Published on April 8th, 2014 | by Jose Vasquez0
Why Philanthropic Strategies Benefit Startup Tech Companies
Your company’s reputation is a highly important factor in how quickly and efficiently you’ll be able to expand.
Many major tech companies, like Google and Amazon, have diversified corporate social responsibility efforts to donate time and money to charitable endeavors and give back to society. As a result, nonprofit organizations and charities enjoy millions of dollars of benefits, helping to shape the world into an environment that supports stability and encourages more people to give back to society. Corporate responsibility also improves their reputation, driving more business and more interested employees to their core operations.
As a startup tech entrepreneur, you might be thinking this strategy is inappropriate or inefficient. After all, giant tech companies have ample revenue to dedicate to purely philanthropic efforts. Startups have much less revenue, and aren’t able to make as substantial an impact.
Nevertheless, as Kraig Swensrud writes, even the earliest stage startup tech companies can benefits from implementing a plan for corporate social responsibility. As he notes, Salesforce.com implemented a 1/1/1 model to dedicate one percent of their product resources, one percent of their employee time, and one percent of their profits to charitable endeavors.
Such a small scale would have no significant short-term bearing on the workload or profitability of startup tech companies, but could easily be scaled up to something much bigger. For example, every $1 million of revenue would instantly yield $10,000 in charitable donations. Such an effort would not only benefit your charity of choice, but would also look good for potential clients and employees.
Implementing such a strategy early on also means potentially attracting new venture capitalists or investors looking to make a significant social impact with their investment in addition to helping a startup grow.
If every new startup implemented some small corporate social responsibility model like the one outlined above, the collective impact would be beyond measure. The enrichment possible from such a strong collaborative investment could lay the groundwork for millions of potential entrepreneurs and investors to come, creating a sustained cycle of growth, profit, donation, and mutual benefit.
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