Entrepreneurs More Likely to Give to Charity
18 November 2010 at 9:34 am
A US survey of nearly 150 CEOs and founders, reveals that nine in 10 (89 percent) entrepreneurs donate money, both personally and through their companies, to support charitable causes, while 70 percent also donate their time.
The Fidelity Charitable Gift Fund, a US donor-advised fund program, and Ernst & Young, a global organization of professional services firms has released Entrepreneurs & Philanthropy: Investing in the Future, a study which examines how entrepreneurs apply their personal passion for giving to their corporate philanthropy.
Released at the annual Ernst & Young Strategic Growth Forum, found that the majority (61 percent) of respondents believe that being an entrepreneur makes them more inclined to give to charity. Whether corporate or personal, entrepreneurs view "giving back" as an opportunity rather than an obligation.
Sarah Libbey, the President of the Fidelity Charitable Gift Fund says just as entrepreneurs put their hearts and souls into their businesses, they pour themselves into the causes they care about and are passionate about investing not just money, but time and energy, in the causes most important to them and their companies.
The study found that companies led by entrepreneurs allocate more than twice the percentage of their profits to charity than many of America's largest companies. Six in 10 (62 percent) feel that giving back makes their companies more successful in the long run and one-quarter (26 percent) incorporated corporate philanthropy into their companies' original business plans. Additionally, nearly 70 percent did not wait for "success" to give back, noting they started supporting charities while building their businesses.
According to the study, nearly three-quarters (73 percent) of the entrepreneurs surveyed say that their companies' policies actively encourage their employees to volunteer their time and/or expertise to charitable causes, and more than half (53 percent) offer programs that encourage employees to support charitable causes financially.
Bryan Pearce, Americas Director of the Ernst & Young Entrepreneur Of The Year Award says entrepreneurs have long been committed to giving back, but this study sheds light on the growing number of entrepreneurial business leaders who are incorporating charitable commitments into their business strategies and company cultures.
In addition to being part of the business plan, nearly three in 10 (29 percent) entrepreneurs are seeking to engage with causes that align with their company's core mission.
Business benefits aside, entrepreneurs said their No. 1 reason for supporting corporate giving is the fact that it enables them, as leaders, to integrate their personal philosophies for giving into their corporate culture. More than half (55 percent) of entrepreneurs personally select the charities their companies will support.
While often more public in their corporate philanthropic efforts, the majority (66 percent) of entrepreneurs describe their personal giving style as "quiet/passive." They may be known for their generous financial support of charities, but prefer not to be overtly recognized. Entrepreneurs also say their personal giving is driven by three key factors: gratitude for help received, empathy for those less fortunate and the financial resources and freedom to make a difference.
More than half (53 percent) report that charitable giving is now a key component of their overall personal financial plan.
For entrepreneurs, philanthropy often involves giving more than just money, but also providing their time and knowledge. According to the survey, most entrepreneurs (61 percent) currently sit on the board of a non-profit, and half (50 percent) currently chair a board or have chaired a board in the past.
Although increasing in popularity, donor-advised funds currently account for just 3 percent of America's $300 billion in giving; yet, 16 percent of entrepreneurs report that they use these strategic giving vehicles in their own personal philanthropy.
The Entrepreneurs & Philanthropy: Investing in the Future study was compiled from an online survey of 146 entrepreneurs by Harris Interactive between September 17th and October 6th, 2010. The study was conducted in cooperation with Ernst & Young, which invited their Entrepreneur Of The Year Award Winners Network to participate in the survey.
The full report can be viewed at http://www.charitablegift.org/about-us/news/entrepreneur.shtml