“The business of business is improving the state of the world”
—Marc Benioff, Chairman & CEO, Salesforce
Companies today are often positioned to do an incredible amount of good, and The Life You Can Save believes that all companies, regardless of size, can make a positive difference. In the updated 10th Anniversary Edition of his book, The Life You Can Save, one approach that our founder Peter Singer discusses that empowers CEOs and founders to do the most good is Pledge 1%.
Pledge 1% is a global movement that invites companies of all sizes and stages to give 1% of their equity, time, product, or profit—or any combination of these—to charity. Spearheaded by Salesforce, Atlassian, Rally for Impact and Tides, Pledge 1% has now been taken up by 8,500 companies in 100 countries.
For many of us, numerous questions come to mind. My company is just starting out with no profit and few employees, can I really make a difference? Isn’t it better to be private about my company’s philanthropy—why take a public pledge? And does pledging even work?
To answer these questions and hopefully inspire you to get started on your company’s philanthropic journey, here are four reasons why it’s a great idea to begin with a pledge. We like to call these the Four C’s: Commitment, Community, Culture and Contentment.
Commitment: Lock it In!
To pledge 1% may seem like a small commitment, but commitments allow you to hold yourself accountable to your most important values. After all, if you work for a start–up, or even a later–stage company, you are likely working heads-down, around the clock. It is all too easy to put off giving back and realize it only too late. Taking a pledge, such as Pledge 1%, is an easy way to get started, and to make an enormous difference!
Let’s imagine a scenario where you are the founder of a start–up with $1M in revenue and 20 employees, with say 10%—or $100,000—in profits.
- Pledging 1% Profit: In this scenario, you’d be donating 1% of your profits: a total of $1,000. While this may seem like a small amount upon first glance, $1,000 could do a lot! And to hopefully blow your mind and inspire you, here are examples of just some of the good you could do with a $1,000 donation: restore eyesight for 20 people with curable blindness who cannot afford surgery; protect 1,000 people from malaria for up to 3 years; or provide seed capital to jumpstart 6 micro–businesses in the developing world!
- Pledging 1% Time: Alternatively, you could pledge employee time. Based on approximately 2,000 work hours per year per employee, 1% would be 20 hours. If your start–up has 20 employees, you’d be contributing 400 hours of time for employees to use their unique skills to better the world.
- Pledging 1% Product: Likewise, you could pledge 1% of your products– either your products in entirety or subsidizing your products for charity. For instance, if you run a tech company, your technology could be customised to help a charity of your choice in a cause area close to your heart, be it education, health or women empowerment! Your product would provide innumerable benefits to the charity you care about.
- Pledging 1% Equity: Finally, you could pledge company equity at an early stage, ensuring that your future success benefits the world.
Moreover, as your company grows, you leave open the possibility that you could eventually be giving away a massive amount: your philanthropy grows with your company!
Atlassian took the Pledge 1% back when it was a very small company. Scott Farquhar, CEO of Atlassian says, “We made that pledge publicly so our customers and staff would hold us accountable. And it worked… Looking back now, I can say that pledge was one of the best decisions we ever made.”
Similarly, Suzanne DiBianca, the Chief Impact Officer and EVP of Corporate Relations at Salesforce talks in an article in Forbes about how making an early commitment enabled Salesforce to integrate giving back early into the company culture. “In the early days we had no money and very little product. So, in the beginning, we were really focused on our employees and the volunteer part of it. And looking back it was the right place to start, it really became part of the hearts and minds of the people who work there.” At Salesforce alone, donations had, as of 2018, added up to over $240 million in grants, 3.5 million hours of community service, and product donations to more than 39,000 non–profit and educational institutions. It all began however, by making a commitment.
The bottom line: Making a commitment allows you to hold yourself accountable to your highest values, to lock in your good intentions, and to ensure that a small portion of your future success benefits the world.
Community: Strength in Numbers
Initiatives such as Pledge 1% ensure that your company’s philanthropic efforts are not operating in a silo. Rather, by making such a public pledge, you join a community of like-minded business leaders. And there is strength in numbers.
Forming a community makes it more likely that those who have pledged will reinforce and support each other’s commitment to giving, making it more likely that you will stick to your giving aims. In addition, such communities share knowledge, experience and best practices, enabling and empowering you to be part of something bigger than yourself.
On Giving Tuesday, for instance, Pledge 1% launched the #Pledge1Gives GivingTuesday campaign, which celebrated the many ways their member companies are having an impact around the world. The Pledge 1% blog contains inspiring case studies of companies that are doing incredible good.
One such company is MediaMath, the leading independent advertising technology company for brands and agencies. MediaMath focuses its pledge on supporting charities that demonstrate proven effectiveness. Three of the charities it supports are recommended by The Life You Can Save: Seva, Living Goods and Project Healthy Children. Michael Quinn, director of MediaMath.org shares his reasons for giving more and giving effectively in blog posts that are open to the public and available for all other Pledge 1% community members to read. Pledge 1% creates a platform that enables philanthropically minded companies to share such knowledge, experience and best practices, such as the perspective shared by Michael Quinn.
When MediaMath announced its decision to allocate 1% of equity to social good in 2017– in addition to its prior commitment to dedicate 1% of time and technology– it was joining a network of more than 2,700 companies in 60 countries that had committed to philanthropic efforts through Pledge 1%. Today, Pledge 1% has been taken up by 8,500 companies in 100 countries.
The takeaway: When you make a pledge, you join a community that enables and empowers you to stick to your commitment, learn from peers and do more good.
Culture: Make Giving The Norm
It might seem counterintuitive to talk about your company’s philanthropy: boastful, awkward and uncomfortable. When companies talk about their philanthropic efforts publicly, we often suspect that their ulterior motive is to gain more consumers, get good press and of course, boost profit margins. After all, shouldn’t we be private and discreet about our charity? Yet, initiatives such as Pledge 1% ask you to do precisely the opposite: they ask you to make your pledge public. And that is intentional
Studies have shown that we are more likely to give if we believe others are giving; in fact, the amount we give is related to the amount we believe others are giving. Similarly, companies are more likely to engage in philanthropy if they believe other companies are doing the same. The implication: by being vocal about your company’s pledge, you could encourage other companies to give back too, thereby doubling your impact. You’d in fact be playing an important part in shifting cultural norms of philanthropy toward giving more and giving sooner.
Cultural norms shift in favour of a particular action when enough people are seen taking that action, signaling to the world around them that we have collectively decided that this action is normal and expected. As more companies make public their pledge to give, they could inspire others to re–consider their own levels of giving, and increase the likelihood that others will give more. And if these other companies also talk about it, the long term effect would be amplified. It would increase the total amount donated. And it would normalize the idea of philanthropy as being a natural part of setting up a company. You’d essentially be helping create a culture of giving.
To sum it up: Your voice is powerful! By making your pledge public, you can inspire others and change the “normal” around giving.
Contentment: A Happier Company
Your company’s philanthropy will make you (and your employees!) happier.
Research provides compelling insight to the secret of happiness: giving more. According to Harvard Business School professor Michael Norton and two colleagues from the University of British Columbia, Elizabeth Dunn and Lara Aknin, money does lead to happiness– if it is spent on others. So although people believe that having money results in happiness, their research suggests that this is only the case if at least some of that money is given to others.
In other words: You’d feel happier if your company were giving more!
And as a bonus, your employees would be happier too. Over 60% of millennials claim that a “sense of purpose” was a key reason they worked for their current employers, companies with giving programs have a 2.3 times employee retention rate and companies with engaged employees see a 26% higher revenue per employee and 13% higher total returns to stakeholders.
Create a happier company by pledging your 1%.
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Pledging is a wonderful way to begin your philanthropic journey. And we urge you to read the recently updated 10th Anniversary Edition of The Life You Can Save (available for free on our website) to learn more about how your company– irrespective of size or stage– can indeed make a difference!
Already convinced!?
We hope you start pledging!
Already Pledged?
Hoorah! We congratulate you on taking this important step towards making a real difference in the world. And we urge you to continue thinking about how you could use your pledge as effectively as possible. The resources on our website– such as our guide to smart giving and our recommended list of Best Charities – are designed to help you think more deeply about how you could do more good with every dollar you donate. We hope that you take advantage of these resources as you continue on your philanthropic journey.
What are your views on pledging, early–stage corporate philanthropy, and the role of companies in creating a better world? We’d love to hear from you at info@thelifeyoucansave.org.
