New Ways Startups Are Doing Good From the Start

Posted by on January 28, 2016 in CSR, Entrepreneurship, Non-Profit - No comments

New_Ways_Startups_Are_Prioritizing_Community_Outreach_resizedAttending SOCAP15, the Social Capital Markets conference in San Francisco, was one of the highlights of my year. A world-renowned conference series dedicated to increasing the flow of capital toward social good, SOCAP brings together impact investors, global innovators, foundations, governments, institutions, and social entrepreneurs for a forum on how best to change the world. It’s nearly impossible to leave without feeling inspired and ready to take on any challenge to social progress.

San Francisco is uniquely positioned to help define and embrace the evolving role that businesses play in social change. While all the attention is on the unprecedented wealth within the Bay Area, the reality is that one in five residents live in poverty. Fortunately, the same entrepreneurial mentality endemic to the region has also ushered in brand new tools to address this growing income gap and other pressing social issues.

One of the most exciting of these new tools is the concept of equity pledges, and I was honored to participate in a dynamic panel discussion about how startups can use this commitment to do good from the start.

The discussion was hosted by Rob Joyce, Director of Special Projects for Full Circle Fund, an active network of 200 professionals who leverage their resources, skills, time, and funds to accelerate social good in the Bay Area. A year ago, inspired by Salesforce’s 1-1-1 model, the San Francisco nonprofit launched Founders Pledge, a program that helps companies bake giving back into their corporate DNA by pledging 1% of their equity to nonprofits.  These pledge-making companies access resources and programing to cultivate a company culture that builds on their equity commitment; these companies also become a part of the Pledge 1% community, a national and international corporate philanthropy movement dedicated to making the community a key stakeholder in every business.

How are Founders Pledge, Pledge 1%, and other programs relating to models like the 1:1:1 and benefit corporations creating new opportunities for collaborative impact between the private and nonprofit sectors? How can a pledge of company equity be the first step to building a broader social-minded company culture? This was the line of inquiry Joyce posed to me and fellow panelists Dipti Pratt, Director of Pledge 1%, which has encouraged 450 companies to take the pledge so far; Carlos Garcia, Sr. Donor Relations Officer at San Francisco Foundation, which ranks among the nation’s largest community foundations in grantmaking and assets; Milicent Johnson, Manager of SF Gives at Tipping Point Community, which funds and partners with the most promising groups supporting the needy in San Francisco; and Joe Kleinschmidt, a board member of Full Circle Fund as well as CEO and co-founder of productivity software firm Obindo, a company that has also made the Founders Pledge.

The panelists I sat with agreed that there’s never been a better time to engage your company in community outreach, and it’s important to not wait to do so. As the founder of two companies, Kleinschmidt had a helpful perspective. “When you first launch a company, your resources are often extremely limited. But you do get to define the kind of culture you want your company to have.”

Ten years ago, when Kleinschmidt started his last company, he wanted to give back. “But the demands of building a company mean you have no extra time to say, ‘Now I’m going to get to that giving back,’” he observed. “I was always ‘about to get to that.’”

When he launched his second company, Obindo, Kleinschmidt recognized that there are always going to be other demands and giving back must be a part of its mission from the start.

Beyond doing the good work, you need to have systems in place to track how you’re giving back. And the biggest piece of data you need isn’t data at all; it’s the infrastructure to tell your story. Causecast is doing its part in this regard by offering our platform to any Founders Pledge company, and by connecting all of the pledge companies to volunteer and give together. This is particularly helpful to startups that may have a small headcount and no point person to manage their employee volunteer and giving programs. Through the Full Circle Fund, every pledge-making company will enjoy the benefits of the Causecast platform.

“We think about leverage every time we make a key decision at our company,” said Kleinschmidt. “The question we always ask is: how can we do this, not slightly better, but a thousand times better? When we apply that question to philanthropy, we feel the strongest answer is to leverage the community of people who are already doing this. Meeting other like-minded founders is pure gold. There’s an alignment there. Purpose drives you, and founders want to connect with people who have those values.”

The panel agreed that one challenge founders face in shaping their corporate philanthropy is investors. How will funders perceive the generosity of equity pledges?

The answer is that culture is a much broader consideration than what happens within your company. You can’t just add culture after the fact if it isn’t there; sometimes it’s too late. And if you aren’t building your culture with intention, it doesn’t mean it isn’t being built.

Startups compete with larger companies for more than market share; they also compete for talent. And employees these days aren’t just looking for balance – they’re looking for purpose. If you want to attract the best talent, you need to shape your company as a visionary on every level, and that includes philanthropy.
From early on, you are signaling what kind of company you are building. The consensus of my esteemed panelists is that prioritizing philanthropy is an essential tool toward creating a company that resonates through the noise and drives positive social change forward.

Ryan Scott

Ryan Scott is a technology entrepreneur who founded Causecast in 2007, driven to help companies harness their power to do good. Through Causecast’s work in developing public service campaigns for leading brands, Scott observed how even the most socially responsible businesses typically under-utilize their best cause advocates; their employees. In researching this phenomenon he discovered that most of the technology to manage employee volunteering and corporate philanthropy was created in the previous century and was struggling to work at the scale that we need to move the needle on the social issues we face.

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