* This story was commissioned by BizWest Magazine and was published December 1, 2017 *
Boulder, Colo. – A Boulder County organization claims a decade of success in getting startup businesses and entrepreneurs to focus on charitable giving.
According to Pledge 1% Colorado’s website, client contributions have totaled more than $5 million since 2007. Originally known as the Entrepreneur’s Foundation of Colorado (EFCO), it was renamed Pledge 1% Colorado in 2016 and became a program of Community Foundation Boulder County.
It was time to expand, explained Nicole Glaros, a current Pledge 1% Colorado adviser and former EFCO board member.
“The board thought we could do more,” said Glaros.
First, EFCO launched a global philanthropy initiative called Pledge 1%, which is now run by the San Francisco-based Tides Center. The local spinoff, Pledge 1% Colorado, is locally operated and offers several ways for member companies to give to nonprofits. They can pledge one percent of annual profits or equity, their products and services, and even employee volunteer time, to charitable organizations.
The organization now includes more than 100 Colorado companies.
Boulder-based entrepreneurial network Techstars is one of them. Glaros, Techstars Chief Innovation Officer, explained that the worldwide firm wants to help create a “cultural shift” by encouraging all companies to contribute to social causes.
According to Glaros, Techstars is in a position to evangelize this through its work with Pledge 1% Colorado.
“We have over 350 companies that go through a Techstars accelerator program each year, over 100,000 attendees at Startup Weekend, and thousands of mentors and Startup Week attendees.”
Techstars doesn’t require the companies it works with to contribute, but Glaros said they use their cultural values to convince others that giving back to communities is “a good thing to do.”
Seth Levine, co-founder of Boulder venture capital firm Foundry Group and a Pledge 1% Colorado adviser, said he’s motivated by helping businesses that are responsible to their customers, employees, and communities.
He believes such companies are more innovative and successful, no matter their product or service.
“I also believe that responsibility for creating a better world is something that can happen at all businesses,” he added. “Not as a side project or something that happens after your ‘core’ work is done, but rather in the actions your business takes every day.”
When firms join Pledge 1% Colorado’s network, they can choose several ways to contribute, and which nonprofits they want the money to benefit. Young companies can agree to pledge one percent of their company equity and/or annual profits. With equity, the option is liquidated when there’s an exit. Pledge 1% Colorado passes the proceeds directly to the charitable organization. Owners of more mature companies can pledge their personal equity, or any products and services that contribute to solving a social problem or support a nonprofit’s mission.
Companies of all ages can also commit to employee volunteerism. Techstars has an annual employee initiative called ‘give-back days,’ which, according to Glaros, is “a great opportunity for our staff to spend a day volunteering with an area nonprofit.”
Both Levine and Glaros stressed that the desire to be a part of a network of socially responsible entrepreneurs must start at the top.
“For a long time I’ve been fascinated by the intersection between entrepreneurship and social change,” said Levine. “When I say that I’m not describing social entrepreneurship – it’s not a subset of entrepreneurship – it’s simply entrepreneurship, or impact investing.”
Levine noted that the Foundry Group’s founders agreed on an early set of core principles that included charitable giving. It also extended to a rule that, in its current form, is known by the hashtag#givefirst, something he developed along with Techstars.
Glaros agreed, adding that#givefirst is a core value at Techstars.
“It’s written on the walls of our offices, our employees tweet it out, it’s in almost everything we say and do,” she said.
While such thinking may have to be embedded with the company’s founders, executives, and boards of directors, the end result has a wide-ranging effect.
“It’s great for the community,” Glaros said, “because it creates jobs, builds sustainable companies, and can help pass down ethical best practices. Social impact is something we look for in our hires, it’s weaved into our daily language, we focus real time and capital resources to social impact. I would say it’s a critical part of the engine that makes Techstars go.”
Added Levine, “All businesses, regardless of the product or service they produce, can work to create positive change in their communities, including with their employees, vendors and partners.”