Why the best business leaders care about philanthropy
Corporate philanthropy makes sense and more businesses than ever are involving themselves and their employees in charitable activities. But it doesn’t stop there.
Many of the world’s top business leaders have made philanthropy part of their lives; entrepreneurs such as Sukhpal Singh Ahluwalia of Dominvs Group, Leonard Ainsworth of Aristocrat Leisure and Sir Stelios Haji-Ioannou of Easy Jet, to name just three.
But why do great business leaders care about philanthropy, especially when they’ve reached the top? Here are just a few reasons why giving back is something that 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 not just on supporting disadvantaged people but understanding issues such as climate change, its effects on our environment, and its long-term impacts on the people’s everyday lives.
Australian companies gave $867m to charity last year, 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 come as no surprise that some of the world’s top individual philanthropists are living in the region.
Business leaders who do step up to the plate worldwide are impressive. One such philanthropists 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. In fact, it’s estimated that in the UK, only 3% of all giving goes towards the environment.
Giving back as a duty and responsibility
Many business leaders are self-made and have been on a very 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 richest people but his early life was a huge struggle. In foster care, in street gangs and homeless, one point he was so poor that he lived in his own car. But despite the odds he went to build 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
One of the most fascinating developments over the last 10 years 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, but one of the reasons is likely to be that family business owners especially are looking to inspire the next generation along with their peers.
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 sign a 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.
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 business up to be Europe’s largest retailer. His 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.”
Business leaders give vast amounts of their own money to good causes for a huge variety of reasons but 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.