A new report by the Fidelity Charitable Gift Fund and Ernst & Young finds that entrepreneurs are highly likely to give to charity--regardless of their income level.
Of the 150 CEOs and founders surveyed, 89 percent donate funds, via their company and personally, to a variety of charitable causes. In addition, 70 percent donate their time (on top of financial contributions). Apparently, this group takes "sharing the wealth" literally.
By the Numbers
A whopping 61 percent said they agree with the statement "Being an entrepreneur makes me more inclined to give to charity." Overall, these leaders seem to see giving back as an opportunity rather than an obligation. "Just as they put their hearts and souls into their businesses, entrepreneurs pour themselves into the causes they care about," says Fidelity Charitable president Sarah Libbey. "They are passionate about investing not just money, but time and energy in the causes most important to them and their companies."
On average, companies headed by an entrepreneur give about twice as much profits (by percentage) as some of the biggest corporations in the country. In all, 62 percent say they think giving back leads to a more successful company down the road, while a heartening 26 percent note that they drafted philanthropy plans into their very first business plan. According to the report, 70 percent of entrepreneurs didn't hold off until they were successful to give, but rather gave to charities even during the tough startup days.
A Team Environment
About three-quarters of those surveyed said the policies of their companies are designed to encourage employee giving, while more than half say there are company programs to help make this more possible for workers. "Entrepreneurs have long been committed to giving back, but this study sheds light on the growing number of entrepreneurial business leaders who are incorporating charitable commitments into their business strategies and company cultures," says Bryan Pearce, the leader of Ernst & Young's Entrepreneur of the Year awards program.
Around 30 percent of those surveyed say they choose to work with charities that complement the core mission of the company. However, the most-cited reason for giving is that it allows them to mix their personal priorities with the company. It's not surprising that 55 percent of entrepreneurs handpick which charities the company supports.
Even though the majority of entrepreneurs choose the charities, 66 percent say they're "passive donors." This means their donations are not publicly tied to their names. In addition to giving financially, 62 percent serve on a board of a nonprofit, or have previously. "Getting personally involved with a charity...is one of the best means for donors to conduct due diligence while also benefiting the charities," says Libbey.
What can entrepreneurs learn from this? Money often equals power; and part of that is being able to positively influence the causes you identify with. If you're building a company, you'll probably want to think about how to mix philanthropy into your goals. Pinpoint your interests, do your research, and don't forget about tax deductions.