Despite the recently-announced decline in 2022 charitable giving, we continue to hear inspiring stories from you and other fund holders and donors. We’re also hearing from more and more individuals and families who are not yet fund holders that they’re very interested in establishing a donor-advised, field-of-interest, designated, or unrestricted fund at the community foundation, and nothing could make us happier! Increasing charitable giving and connecting donors to their favorite important causes are our priorities at the community foundation.
The uptick in conversations about philanthropy has inspired us to reflect on the noteworthy generosity of so many entrepreneurs who become very generous donors and leaders in philanthropy. And on that front, the news keeps getting better. For example, the Giving Pledge has added six pledgers already in 2023, one more than during all of 2022; savvy investors, especially in the tech sector, are enjoying the market’s 2023 rebound, at least so far; and we’re seeing an increase in the number of those who’ve experienced successful business exits take a visible role with their commitments to important projects in their regions.
Over the years, we’ve observed an interesting trend. Entrepreneurs are certainly donors, but are donors entrepreneurs? In other words, is an entrepreneur’s approach to philanthropy similar to the entrepreneur’s approach to building a business? Do they give it like they made it?
We believe the answer is yes, absolutely. And often in ways that entrepreneurs–and other donors, for that matter–may not consider.
Indeed, an “entrepreneur” is sometimes defined as a person who aspires to build something bigger than themself. That’s exactly what happens when a donor supports favorite causes through a donor-advised or other type of fund established at the community foundation. This is especially appropriate because contributions to funds at the community foundation are much more than simply charitable donations. Contributions are investments in local philanthropy to improve the quality of life in our region and to support the causes the donor cares about. The return on investment is human-centered rather than only financial, and those returns deliver benefits to not only the nonprofits who receive grants from the fund, but also to the community as a whole.
Here are few ways that gifts—rather, investments—via a fund at the community foundation are similar to entrepreneurship:
–A gift from one person, one couple, or one household can have a generous ripple effect that “scales” to help many, whether that is to feed many families, subsidize a childcare center, or help support programs that allow parents to work and earn a living.
–Donated funds are the “seed money” that can inspire innovation, the kind that allows the grantee organization to function in new and efficient ways.
–A gift can expedite creation of the recipient organization’s brand new programs via pilots (in the tech world, “MVPs, ” or minimally viable products). This form of testing and learning is a critical step to achieving product or service viability, whether in the for-profit or nonprofit sector.
–Philanthropic support can provide a nonprofit organization with the means to hire much-needed talent, such as a social worker or a fundraising professional. This is not unlike an entrepreneur’s need to hire key team members, such as a software engineer or a full-time chief financial or accounting officer, who may have otherwise been unaffordable or delayed in coming onboard.
–When philanthropic support is provided through a local business development initiative, a grant can provide ongoing funds that help create new businesses and jobs, whether for essential services or potentially breakthrough technologies. This type of investment is entrepreneurial on both the for-profit and nonprofit sides of the equation!
If you’re interested in reading more about entrepreneurs as philanthropists, you might enjoy specific topics such as making charity a habit, checking out a punch list of five ways to give back, and a few “oldie but goodie” perspectives that have stood the test of time.
By employing an entrepreneurial mindset, donors can envision and deploy their gifts as investments capable of helping charitable organizations scale to great success and make a real difference in the quality of life for the people they serve. The community foundation is always happy to discuss various ideas and strategies to leverage entrepreneurial principles in your charitable giving, whether or not a donor or fund holder is an entrepreneur. We appreciate the opportunity to work together!