Any startup can—and should incorporate social good into its business model. All of us do our best work when we are aiming for a higher purpose. There’s much discussion of late about the importance of finding meaning in what we do and creating a model that enables the pursuit of profit and purpose is the path to happier employees and healthier companies and communities.
Just as the best entrepreneurs understand a big picture vision is part of creating a successful product or service, they also know that they can inspire their teams by allowing them to participate in something that goes beyond themselves or their companies.
eBay was a leader in providing equity to fund philanthropic goals and created a foundation, and endowed it with corporate stock prior to its 1998 IPO. The company took off, and so did the foundation—and eBay’s impact on creating positive social change.
salesforce.com followed eBay’s lead and took it steps further. At its founding, the company created a 1/1/1 model whereby 1% of equity, 1% of employees’ time and 1% of profits (in the form of product donations) are given to the communities that salesforce.com serves. (Full disclosure: I’m on the board of salesfore.com.) Later, Google adopted parts of this model. And, one of the conditions for me to accept the CEO job at LiveOps was that we create a foundation that was inspired by salesforce.com’s and that it was totally managed and driven by the employees. I found that employees were very committed to its success and happier at work because they were there for more than just to do their job.
Of course for as many stellar examples as we see, there are also many more ways to mess this up. A few things to keep in mind:
-These efforts fail if they are not from the heart. It cannot be an add-on or an afterthought. It requires ongoing care.
-There’s no time to wait. Most founders think they have to wait until they are profitable in order to give anything away. That’s not the case. Earmarking pre-IPO equity is a powerful and proven model as eBay and salesforce.com have demonstrated. Additionally, this doesn’t have to cost a lot of money. Companies without deep pockets have a much more valuable resource: the hearts and minds of employees who would appreciate having time dedicated to volunteering.
-This will never work if it’s all top-down. People possess a desire to give back, but not everyone wants to give in same way. At LiveOps we had company-sponsored events like Family Giving Tree which provided backpacks and school supplies to kids in need, but we also gave employees a few paid days off a year to work on whatever charity they chose. It’s important to celebrate employees’ desire to give back, but not dictate it. Someone might be driven to find a cure for a disease, while another is dedicated to global education, and another might be passionate about dogs. It’s much more effective to honor what they want to do.