Unit 6: Maximize your impact

[Alicia_Schmidt]

After you have made your equity pledge, you will want to consider 5 key strategies to maximize your impact, including: 

1.  Hire an amazing social impact leader

“One of the most common mistakes companies make is to bring on someone too junior.  Find a leader who can drive your strategy and make things happen.  Ideally, your Head of Social Impact should report to the CEO." -Suzanne DiBianca Chief Impact Officer & EVP of Corporate Relations, Salesforce Co-Founder, Pledge 1%

Late stage or close to IPO

Earlier in your company’s evolution

We suggest that you hire (or designate) a senior leader, ideally at least 6 months before your IPO. A common title for this role is Executive Director of XXX Impact (i.e. DocuSign Impact) or XXX.org. (i.e. Twilio.org).  A very senior hire might come in as Chief Philanthropy Officer.  Most of these individuals report directly to the CEO or an executive sponsor such as a co-founder, CPO, COO, or CMO. The ideal candidate will be able to develop the strategy for your social impact and drive execution. He/she should connect well at all levels and be a master at rallying both people and resources across your company.   Your social impact team size will likely grow post IPO. We recommend that you start with your leader first.

This role could be a passionate team member, take up 25% of an existing team member’s time, or even a responsibility or function shared across a few people (i.e. 30% of 3 people’s time).   If it is a portion of a role, or shared across a few people, we strongly suggest this is formally built into their OKRs and/or goals and performance evaluations.   For many early-stage companies, the CEO and/or co-founder wants to be directly involved as both the “Executive Sponsor” and the Pledge Jedi (Head of Social Impact).  He/she may leverage an executive assistant or junior team member to support his/her efforts. This can work as well. However, as you grow, we suggest that you get some designated help. Otherwise, your social impact commitment might drop to the bottom of your list as you’re building your company.

2.   Combine pledge types:  equity + profit+ time + product

“One of our key values at Twilio is to empower others. We started Twilio.org to empower nonprofits and social enterprises with communications technology to improve lives around the world.  Today, we’re able to ignite positive social change on a global scale by leveraging not only the funding made possible through our 1% equity commitment, but also the full power of the Twilio product platform coupled with technical and strategic support from our passionate employees and our developer network.” - Jeff Lawson Co-Founder & CEO, Twilio

The true magic comes when companies blend pledge types and get creative about leveraging multiple assets. We recommend that you even think beyond equity, profit, product, and time to your other assets i.e. partner network, voice, influence within your region/sector/etc. Get your employees engaged in this effort. 

For example, as a result of employee input and engagement, Pledge 1% member Postmates, is leveraging their merchant network, technology platform, and courier base to tackle food insecurity. In 2019, they piloted FoodFight!, a program which picks up excess food from restaurants at the end of the day and delivers it via Postmates couriers to nonprofit partners who distribute it to those in need.  This program, which leverages a time and product pledge, delivered over 100,000 pounds of food (that would have otherwise been wasted) in its first few months. In 2020, Postmates is expanding this program to all of its markets and looking to partner with other Pledge 1% members on broader issues around hunger. 

Don’t wait to get started.

Since an exit may be several years away, many companies engage employees around time and product pledges long before a liquidity event that transforms their equity pledge into their social impact fund. 

3. Plan for at least 2 sources of social impact funding 

“At Atlassian, in addition to pledging 1% of equity and 1% of profit for social impact, we decided to donate to Room to Read the revenues from our Starter Licenses, which allowed our customers to have 10 users for $10. When we made this decision, we had no real insight into how much this would raise for Room to Read. Not only did this pledge strengthen our relationship with our customers, but as a result of this program and our profit pledge, we were also able to donate over $6 million to Room to Read before our IPO.  Today, the Atlassian Foundation is very well resourced. The Foundation has benefited from the substantial appreciation in the price of Atlassian shares since our IPO in 2015. Its annual funding sources include income from a diversified portfolio of investments, the proceeds from gradual sale of part of its shareholding in Atlassian, 1% of our profits and all revenues from our Starter Licenses. We are also exploring the creation of new recurring funding sources for the Foundation.”  -Scott Farquhar Co-Founder, Atlassian

Integrate social impact into your annual budget.

Most Pledge 1% companies have an operating budget for social impact in addition to their equity set aside. In fact, in addition to the direct funding for social impact in their annual budgets, quite often, the Social Impact team will partner with other departments i.e. HR (talent recruitment & retention), Marketing, Customer Success, etc. to leverage their budgets to fund employee and partner/customer engagement activities as well as PR & sponsorships that strengthen their brands. 

For early-stage companies, this budget allocation could be as simple as the funds to support the integration of some sort of volunteer activity (likely coupled with refreshments) at a quarterly or annual all hands meeting.  Growth stage companies often integrate a volunteer activity into their employee onboarding.  Most post-IPO Pledge 1% companies have an annual budget of $1+ million for social impact staff & employee engagement activities in addition to their grant-making dollars.  It’s important to note that funds put into a corporate donor-advised fund (DAF) or foundation as a result of an equity pledge, cannot,  in most cases, be used to fund social impact staff or nonprofit sponsorships perceived to directly benefit the company.

Often, even employee matching programs are funded out of HR (as an employee benefit) or another budget pool other than the corporate DAF. 

Identify revenue streams to sustain your social impact.

Several Pledge 1% companies, such as Twilio and Pluralsight, direct revenue and/or profits from sales to nonprofit and/or higher education customers back to their social impact fund. Contact Pledge 1% to learn more about this social enterprise approach. Others, like Atlassian and Appfire, donate a percentage of profits overall and/or profits or revenue from a specific product line to fund their social impact activities.

4. Fund your social impact pre-liquidity 

“At Lookout, each of our co-founders as well as our CEO contributed cash (in addition to our personal equity commitment) to seed our social impact activities.  Our employees are passionate about changing the world.  This is a core part of our Lookout corporate culture. We recognized that even though a liquidity event could be years away, we didn’t want to wait to make the community a key stakeholder in our business, and empower our employees to give back." - John Hering Co-Founder & Executive Chairman, Lookout

Keep your employees inspired and engaged.

Employees want to work for companies where profits and purpose are intertwined. Profit and purpose are no longer in conflict.  As discussed earlier, giving back is BOTH the right thing to do for the world and the smart thing to do for your company, especially when it comes to attracting and retaining top talent. 

Many late-stage companies are staying private longer. If you’re company is doing well, and you’re at a stage where you’re investing in other employee benefits (food, employee team events, wellness benefits, etc) to engage your team, this would be a good time to also think seriously about how you are giving back as a company and supporting your team members in giving back as well. As you evolve into a growth or late-stage company, your employees will expect this of you. 

Provide some seed funding for your social impact grants.

As discussed on the prior page, this funding can come directly from your annual operating budget.  You’re social impact can also be supplemented and/or seeded by individuals, i.e. founders, as was the case for Lookout as well as many smaller Pledge 1% members such as Appfire.  

We recommend you engage your team in determining where the grant dollars go. It doesn’t have to be a huge amount of money.  A little bit can go a long way especially when also coupled with employee expertise and your product.   

5. Be a leader in the movement - pledge it forward!

“ Working with Pledge 1% to help other CEOs set aside equity is one of the most impactful uses of my time. Personally, I’d like to ignite $1 Billion of new philanthropy. And we’re definitely on our way! At SendGrid, we were fortunate that I happened to have lunch with Jeff Lawson shortly before we filed our S-1. Had we not had lunch, I wouldn't have thought it was possible to take the pledge so close to our IPO. We want to systematize that playbook for all late stage CEOs and take “chance” out of the equation. As a founding member of Pledge 1%’s Global Visionary Council (GVC), I’m working alongside other leaders to “systematize this serendipity” and make this the new normal for business. Twilio and Twilio SendGrid are also proud Pledge 1% “Builders” (an invite only premium program for top Pledge 1% companies who invest time and funding to build the Pledge 1% movement). Pledge 1% is a HUGE force multiplier. I want to invite and encourage YOU to join us as leaders in the movement. It’s your turn to inspire and empower other CEOs and redefine normal for our sector.”  - Sameer Dholakia, Partner, Bessemer Venture Partners  Former CEO, Twilio SendGrid

The “PLEDGE-IT-FORWARD” Ethos

Movements are about people.  Change happens when coalitions are too big to ignore.  

At Pledge 1%, we ask our every member to ask themselves:

What are YOU doing to invite, encourage, and empower others (customers, employees, peers, suppliers, partners) to join Pledge 1% and leverage their own unique assets for good?  

CEO/Founder leadership opportunities

Please contact us to learn more. 

Examples: 

• Co-host a CEO Roundtable and/or participate as a Pledge 1% advocate 
• Present at your VC, accelerator, or bank’s CEO summit (or your own user conference)
• Personally reach out to 1-3 of your CEO/Founder peers and encourage them to join Pledge 1% 
• Incorporate Pledge 1% into your keynotes and industry talking points and/or press interviews 
• Let us know if you’re interested in our Global Visionary Council.
• Encourage your Board and investors to become Pledge 1% Boardroom allies
  
  

Company leadership opportunities:

• Announce your Pledge 1% program.  Leverage Pledge 1% for support on your marketing/roll out.
• Integrate Pledge 1% into your hiring, onboarding, and web presence (crunchbase, linkedin, etc)
• Integrate Pledge 1% into your user conference (celebrate impact of partners and customers)
• Apply to become a Pledge 1% Builder