The Importance of Giving Back to the Startup Community
Entrepreneurs and founders make so many sacrifices in order to pursue their ideas in hopes that it will change the world for the better — one can only truly understand the extent of their sacrifices if they do it themselves. Whether it is managing and hiring new people in the company, contacting investors in hopes of obtaining funding, or consistently marketing to new audiences to expand, the role of an entrepreneur can seem endless. Yet, amidst these tasks, many founders have managed to add a new one to the list: giving back to the community.
Why You Should Give Back
It’s easy to disregard giving back to the community, especially when you feel like you’re stretched so thin between your other responsibilities. Many entrepreneurs think that giving back to the startup community is an option, something to do only because it’s the “right thing.” However, there are so many other reasons why it is beneficial to start thinking about philanthropy from an early stage.
“There’s no reason why your business, your personal philanthropy and your corporate philanthropy can’t be integrated. On the contrary: If you can get all the wood behind one arrow, that’s how you’re going to increase your impact.” — Marc Benioff, CEO of Salesforce
To start off with, a socially responsible company will attract socially aware and responsible employees. When employees feel as if they’re contributing towards something that they’re passionate about helping, there will be an increased motivation to be productive and contribute to the company’s success. In fact, 60% of employees say that a company’s sense of social purpose is the reason they chose to work for them, revealing that the success of a company is largely synonymous with its ability to be philanthropic.
Another solid benefit that giving back to the community brings is the ability to build a connection with customers. Socially responsible companies pride themselves for their philanthropy, and consumers often take note of that; when a consumer does something to support the company, it feels like they are also contributing to whatever cause the company is supporting and making them feel like they are also doing their part. Statistically speaking, about “84% of consumers would switch to a brand affiliate with a good cause,” and more significantly, “95% think that it’s a good idea for companies to support [social] causes.” Ultimately, this only emphasizes how important giving back to the community is, for both ethical and economical reasons.
Lastly, showing you and your company care about the community in some sort of way will differentiate your company from competitors. Showing that even that you are a founder with many, many tasks at hand, while still making time to give back to the community, truly will set you apart and build your brand’s value in the market. One act can send a message to your employees, your investors, and other stakeholders about your firm beliefs in your company and it’s socially aware orientation.
How You Can Give Back
Often, when faced with the choice of giving back to the community, many entrepreneurs don’t know where to begin. The first thing that comes to their minds is to donate their money or contribute some part of their assets, something they can be reluctant to do since they’re already spread thin in terms of investing as many of their resources into their company. However, what many entrepreneurs fail to realize is that there are other ways to help out that don’t necessarily involve monetary assets. You might have heard of this before, but we’re going to talk about the “three T’s of philanthropy.”
Being generous and flexible with the time you offer to others can be a great and simple way to start. One way entrepreneurs can put this to use is by mentoring others or putting forward some advice into the community so that others can learn from them. An example of this would be our Spotlight Series: we value what startups want to know and thus reach out to prominent investors who are able to give some time to us to share any knowledge that would help.
What we mean by this is a certain unique product or service you and your company can share with everyone. Offering your specialty to charities for no cost is a way that you and your company can implement on, and since your own “talent” is readily available, the cost of providing this is very low. One company that implements this strategy is TOMS Shoes: for every pair of shoes sold, they in turn donate another pair to a child in need.
This is what most entrepreneurs associated with donating — monetary resources. This isn’t recommended for most startups, since financial gifts should be last on the list of what they should give — it’s essential to first grow into a sustainable business before donating a substantial amount of money. However, once stabilized, giving donations to charities can be seen as almost essential, as it directly impacts a company’s brand image. In 2011, Apple had a reputation as “the least charitable tech company,” so once Tim Cook stepped in as the CEO, he focused on changing this, starting with a $100 million donation in the following year.
Lush’s Charity Pot: Setting an Example
One company that has been exceptional in retaining bright employees who have similar values is Lush. Lush is a retailer of cosmetics, specializing in skin and body care, and they pride themselves with being naturally sourced, cruelty-free, and environmentally sustainable. Founded by Mark Constantine and Liz Weir in 1977, Lush had humble beginnings but innovative ideas, especially with pioneering the trend of bath bombs, solid shampoo bars, and bright colours. They also had the benefit of being a private, independent company, giving them the freedom to choose ingredients from socially responsible suppliers that do not test on animals, a prominent value they still uphold today. Being a “campaigning company,” Lush frequently embeds various social missions within marketing their products. One prominent example is their Charity Pot program, a line of lotion they sell that aims to donate all of the proceeds that are made from a sale of that product to a certain charity that is listed on the packaging. By doing this, Lush is allowing consumers to choose what charitable cause they want to donate to, providing a straightforward and transparent process for consumers who want to help the community and themselves.
Ultimately, when it comes to going back to the community, it truly is a win-win situation, whether it be improved consumer, employee retention or differentiating yourself from the competition. There are definitely more ways to donate than just money, and this includes your time and talent as well. And lastly, the best thing about giving back to the community is the fact that you don’t have to wait until you’re a Fortune 500 company to start the process since anyone can start giving back and pay it forward right from the beginning.
“Goodness is the only investment that never fails.” — Henry David Thoreau
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VenturX is a web platform that helps entrepreneurs through their journey from idea to launch and beyond. VenturX uses data-driven analytics to score and connect startups and investors at Seed and Series A financing.