This post started off as a speech delivered at Capacity Canada’s 2018 AGM. Capacity Canada works to bring together the ideas, people and resources that fuel social innovation and build capabilities in our charitable sector.
Charities and non-profits are facing a very real problem: their donors aging and the donor rate is dropping.
While the average value of a donation has doubled here in Canada over the last 30 years, the actual number of donations has dropped by about a third. And the people who are contributing over 74% of donations are overwhelmingly folks aged 50 plus, according to a report from the Rideau Hall Foundation and Imagine Canada.
It’s not sustainable. If charities don’t change the way they engage donors, they face a crisis in funding. They must attract a new generation.
On the other hand, there’s the tech industry. It’s teeming with young talent and opportunity. The average CEO of a billion-dollar startup in North America is 39 years old, and the average employee working for them is 29.
Naturally, this leaves our not-for-profits asking some very good questions. Why doesn’t technology donate more? How do I get employees at tech companies to be better donors? Why don’t we have more connections with people working in the tech sector?
I don’t have the answers, but I can share some experiences about how social organizations can better understand these tech companies, and how tech companies can step up as partners and contributors.
We have more in common than you might think.
Tech companies understand the struggle of charities and non-profits because they’re facing the same issues too.
For the most part, they start from a similar motivation: a deep, burning passion to change the status quo for the better.
They, too, rely on a demographic that’s increasingly tapped out for funding. Angel Investors are aging just like donors are, and they’re the ones making the lion’s share of investment decisions.
They care about broader social issues that directly and indirectly impact their work, communities and employees. That includes gentrification, discrimination and underrepresentation, issues around LGTBQ and intersectionality, the environmental impact of their work – the list goes on.
Still, they struggle to contribute.
It’s not often discussed, but I want to be clear and transparent about the single biggest roadblock you’ll find in tech startups when it comes to donations: money.
Headlines often read, “Exciting new tech startup raises $5 million in funding.” It’s easy to see them and think, “these companies have the money – they’re choosing not to share it.” It’s easy to blame the issue on the greed of entrepreneurs. In reality, these investments come with strings attached. There are more expectations and increased pressure to deliver on them. Falling short is fatal for the business.
As well, those exciting new startups are typically losing money every single day. They may be pulling in an impressive-looking revenue, but if you look at their books you’ll usually find that they’re carrying a deficit. They pour their funds into their employees and marketing with little to no room for anything else.
When there is money available, it’s difficult to rationalize donations for a local charity when the audience for a company – their customers, investors or influencers in the market – aren’t local at all. The only local audience are their employees – and recruiting isn’t often a suitable reason for donations.
The employees, however, pose a different story. The median salaries in tech companies are high compared to not-for-profits. While they may not have large savings to donate from, their salaries often provide room to give. So the puzzle becomes: how to engage them?
Tech companies care a great deal about engaging employees, and it turns out charitable giving is a great way to accomplish that. We already see companies participating in food bank drives, Habitat for Humanity builds and other similar mainstay events, so it’s clear something is working.
We even have a few examples of tech companies and not-for-profits who have successfully partnered in new and exciting ways in our own backyard.
- Netsuite’s Slower Cooking for Faster Meals: It started with employees wanting to share their coding knowledge with the broader community. But when they reached out to local social organizations, they heard a different story about what the community really needed: a cooking program for marginalized people who don’t have the time, skills or means to cook (they typically opt for quick family dinners from fast food franchises). What ended up being most valuable was the employees’ capacity to buy the equipment and teach meal planning and preparation.
- Vidyard’s launch of Plugin: It was a confluence of two issues – getting staff engaged and creating a vibrant and inclusive downtown Kitchener – that sparked the beginning of Plugin. Started by the team at Vidyard, Plugin has a mission to bring tech professionals to the city’s core through events at local restaurants, theatres, event spaces and even abandoned buildings. Each event raises money for local charities and has the added benefit of making it easy for other companies to get involved and carry that social profit message.
- D2L CEO John Baker and his donation-matching challenge: When a CEO at a major tech company sends you a personal message inviting you to join him or her in making a contribution toward a very public campaign, you don’t just feel warm and fuzzy. You listen and you take action. John did just that with a pledge to raise $50,000 for an organization that supports injured veterans, with a promise to personally match what he raised. Challenges like this inspire others to push their boundaries, reflect on their own actions and see just how far they can take them.
- Tech4SickKids with SickKids Foundation: SickKids challenged tech companies to give $25 million for new, state-of-the-art spaces, people, and programs for the children’s hospital. They targeted the tech community specifically and invited companies to join their advisory council – so they weren’t just donors, but members as well. This gave leaders the opportunity to talk about the donation and the impact, which became sharable content that built an even bigger audience.
- The Upside Foundation and Pledge 1%: Pledge 1% asks companies to share 1% of their profit, equity, product or employee’s time, in any combination, to non-profits in their community. The Upside Foundation is a Canadian partner of Pledge 1% and challenged 150 companies to make donations in equity last year ahead of Canada’s 150th anniversary. Everybody who made a contribution was encouraged to share their pledge, and donors were also recognized on the Pledge 1% site, allowing them to amplify their exposure. Personally, I’m also thrilled to see so many of the local companies I know and support as members of the pledge: FunnelCake, Skritswap, Sametrica and GainX to point out a few.
You’ll see a trend in these programs when it comes to a partnership between social giving and tech: there’s more to tap into than a corporate chequebook. It’s about education and partnership. It’s also about finding new sources of donations, like gifts in equity, time and reach.
With that in mind, I challenge our not-for-profits, charities and tech companies to rewrite the rules of engagement together, as partners, and explore new models that can help employees get more engaged not only with their community but also with their employers.
After all, it’s not just enough to pay people well, to build a good product, to at least do no harm. We also need to make sure that we’re doing good and giving back.
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