In writing the Pledge 1% CEO Equity Playbook and Companion Guide. I interviewed Mark Nasiff, COO & CFO of Lookout, and Presid... I've been lucky enough to work with Lookout as an Executive Advisor for the past year. Lookout, a 600-person global cybersecurity firm, exemplifies the model Pledge 1% member company in so many ways. Their founder-and-corporate equity pledge funds a separate foundation that issues grants to nonprofits as well as engages employees in volunteer activities.
Any companies looking to expand their social impact program or donate equity should consider taking note of Lookout's employee-led philanthropy approach.
Watch our full AMA below with Lookout CFO & COO and Lookout Foundation Presidentt Mark Nastiff and Brenley Brotman, Lookout's VP Global Recruiting and the Lookout Foundation Chair. You may also read on for a recap. For more about Lookout's equity approach, read their case study in our CEO Equity Playbook (Note: you must be a Pledge 1% member to access the playbook. To join, take the pledge today!).
Video and Recap
Lookout's Approach: Start with Employees
From the day that Lookout started their social impact initiative in 2015, they have committed themselves to an employee-led initiative.
What does that mean? Rather than impose a larger agenda onto the team, Lookout works hard to ensure that their employees are the driving force behind their equity, time, profit, and product pledges. Specifically, Lookout practices the following:
This recap also explores the lessons that Lookout learned growing their social impact program: start small, pick specific cause areas, and reach out to other companies that have done programs that you admire.
A Hybrid Equity Approach: A Foundation with Executive and Corporate Equity
While many companies choose to donate either executive or corporate equity, Lookout decided to source their 1% equity from both and start a separate 501(c)3 foundation.
Equity Source: CEO, Founder, and Corporate
Nastiff explains that the new CEO and the original founders were so committed to giving back that they donated personal equity and assets to fund the program initially. This initial commitment showed that leadership was personally invested in this initiative, and modeled a culture of social impact.
This first step encouraged the Board of Directors to support the company's pledge a portion of corporate equity. The shares were donated using the distributed model, which means that a portion of equity is donated over time versus all upfront. In this case, Lookout chose to donate corporate equity in 20% portions over 5 years.
Foundation vs. Donor-Advised Fund (DAF)
Lookout decided to create their own foundation instead of donating to a DAF. While a DAF may take less time to set up in the short term, Nastiff felt that establishing a foundation would be more beneficial in the long-term and allow them to have more knowledge and control of fund distribution. The Lookout Foundation is an entirely separate 501(c)3 public charity. Many companies that choose to establish their own foundation, choose to create a private foundation vs a public charity. The main differences between the two are that with a public charity, there are slightly fewer administrative requirements over grant-making, but at least one third of the organization’s must come from separate sources. As the nuances are subtle, you must consult your company’s tax advisors in choosing the correct corporate model for your company.
Additional Resources Around Equity
Making an equity donation involves many considerations: equity source, upfront or distributed sales, DAF or foundation, taxes, and dilution. Our CEO Equity Playbook walks you through them all — and features a Lookout case study! (Note: you must be a Pledge 1% member to access the playbook. To join, take the pledge today!)
For a quick overview, read our 101 equity donation article.
Employee Engagement: Social Impact Board, Local Chapters, and Issue-Specific Sub-committees
Many companies struggle to engage employees in their social initiatives. Lookout addresses this challenge by supporting employee involvement with organizations from local chapters to company-wide groups.
Local Chapters, Local Causes
With offices around the USA, Canada, EMEA and APAC, it's hard for employees to feel connected to just one global nonprofit. Lookout's social efforts enlist teams from each office to pick local nonprofits to support within the company's three cause areas (Women & STEM, Internet Freedom & Privacy, Supporting Black and Underrepresented Communities). These chapters manage the relationship with nonprofits and help employees feel more connected on the ground.
Employee-led Foundation Board
To ensure one unified vision, Lookout also has a Foundation Board. This Board consists of individuals across locations, divisions, and leadership levels. Even better? Every year, the members of the Foundation Board rotate off, giving new employees a chance to get involved. This Board researches local and global nonprofits to support and decides how to distribute funds.
Additional Resources Around Volunteering Across Locations
Many companies with employees in different locations participate in virtual volunteering. Read our Virtual Volunteering Playbook for case studies on how top tech companies implement remote initiatives. (Note: you must be a Pledge 1% member to access the playbook. To join, take the pledge today!)
You can also read a quick Virtual Volunteering 101 article.
Volunteer Time-off (VTO) and Donation Matching
Many employees may have interests outside of Lookout's three cause areas (Women & STEM, Internet Freedom & Privacy, Supporting Black and Underrepresented Communities). Lookout supports individuals in choosing their own ways to give back through a generous VTO and donation matching policy.
VTO and Donation Matching
Every year, each employee receives 3 paid days off to volunteer (aka 3 VTO days). Employees may also have any nonprofit donations up to $1,000 per year per employee matched by Lookout. Note that many companies start with a matching program closer to $250. Lookout uses Causecast as their donation matching platform. The software pre-verifies nonprofits so that companies can know that any organization receiving donations is a verified nonprofit. This approach enables employees to create campaigns to encourage their colleagues to join them in supporting the organization of their choice
Employee Recruiting and Retention
As VP of Global Recruiting, Brotman emphasized how crucial these social impact efforts are for attracting and retaining employees. This fact is especially relevant in a time where many people are leaving their companies or job-hopping at record-high rates.
Lookout's Advice: Lessons Learned
Brotman was gracious enough to share some of the lessons that Lookout has learned from their various social impact efforts.
Don't Be Afraid to Reach Out
Brotman was the first to admit that Lookout is full of cybersecurity experts first rather than philanthropic ones. So when it came to managing the Lookout Foundation, she reached out to philanthropic experts and companies that had executed similar models for advice.
When the Lookout Foundation first started, their energy and enthusiasm led them to saying yes to almost anything. They dedicated themselves to all sorts of employee-selected causes, disaster relief, and various partnerships. After realizing that this model was unsustainable, they focused their energies on three cause areas that were particularly relevant to their industry (Women & STEM, Internet Freedom & Privacy, Supporting Black and Underrepresented Communities).
These smaller, focused efforts soon grew into projects with a larger impact. One event in California involved recruiting 25 female college students to a day of cybersecurity workshops. As the company continued the effort, this "Day of Shecurity" conference has grown to 2,000 attendees across 50 countries.
The lesson here is that even small efforts can grow to make a huge impact.
Have questions for Lookout?
We want to hear them! Ask them in the comments below. Feel free to share stories or resources that you've found helpful in your social impact journey.