For the past few decades, philanthropy has been a common corporate practice, in part thanks to the associated PR and tax benefits it has offered multinationals such as BP, Walmart and Citigroup. However, recent years have seen a notable rise in the number of startups that care about corporate social responsibility -- either as part of their business model or by participating in programs that help small businesses "give back."
We want to know the reason for this movement. Is the current generation of entrepreneurs simply more social-minded? Or are there fundamentally sound business reasons inspiring startups to increasingly engage in charity beyond the want to "do no evil"?
I believe both speculations to be true, and on that note, here are my top five reasons why startups should do their part for charity:
1. It reflects well on your brand and generates good will
Customers are much more likely to trust and emotionally invest in a brand if it's known that they give to a worthy cause. Deciding which cause to support can play a big part in defining your company's identity. For instance, the automaker Jeep is a major sponsor for Movember, a prostate cancer campaign. This makes sense, as consumers can readily see the correlation between Jeep's male-oriented branding and a charity centered around a male disease.
2. It's a chance to team-build with a purpose
Sure, team-building exercises are fun and can be good tools for building trust within a group. But, doing something worthwhile that actively leverages your team's greatest strengths is even better.
At Reedsy, I launched #IWriteBecause, a campaign where authors of all stripes can share their personal reasons for writing. For every author who submits a video, we've been donating $10 to a non-profit focused on child literacy and girls' education in Africa and Asia. Not only is this a way for the team to give back, but it's also given us an opportunity to channel our design, engineering, and marketing talents into a worthy project.
3. It will give you an edge when recruiting
Yes, social responsibility will legitimize you with customers, but it can also be a deciding factor when you're hiring up. You're running a startup, after all: a lot of the talent you're recruiting don't want to work at another faceless corporation. What better way to show prospective employees that you're a company that cares than by doing some meaningful charitable work.
This also ties into your own comfort and quality of life. What sort of company are you trying to grow? Do you want to build a place where your colleagues are kind, focused, and socially-minded humans? ...or do you want to work at Uber?
4. It lets you engage your network on another level
This works particularly well if your philanthropy takes the form of a campaign, rather than a simple cash donation. Give your network the chance to join your cause; make it easy for them to do their part, and get your clients, suppliers, partners and customers to become a part of "your team."
Asking for money rarely works; but if you reach out to prospects for their thoughts or expertise on a project, you'll be surprised how often you receive a reply. For networking opportunities alone, working on a charitable project is more than worth the effort.
5. It could be a core part of your business model
A lot of us would love to follow the lead of Warby Parker or Tom's, whose philanthropy is central to their brand. They're able to donate their much-needed goods at cost (obviously) in exchange for maximum PR. In the case of Casper, giving to homeless shelters also solves their problem of surplus mattresses.
The good news is that you don't have to produce easily-donatable products to make charity a key part of your business model. Movements like Pledge 1% will help early stage companies donate a small portion of their time, resources, product and, above all, equity to non-profits of their choosing.
6. It's good for the market
When you're helping those most in need, you're sowing the seeds for a more vital economy in the future. It's the free-market equivalent of combating climate change: it's not going to transform the world tomorrow, but down the line, we're going to be glad we did it.
Because we're a part of the publishing world, it makes sense for my company, Reedsy, to give back by contributing to the child literacy and encouraging authors to inspire the next generation of writers. A thriving market of readers and authors is critical to our continued success. Anything we can do to ensure that is a clear win.