“New evidence that giving it away helps generate commercial success”

by Daniel Batten on March 5, 2010

Have you ever wondered what the relationship is between wealth-creation and philanthropy? Sure you can’t do philanthropy with at least some wealth. But what if the opposite were also true; that doing philanthropy helped you create wealth?

Three years ago, I started researching the relationship between philanthropy and wealth. I looked at a cross-section of books on wealth creation. Without exception, they all talked of the critical importance of giving. The act of giving they reported made manifestation more likely to occur.

Then I remembered how we had generated wealth by giving at one of my companies without me even realising that was what we were consciously doing. When I was CEO of Biomatters, we created a software product for molecular biologists. We had a free version and a version you bought (like Quicktime). The free version had been wildly successful and gone to the top of Apple.com worldwide.  When the “to buy” version was released we decided that we would donate 10% of the company’s revenue in one month to a cause voted by the end-users.

We got a huge response. However I also faced opposition from a fellow-directors. It was pointed out that even Ben and Jerrys only gave 5% of profit, and there was no precedent for a company early in its growth giving away part of its hard-won revenue. Being a “pitching expert”, I was thankfully able to convince the board to trial the plan. The amount of good-will we generated from end-users was huge.

Our ‘to buy’ version became very successful and went on to be distributed into 24 countries in the next four months. I have no doubt we would have achieved this anyway, but I believe that benevolent action helped us get there faster. It made our team tighter, it defined one of our core and solid values, and it attracted many others with shared core values that they were relieved to see another entity, a commercial enterprise no less, reflect back to them.

So even in a commercial context, in fact especially in a commercial context when you give more you tend to get back more. Your bean-counters may challenge you. That’s simply a test of your resolve. Its also your opportunity to practice being very good at pitching to them.

You may even show them this article as one piece of many pieces of evidence that when you do the right thing, it pays back in spades.

{ 1 comment… read it below or add one }

George March 7, 2010 at 7:55 am

I love it. That makes so much sense, and there are so many worthy but underfunded causes!

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