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Previously, the old business model meant you worked hard your entire life and philanthropy was something you considered when you left the business. Millennials have completely reversed this trend, by mixing work and philanthropy to create a new style of business or social entrepreneurship.
According to our Essence of Enterprise
research, 69 per cent of millennial entrepreneurs say that having a positive economic impact was a factor in their decision to go into business, with 59 per cent saying they wanted to have a positive impact in their community.
Over the past decade we’ve seen corporations make philanthropy a key component of business, but recently we’ve seen companies make philanthropy their business. Driven by a new generation of leaders, business models such as the one-four-one are becoming more and more common.
The one-four-one model implies that corporations donate a good or service for each one bought. In California, a company records the number of reading glasses they sell per month and donate enough for its non-profit partner to source and distribute the same number of glasses to those in need. Another US based company actually takes the process one step further: for every pair of shoes it sells, it donates a pair to children in need, but to have an even greater positive impact, they also help local shoemakers to produce their shoes, thereby helping small businesses and the economy.
An increasing number of start-ups are also signing up to the 1 per cent pledge, allowing them to pledge 1 per cent of staff time, products and equity. Companies can commit to pledging company equity, make an immediate equity grant or earmark equity in advance of an exit. Not only does this ensure businesses give back to their communities, but it also helps attract talent. 56 per cent of millennials say they would never work for an organisation they don’t believe in. To date, over 700 companies have signed-up to Pledge 1 per cent.
These are only some examples of the ways philanthropy is evolving and changing the nature of business. In our new podcast, Russell Prior, Head of Philanthropy EMEA for HSBC Private Bank, discusses some of the new trends he’s observed in his daily work with next generation philanthropists.