Why leverage your profit (or revenue) for impact?
It’s good for the world.
Businesses hold significant influence and capacity to address global challenges that governments and nonprofits cannot solve alone. With your resources, culture of innovation, and reach, companies like yours can drive scalable solutions to issues like climate change, inequality, and access to education. Pledging 1% of profit to social impact is a powerful way for a company to align profit with purpose, driving both business success and meaningful change.
It’s good for business.
Leveraging your company's resources to be a force for good isn't just good karma; it’s smart business. Beyond moral responsibility, there is a growing mandate from consumers, employees, and investors for companies to act as stewards of positive change. Study after study has shown that a commitment to doing good builds customer and investor trust, differentiates your company in a crowded market, turns casual customers into loyal fans, and helps you attract and keep top talent (don’t take our word for it, check out the data).
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But that's not all. There are also practical perks like tax benefits, positive PR, and long-term financial gains.
By contributing to societal good, businesses don't just make a difference—they thrive. In today’s purpose-driven economy – doing good means doing well.
What is a “profit” pledge?
The Pledge 1% profit pledge offers a versatile framework for organizations of any size or industry to launch and sustain impactful social responsibility initiatives. More accurately described as a commitment of some percentage of annual profit or revenue (we recommend 1%, but some companies do more and some do less), it provides the flexibility to allocate financial resources from overall earnings or from a specific product or service.
The profit pledge will look different depending on your company size, stage, and capacity to give back. Many companies in the Pledge 1% community are not yet profitable, and may not be for years to come. If this is true for your company, you can still have an impact, even if you’re not able to give 1% of your net profits. Would a percentage of your revenue be more applicable? Or donating a percent of profit or revenue from a specific product? If you are in venture capital or in financial services, could your firm think about contributing a percentage of your carry or management fees?
Whether your business is just starting or well-established, this pledge enables you to invest a portion of your success into creating meaningful change, demonstrating that even small actions can drive significant social impact in our interconnected world.
Is the profit pledge right for your company?
The profit pledge offers an accessible starting point for companies of all sizes and stages looking to invest in social impact. This approach allows your organization to reap the benefits of being purpose-driven—such as increased employee engagement, stronger customer loyalty, and greater investor appeal—while maintaining the flexibility to scale contributions in line with financial performance, ensuring long-term sustainability. As your company grows, so does its capacity to make a difference, creating a compounding and lasting impact on the communities you serve.
We’ve seen the profit pledge work well with:
- LLCs
- S-Corporations or C-Corporations
- Benefit Corporations
- Small or family-owned businesses
- Brick and mortar businesses
- Finance or law firms
- Service provider companies
Types of Profit Donations
% of profit
In a typical profit pledge, companies distribute 1% of GAAP profit to nonprofits or a charitable funding vehicle, like a donor-advised fund (DAF), quarterly or annually. We often see this pledge type paired with the 1% equity pledge, where the philanthropic entity or fund has already been resourced by 1% of shares.
Harry's is an American company that manufactures and sells shaving equipment and men's personal care products via online and retail channels. The company is known for their subscription service where customers receive new razor blades, shaving cream, and other grooming products by mail.
The company also has a strong emphasis on social impact. Initially, Harry's operated on a buy-one-donate-one model.. By the end of 2013, the model evolved to donating 1% of sales and encouraging employees to contribute 1% of their time to charitable causes.
In 2021, it launched an initiative called Open Minds, which is a $5 million program in partnership with Futures Without Violence, National Council for Mental Wellbeing and Big Brothers Big Sisters of America designed to reach more than a million people in
its first three years. 
- Harry’s razors — 1% of sales supports mental health services for men with a particular focus on young men and boys, Black men, Veterans and LGBTQ folks.
- Flamingo razors — 1% of sales supports nonprofits that focus on helping women to build healthy, positive relationships with themselves.
Since its inception, Harry's has donated over $12.5 million to nonprofit organizations focused on mental health, reaching over 2 million men. The company allocates 1% of sales to charitable organizations and provides employees with five days of paid time off to volunteer with registered nonprofits.
Learn more about Harry’s Social Mission.
% of revenue
The 1% revenue pledge is often a more accessible starting point for companies looking to build their social impact initiatives. Instead of dedicating 1% of all sales, this approach focuses on allocating a percentage of gross revenue, factoring in the operational costs tied to delivering the company’s core goods or services. This flexibility makes it easier for businesses to integrate the pledge into their financial strategies while still making a meaningful contribution to social impact efforts.
% of specific product profit or revenue
The 1% of profit or revenue from a specific product or service is another creative option we’re seeing companies pursue. This option can be a good entry point for companies looking to get started and later expand on their profit or revenue pledge.
Box.org is the social impact arm of Box, the leading Content Cloud that enables organizations to accelerate business processes, power workplace collaboration, and protect their most valuable information, all while working with a best-of-breed enterprise IT stack. Box.org leverages resources from the Box community to drive positive social outcomes. The more missions we power with our Content Cloud, the more we invest back into capacity-building for nonprofits.
% of nonprofit revenue
Box heavily discounts its products to nonprofits at a rate of 50-100% off, depending on the size of the nonprofit. A percentage of the net new revenue from those discounted nonprofit sales is then contributed to Box’s donor-advised fund (DAF) at Tides. This enables their social impact program to be sustainable, continue offering the service to nonprofits, and further help nonprofits meet their missions.
Nonprofit organizations go through the same sales process as commercial clients, and are distributed across several hundreds of account executives throughout the company who are knowledgeable about the nonprofit offerings, discounting capabilities, and the nonprofit customer journey.
% of VC carry or management fees
For several pioneering venture capital firms and asset managers, the 1% carried interest model has proven especially impactful. Carried interest is a share of the profits of an investment paid to the investment manager in excess of the amount that the manager contributes to the partnership, specifically in alternative investments i.e., private equity and hedge funds. It is a performance fee rewarding the manager for enhancing performance.
How it works:
There are two traditional ways that a fund would do a carry pledge:
- Write your pledge into the operating documents when you close on the creation of the fund. For example, if 80% of your dollars are going back to the LPs and 20% is being funneled back into the fund itself, the fund would decide to set aside 1% of that 20%. This would then go into a DAF or foundation, or could be gifted directly to nonprofits each year.
- Through Employee Participation Points: This is predominantly the model for larger funds, and falls into the “shadow carry.” For example, of the 20% that goes back into the fund, a vast majority goes to the Partners, but a small percentage goes to the employees via a “shadow carry.” You can think of this like a fake Partner account that then gets distributed to the employees. A part of this “shadow carry” is set aside for social impact, and likely placed into a DAF.
Investment-Linked Funding: As a venture capital firm, Westbound Equity Partners invests in high-growth startups and companies that have the potential to scale. A percentage of the returns from these investments is funneled into the Westbound Foundation, creating a self-sustaining funding mechanism. By using the profits from high-growth, impact-driven startups within its investment portfolio, the foundation ensures a consistent and scalable stream of funding, allowing it to tackle some of the world's most pressing issues.
In addition to funding, Westbound Foundation emphasizes transparency and impact measurement to ensure accountability and effectiveness. The foundation tracks and reports on the outcomes of its initiatives, allowing both investors and stakeholders to assess the tangible benefits of their contributions. The foundation also encourages employee engagement, offering opportunities for staff to volunteer and participate in projects, while creating a community-driven approach to creating lasting social change. Through this model, Westbound Capital is able to align its financial success with its dedication to making a positive impact on society.
Equity vs Profit Pledge
With so many pledge options to choose from, it can be challenging to determine the best fit for your organization. Here are a few factors to consider when evaluating a profit and equity pledge:
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Profit Pledge |
Equity Pledge |
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Common misconceptions about the Profit Pledge
“We can’t donate yet because we don’t make a profit”
There are a few different ways to donate profit. If you don’t currently have profits yet as a company, you could consider donating a portion of revenue, or a portion of a specific product or service’s sales.
“It’s too early to commit, it’s not enough to matter”
Your profit is not so small that it doesn’t matter. Even if you’re granting less than $10,000 per year, you’re building the internal capacity, skills, and resourcing to grow effectively so that you don’t have to start from zero at a later stage. When focused and strategic, small grants can drive big outcomes.
“The profit pledge needs to be a full 1% of profit”
If you don’t feel like 1% is the right amount for your organization, start smaller and give what feels best for your current capacity. You can pair this with other pledge types like a product donation or discount, an equity pledge, or employee time, to help make your pledge more impactful.
“We’re a public company - it’s too late to donate profit”
While it is much easier for a company to dedicate a portion of profit or revenue in its earlier days, it is not too late to donate when you are a much larger or public company. In fact, public companies are under increasing pressure to balance shareholder returns with societal contributions, and a profit pledge provides a transparent, measurable way to show you are using their success to address global challenges. Additionally, it fosters employee engagement and loyalty by reinforcing a purpose-driven culture.
Once you have decided that a profit pledge might be a good fit for your company, you will want to determine how best to integrate your profit pledge into your company’s operations, set clear goals, measure impact, and communicate your efforts effectively.
Alicia_Schmidt
VP, Member Impact, Pledge 1%