to do good from the start.
Once these companies pledge 1% of equity through Founders Pledge, they automatically become part of the larger Pledge 1% community that the Salesforce Foundation is building nationally and internationally.
Another step could be joining Tipping Point Community, which screens local non-profits rigorously to find, fund and partner with the most promising groups working to educate, employ, house and support those in need.
The San Francisco Foundation has partnered with Founders Pledge because it wants the city’s founders, investors and companies to look different ten years from now. One needs only to look around at the huge wealth gap evident everywhere in the city to recognize the problems that have arisen from allowing tech companies to do whatever they want and not strongly encouraging them to become a part of the local community through giving back.
“Building strong communities and promoting philanthropy reflect both the work of The San Francisco Foundation and the Founders Pledge,” says Carlos A. Garcia, Senior Donor Relations Officer of the San Francisco Foundation. “As the Bay Area continues to prosper, expanding opportunity for everyone is the defining challenge we face. By taking the pledge, these founders demonstrate a commitment to positive social change in the communities where they and their employees live and work.”
Today’s big thinkers want their businesses to yield success not just for the few but for the many. Changing the world means thinking beyond their company’s core mission and broadening the scope of what’s possible from their efforts.
“More and more entrepreneurs are seeking ways to leverage the businesses they are building for social innovation – even when those businesses do not have an obvious social-minded mission,” notes Rob Joyce, Director of Special Projects for Full Circle Fund, who has led the development of the Founders Pledge program. “Change-makers from the nonprofit sector have new opportunities for collaboration to create mechanisms that enable business to go beyond funding good causes, and to become increasingly engaged partners for good.”
The Founders Pledge is a program of the Full Circle Fund, an active network of 200 professionals who leverage their time, talent and resources to help advance high impact nonprofit organizations. The Full Circle Fund model is more than simply writing a check, attending a fundraiser or volunteering for a day. Rather, members come together to identify and advance proven solutions to challenges by vetting organizations in four core issue areas – health, economic opportunity, environment and energy, and education. The annual Full Circle Fund Grant Portfolio is comprised of 10 to 15 nonprofits that receive unrestricted funding and capacity building support from Full Circle Fund members.
“An exciting part of the Founders Pledge vision is not only cross-sector collaboration between nonprofits and startups, but the collaborations we are fostering within our community of social-minded founders,” says Joe Kleinschmidt, CEO of Obindo and one of the first to make the Founders Pledge. “There are tremendous opportunities for organizations like Full Circle Fund, The San Francisco Foundation, Pledge 1%, and Tipping Point Community to work in concert, providing new mechanisms for translating the good intentions of founders into meaningful, effective impact for our communities.”
Similar to Full Circle Fund, Social Capital Markets (SOCAP) describes itself as a network of heart-centered investors, entrepreneurs, and social impact leaders who believe in an inclusive and socially responsible economy to address the world’s toughest challenges. Starting with a small group of investors determined to prove that doing good has two bottom-lines – social and financial – SOCAP offers a platform where social impact leaders can connect and present their ideas to a global audience.
The flagship SOCAP conference is the organization’s annual event, where investors willing to put money into enterprises focused foremost on social return can meet the world’s most innovative entrepreneurs. As SOCAP sees it, “impact investing” is the driving force for the new economy, and everyone – investors, community activists, government officials, nonprofits, corporates – is needed around the table if we are to meet the challenges ahead.
I’m proud that my company, Causecast, has not only signed the Founders Pledge but also partnered with the organization to cultivate its community of changemakers by engaging members in volunteer and giving opportunities in the Bay Area
It’s a thrilling time to be a part of Corporate Philanthropy 2.0, and the pioneers charting new possibilities for corporate social responsibility are raising the bar for us all.