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Guest blogger, Diane Solinger is the Executive Director for Entrepreneurs Foundation, dedicated to helping corporations make meaningful impact in their communities through strategic corporate citizenship and corporate social responsibility (CSR).
Just as individual philanthropy was traditionally reserved for people who had achieved a certain level of financial success and, let's face it, a certain age or status, corporate philanthropy was only for companies that were well established and members of the Fortune 500. Something happened in the 1990's that changed both of these perceptions.
Individuals led by, among others, an enlightened Bill Gates, decided it would be a wise idea to learn how to be philanthropists before they retired from the workforce. Additionally, the definition of philanthropist changed so that anyone, of any age, with even small amounts of money, could play an important role in the social sector. For example, great strides have been made in microfinance and there has been much success of organizations such as Kiva.
What about corporations? If corporate philanthropy is left only to large companies, isn't our society limiting the opportunity for social impact if we don't find a way to include emerging companies? Since there is significant data to suggest that corporate philanthropy and corporate community engagement is not only good for society but also for the business' bottom line, why shouldn't our emerging companies also benefit from being philanthropic?
Thankfully, the same enlightenment for individuals in the 1990's also occurred with some entrepreneurs. eBay was a trendsetter when the company's founders chose to pre-fund their corporate foundation with pre-IPO stock. Soon afterward, the Entrepreneurs Foundation was established to enable emerging venture capital-funded companies to do the same across the United States and Israel. The Salesforce.com Foundation and Google.org were formed in a similar fashion. While eBay, Salesforce.com and Google.org emerged as technology leaders and household names, many of the other emerging companies, who have made similar commitments, may have less recognizable brands, but nonetheless have made important contributions.
Emerging companies like LoopNet, LiveOps, CenterBeam, Silicon Labs, Homestead and Rally Software have each dedicated pre-IPO shares to pre-fund their own corporate foundations and committed other corporate resources to address social issues that affect their businesses and their communities. They, like their Fortune 500 brethren, are finding that being involved in the community is good for business. Employee morale, particularly in these difficult economic times, is enhanced and public reputation is heightened. Additionally, although no one can predict what the economy holds for any company these days, there is a general feeling among these emerging corporate philanthropic leaders that these companies will endure.
Emerging companies tend to have less financial resources to dedicate to grant making. This makes them creative and innovative in their approach to community engagement. They leverage their non-cash corporate assets such as equity, employee time, talent, and in-kind contributions. Also, they don't have dedicated staff to manage these philanthropic programs so employee volunteers lead the efforts. For example:
- Homestead encourages each employee to volunteer one day per month and provides opportunities for engagement. Even now that Homestead is a business unit of Intuit, this tradition continues as part of the culture.
- LiveOps partners with local organizations focused on workforce development. Since the company's software enables people to work from home as independent call center associates, workforce development is core to the company's business model.
- LoopNet works with local food banks and uses interoffice competitions to increase employee participation. Additionally, last December, twenty LoopNet employees (Loopsters) chose to live on the equivalent of a weekly food stamp allocation and then blog about their experience to raise awareness about hunger.
- Silicon Labs created a special scholarship program from the proceeds of their foundation that was created with pre-IPO stock. The scholarships help young Latinas in Austin and aim to increase ethnic and gender diversity in science and math careers.
- Rally Software followed Salesforce.com's model and has committed 1% of equity to the Boulder Community Foundation, 1% of employee time and 1% of product donations to community organizations.
These small companies are making a big difference. While these are examples of emerging companies that have heard the call, many emerging companies still have not. Young, entrepreneurial, companies need to know that corporate social responsibility isn't just an expectation of the Fortune 500. It is our responsibility as employees and consumers to let all companies know that regardless of size or stage of their life cycle, they can, and should, find ways to engage with society. Through the work of Entrepreneurs Foundation, and companies such as the examples listed here, a movement is building (similar to what the microfinance philanthropic movement has done for individual social investment) for emerging companies to be strong philanthropic leaders.