Why the best business leaders care about philanthropy

Corporate philanthropy makes sense; more businesses than ever involve themselves and their employees in charitable activities. But it doesn’t stop there.

Corporate philanthropy involves businesses donating money, resources, or time to charitable causes. Many companies engage in philanthropy as part of their corporate social responsibility (CSR) initiatives, aiming to impact society and enhance their public image positively.

But why do great business leaders care about philanthropy, especially when they’ve reached the top?

Here are a few reasons why giving back is something the best entrepreneurs genuinely care about.

The world is changing, and their support is needed fast

Often, business leaders are some of the first to understand that you can only affect real change by tackling the root causes of a challenge. That means many are focused on supporting disadvantaged people and understanding issues such as climate change, its effects on our environment, and its long-term impacts on people’s everyday lives.

Australian companies gave $867m to charity in 2018, and in fact, according to the CAF World Giving Index, Indonesia, Australia, and New Zealand are the top three giving nations on earth. So, it should be no surprise that some of the world’s top individual philanthropists live in the region.

Business leaders who do step up to the plate worldwide are impressive. One such philanthropist is Sir Stephen Tindell, founder of New Zealand’s largest retail group. His foundation is helping to reconnect New Zealanders to their natural environment. Since its foundation in 1982, the fund has donated more than $145m and supported initiatives, including donations to develop sustainable farming and plant millions of trees.

We sorely need more people like Sir Stephen right now because when you look across the board, environmental philanthropy lags way behind other forms. It’s estimated that in the UK, only 3% of all giving goes towards the environment.

Giving back is a duty and responsibility.

Many business leaders are self-made and have been on a long journey to success. Some were immigrants who fled violent regimes as children; others worked their way out of extreme poverty.

These experiences often give them a sense of duty and responsibility to help others and the planet. John Paul DeJoria is one of the world’s wealthiest people, but his early life was a huge struggle. In foster care, in street gangs, and homeless, at one point, he was so poor that he lived in his car. But despite the odds, he built a series of successful businesses, including John Paul Mitchell Systems, Patron Spirits Company, and the House of Blues nightclub chain.

DeJoria says: “People say you give away all these millions, but I don’t give them away. I invest it in people,” he says. “I don’t mean I get the money back, but our planet will. We have to take care of one another. And that’s what we do.”

Setting an example for their peers and the next-generation

Over the last ten years, one of the most fascinating developments has been the number of ultra-rich who are prepared to talk openly about their philanthropy. It’s easy to speculate about why they have begun to do this. Still, one of the reasons is likely that family business owners especially are looking to inspire the next generation along with their peers.

Bill and Melinda Gates Foundation and Microsoft

While not a corporation, the Gates Foundation is one of the largest philanthropic organizations globally. Founded by Microsoft co-founder Bill Gates and his then-wife Melinda, it focuses on global health, education, and poverty alleviation.

Besides Bill Gates’ contributions, Microsoft engages in corporate philanthropy through the Microsoft Philanthropies program. The company focuses on education, digital inclusion, and environmental sustainability.

A couple more tech companies, including:

IBM

IBM has a long history of philanthropy, contributing to causes such as education, health, and community development. The IBM Foundation is the primary channel through which the company supports these initiatives.

Google (Alphabet Inc.)

Google is known for its philanthropic efforts through Google.org. The company supports initiatives related to education, poverty alleviation, and technology for social impact.

A bank and two FMCG companies

JPMorgan Chase & Co.

JPMorgan Chase is involved in philanthropy through the JPMorgan Chase Foundation, supporting various economic development, education, and workforce readiness initiatives.

Walmart

Walmart has been a significant corporate philanthropist, supporting various causes such as hunger relief, education, and environmental sustainability. The Walmart Foundation is crucial in managing the company’s philanthropic initiatives.

The Coca-Cola Company

Coca-Cola has a history of corporate philanthropy, supporting water stewardship, education, and community development initiatives. The Coca-Cola Foundation is the entity responsible for managing these initiatives.

The Giving Pledge is the most visible example of this. Created in 2010 by three of the world’s most outstanding philanthropists, Bill and Melinda Gates and Warren Buffett, it encourages billionaires to pledge to give away the majority of their wealth over their lifetime.

To date, 204 of the world’s wealthiest individuals, couples, and families have signed the Pledge, including Elon Musk, Brian Chesky, and Mark Zuckerberg.

Sir Tom Hunter

One signatory to the Giving Pledge is long-time Scottish philanthropist Sir Tom Hunter, a self-made entrepreneur who started his first business by selling sports trainers from the back of a van. He built the company up to be Europe’s largest retailer.

Tom’s written public pledge reads: “We don’t want to be the richest guys in the graveyard. We want to “do good” while we are still alive. Why let others have all the fun? For those who are thinking about this. All I would say is seeing a project we have helped work is a bigger sense of achievement than any business deal I have ever done.”

Final Thoughts

Business leaders give vast amounts of their own money to good causes for a huge variety of reasons,. Still, it’s clear that the majority do so because they care a great deal about using their business experience and wealth to help others and the planet. For business leaders, philanthropy makes sense not just on a corporate level but on a personal one, too.