David Green is one of the richest men in America. His net worth is $14.9 billion as of 2023. But what does he do with it? Gives half of his company’s pre-tax earnings to evangelical causes. What’s his business? Selling arts and craft supplies. It’s the Hobby Lobby franchise. Forbes estimates his lifetime giving at upwards of $500 million.[1] What’s the secret to Green’s success? He would tell you it’s God’s grace, and I’m not going to argue with that.
But the secret behind Hobby Lobby and other successful companies is this: corporate philanthropy. They’ve tapped into the benefit of living for something greater. Author Simon Sinek said, “People don’t buy what you do, they buy why you do it.”
Companies that lead the charge in philanthropic giving show that business, if done properly, is the ultimate charity. Why do I say that? Charities consume donations. They consume others’ labor and resources. There’s nothing wrong with charities that do so much good in the world.
But there’s a greater structure that’s already in place but rarely used—and that’s a business dedicated to business that dedicates a portion, a majority, or all of its profits to charity. Now that’s extraordinary! It’s revolutionary! It not only helps the greater good but also replenishes its income and assets. A business—when run well—is a self-sustaining organism.
Let’s look at three ways philanthropy is good for business.
Leads to More Profits
First, philanthropy improves profitability. Statistically, there’s been an ever-increasing trend that customers want to see—and sometimes demand—that the companies they do business with have a charitable mindset. This didn’t used to be a thing. Advertising has a different feel these days. Commercials and ads are less about what a product can do for you and more about the difference the company’s making locally or worldwide.
Marketing experts know that customers today like you and I don’t mind paying a tad more for a product that shares its profit to inspire social change. For example, you’ve got Starbucks advertising how it supports fair-trade farmers and Amazon highlighting the difference it’s made through providing college scholarships. More and more Super Bowl ads feature a company’s charitable focus.
It’s less about what a company is offering and more about what they stand for—and customers are taking note and engaging.
You might be surprised to find that the Bible talks about this. Proverbs 11:25 says, “Whoever brings blessing will be enriched, and one who waters will himself be watered.” You’d think it would be the opposite, that the more you keep for yourself, the more you have. But it’s actually the opposite—the more you give away, the more you have because often God blesses you with more. So philanthropy is good for business because it leads to more profit, which can then be re-invested in charitable work, and the cycle continues.
Culture Improves
Next, philanthropy is good for business because culture improves through dedication to a common vision.
Few people today are motivated to work long term for a company that’s 100% focused on the bottom line. This especially true as the workforce becomes dominated with Millennials and Generation Z. Ninety-four percent of Millennials want to use their skills to benefit a cause.[2] Upcoming generations resonate with a socially responsible business model.
Philanthropy connects your team and coworkers to a greater mission and deeper reason for going to work. It gives purpose! Centering your culture on serving others causes your team to focus not on clocking in and out, but on a mission greater than what the business does in the day to day. Volunteering and giving as a group create a community and bond that we are in this together. Your team feels like they’re part of something larger that is making a difference in the world—and that’s a powerful motivator.
Once you’ve established an altruistic culture, it’s even more powerful when customers start buying into it. Some notable companies have been pioneering these ideas for years:
- Warby Parker is an American online retailer of prescription glasses, contact lenses, and sunglasses. Its campaign to “Buy a Pair, Give a Pair” has given away over 20 million pairs of glasses.
- Toms shoes’ sell-a-pair, donate-a-pair campaign donated 95 million pairs of shoes to children in need through humanitarian organizations. It’s since ended that and is now donating a third of its profits to non-profits.
These are some excellent models of corporate philanthropy embedded into the culture because they’re actionable—and it’s easy for the customer to understand how their individual purchase is contributing to the greater good.
Gives You a North Star
The third benefit to philanthropy is that it gives you a North Star. It’s all too common for companies to lose their way. Founders die. CEOs stumble. We don’t need another mission statement; those are nice, but people want to see action, not platitudes. You need a philanthropic cause that’s bigger and can reorient you and your company back to the cause you are fighting for.
You might say, “I have a North Star, Andrew! We have posters of our vision statement everywhere.” So do most companies! Their vision and mission statements are plastered all over the building for everyone to see and buy into. But that’s simply not enough. What really makes a difference is laying out a philanthropic vision that everyone from the entry-level employee to the CEO can buy into and see how their work is contributing to this larger goal. Customers want to see the vision lived out and the company serving a greater purpose.
On a practical note, let’s say you want to take corporate social responsibility to heart. What’s the cause you want to unite your company around? Maybe it’s poverty, education, mental health, or relieving hunger. Maybe it’s disaster relief or helping veterans and those in military service. We could go on and on. There are so many ways to make a difference! So how do you find out what your social cause is? Ask yourself these questions:
- What ticks you off and makes you mad? Right there is the mission.
- What makes you smile and say, “Amen” when you hear about progress? There’s your vision.
Summary
Let’s recap. These are the three ways philanthropy is good for business:
- Increases profitability
- Improves culture
- Provides a much-needed North Star
Let me ask you: Are you a business owner? If so, what percentage of your profits can you afford to donate to greater causes? How can you integrate a “buy and give” model like Toms or Warby Parker? Find causes that are larger than the value and problem you solve in the marketplace. Don’t wait for your business to reach a certain stage or reach a certain metric like ROI or ROA. No—give now. Give today. Don’t put it off until tomorrow or you’ll never do it.
If you’re not a business owner, why not? Can you bring value to the marketplace in some way that would be profitable? Do it. Pursue it. Then after you reach profitability, make it your goal to give back generously.
I agree with David Green, the CEO of Hobby Lobby: There’s no greater cause than the kingdom of God. There’s no greater cause than seeing others come to Christ. Give toward this end, and watch what God will do in, through, and for you!
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