The rise of entrepreneurial charity in small business

Charity is changing, and corporate philanthropy is changing with it.

In the old days businesses would grant money to charities that matched their philosophies. When it ran out they would go back to the same businesses looking for more money and so the cycle would continue.

However, in an increasingly competitive market that approach is unsustainable. Businesses, especially small businesses, simply do not have the funds to continually top up “good causes”. And so, a new model of self-sufficient “social businesses” has emerged.

Many of these charities are led by entrepreneurial millennials with visionary ideas but a lack of funds. Mirroring the start-up culture of Silicon Valley, these social entrepreneurs are seeking early stage ‘investors’ and pitching for funding to start and grow small businesses, albeit with a charitable bent.

A good example of this idea of combining charity and capitalism is Melbourne’s Who Gives a Crap toilet paper. The brand gives half of all profits to needy communities to help build toilets and sanitation systems.

In some ways, this model is as old as time. Monasteries started microbreweries and organic farmer’s markets long before the hipsters of Newtown and Brunswick hit on the idea. The funds raised helped them to perform charitable acts and remain, partially, independent from Rome.

One example of a company matching the way it gives to meet this new entrepreneurial reality is our business software company, Sage. Through the Sage Foundation, the company has established a global “Enterprise Fund” with the specific aim of funding charitable small businesses with long-term self-sufficiency in mind.

The Fund acts almost like a venture capitalist for charities. The Foundation announces funding rounds and then takes applications from ambitious charities and businesses.

One example of the type of charity the company is supporting is Western Australia’s Dismantle.

Based out of a series of shipping containers near the Fremantle foreshore, Dismantle looks like any ordinary trendy coffee shop come bike store; but there is a deeper purpose at work. Many of the baristas here are at risk youth or might even be on day release from prison. They are being trained with skills that will create a pathway to future employment.

Next door, another container offers workshops on bike maintenance, teaching new skills and providing a setting for discussions around mental health and goal setting. The money raised from the coffee shop directly funds the workshop.

We helped to get Dismantle’s café running by purchasing a professional coffee machine. It’s employees then worked alongside the Dismantle team to paint the containers and build decks for customer seating. Sage’s Perth sales team now schedule business meetings at Dismantle, introducing paying customers and building awareness for its work.

Skilling-up social entrepreneurs

Another example of the non-profit sector taking a playbook from Silicon Valley is in training. Realising that good intentions alone don’t grow social-businesses, and that leadership development is critical, one project known as The Growth Project offers an MBA style yearlong training program that uses corporate executives as mentors and encourages networking and sharing between alumni. It’s the charitable equivalent of a Stanford MBA.

Similarly, The Funding Network (TFN) used a grant to help it deliver specialist pitch-coaching workshops for non-profits. These workshops equip the participants with the skills and techniques they need to pitch their stories to potential ‘investors’.

Perhaps most importantly of all consumers are embracing the change by talking with their wallets. After all, wouldn’t we all prefer to buy a coffee or toilet paper to change the world rather than simply dropping another coin in a bucket?

Rebecca Harris, Regional Manager, Sage Foundation

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