According to a study by Fidelity Investments, entrepreneurs give more to non-profits and volunteer more than their financial peers and tend to give more than non-entrepreneurs on average. They also found that two-thirds of entrepreneurs volunteer two or more hours a month, compared to just over half of non-entrepreneurs. Additionally, entrepreneurs are more likely to feel that philanthropy is an essential part of their lives than their financial counterparts and see the link between volunteering and professional success in the report. The Fidelity study also found that entrepreneurs apply their business skills to their philanthropic endeavors, meaning they are very hands-on, creative, and eager to make sure their money and efforts result in the most positive impact on their targeted charities.
As one myself, I believe that business entrepreneurs can take philanthropy to a higher level due to their unique skills, drive, and mindset. Entrepreneurs are adept at finding opportunities everywhere they look. To practice charity in the same way, consider the possibilities for developing sustainable businesses that help alleviate poverty, hunger, disease, homelessness, and lack of access to education. Successful entrepreneurs are also usually adept at recruiting people with complementary skills, knowledge, and talents. They should approach their philanthropic efforts with the same focus, determination, and diligence they use when launching a start-up so that they can support the causes and organizations they are passionate about.
Here are some tips I have for entrepreneurs who are interested in giving back to their communities.
Take time to think about what causes are important to you.
As we decided to focus our philanthropy, my wife and I identified areas that we are most passionate about and concerned about while leaving room for others that may come to our attention in the future. Whether giving from the family foundation or their own funds, our children were instructed to do the same when involved. Since we’ve always involved our children in our businesses, it makes sense to get them involved in our philanthropy, too. Our goal is to encourage them to give thoughtfully and according to their interests and concerns.
Check the credentials and the operating practices of any organization or individuals you target for your donations or time.
However, there is sad that not all non-profit charitable groups operate ethically or well. Media reports suggest non-profits misuse more than $1 billion in donated funds. Whenever we make a grant, we check any new recipient to make sure the money is going where it is supposed to and not supporting high executive salaries or administrative costs that may include expensive meals, hotels, or travel. You can find several excellent resources out there, such as the BBB Wise Guide Giving Alliance, that monitor them regularly and provide ratings and recommendations.
Consider the impact of your giving on your taxes.
Even though I enjoy helping deserving individuals directly, I like to save income tax dollars to donate even more to additional charities. Donations to most non-profit organizations qualify as tax-deductible expenses. Philanthropy watchdog groups advise donors to check with the organization they contribute to or the Internal Revenue Service (IRS) website before donating. Your accountant will certainly appreciate it!
Give from the heart.
It will be much more meaningful to work with charities you have a personal connection within the long run. Family ties to our family in Canada run several generations deep with one of our favorite charitable organizations. Mennonite Economic Development Associates, or MEDA, invests in programs that improve the lives of people in need by helping them become more self-sufficient, which is why we admire its efforts. This group is also appealing because it was founded by entrepreneurs and partners to help them start or grow businesses in developing regions. Through investing and advising entrepreneurs since 1953, they have helped 103 million families in 62 countries. Our thoughtful donations to organizations like this will create an impact that will outlive us all.
Look for need wherever you are working.
Due to their many clients and projects, entrepreneurs have the opportunity to make money and make a difference in many places. Trisha Wilson is a world-renowned interior designer who worked on landmark and luxury projects on the African continent over the years, including the Palace of the Lost City, the Zimbali Forest Lodge, and The Blue Train. However, her most impactful project may well be the private school she built and the large clinic she renovated and supports in the impoverished Limpopo province north of Johannesburg. She advises entrepreneurs interested in philanthropy that the operations side of non-profit organizations is often overlooked, but it is equally important. “Many big givers want to see their names on buildings, but there are other less sexy places where they can make a big difference,” she said. “I’m not big on buying tables and big gala events for charities. I think my giving is better spent on the operations areas of a school or clinic because that will help keep them alive and serving their students and clients.”
Give your time and talents, too.
Contributing your time and expertise to non-profits and worthy organizations might be more important than giving money. When there is a need, philanthropy also includes taking the lead and providing leadership. Most charities require leaders willing to extend their fundraising efforts and philanthropic outreach. However, non-profit organizations require even more finesse and diplomacy than businesses. When you lead a non-profit organization staffed primarily by volunteers who give their time and talents, you cannot issue orders and directives like you would in a business. It has been reported that more than a third of volunteers at non-profits don’t return after the first year to give more of their time, resulting in $38 billion in lost labor to non-profits. Consider the volunteer workers as valuable resources since they often possess skills and experience that qualify them for high-paying employment. Taking full advantage of the talents and expertise of volunteers will ensure they feel valued, fulfilled, and matched with the right tasks.
Bob Schlegel and his wife, Myrna, came from humble roots in a small Ontario, Canada, farming community. Together, they launched their first family business, PeopleCare Heritage Centers, that grew to include 15 facilities in both the U.S. and Canada. The Schlegels sold both businesses and today are involved in a myriad of new enterprises and philanthropic endeavors. Bob’s new book is “Angels and Entrepreneurs: A Lifestyle Formula for Starting Your Own Business and Riding the Rollercoaster of Entrepreneurship“.