Social entrepreneurship: How leaders are doing well by doing good
Corporate America’s capitalist rep has engendered a general distrust of large organizations as waste producers who underpay workers and exploit tax loopholes. But these philanthropy-minded startups that we met at TechWeek 2016 have found that shelling out funds for good deeds gets them ahead, even helping to nudge up their bottom line and retain top talent.
Meet the startup that gives its employee’s children a full-ride scholarship for college
When online wholesaler Boxed opened a warehouse in downtown Atlanta, Founder and CEO Chieh Huang discovered that many of his workers could not afford private transportation to and from work. His first instinct was to purchase or lease a car for every single employee. “The attorneys were like, ‘You’re not Oprah.’ And I was like, ‘OK, this is why people don’t like to talk to attorneys,” he laughed.
Instead, the businessman is famed for dipping into his own pocket to ensure his worker’s children receive a college education. The offer stands for all full-time warehouse workers, who are a stalwart of the company’s operations. Boxed delivers bulk products all over the US, functioning like an online version of big-box wholesalers like Costco. In early 2015, Huang announced that he would foot up to $20,000 of the bill to pay for employee’s weddings. He had recently been moved by a worker who was in distress because he could not afford to pay for his upcoming wedding as his paychecks were being used for a family member’s medical bills.
Huang argues that investing in fringe benefits is less costly in the long run than offering periodic raises or bonuses, and does more for morale and employee retention. “They are really loyal to the company now,” Chieh said of his workers, “and other folks now see that their employment with Box as a platform they can use to further stuff that they believe in.” To date, the three-and-a-half-year-old company has lost just five employees voluntarily.
This startup donates reading glasses to people in the developing world who can’t afford them
For every pair of glasses Warby Parker sells, the brand donates another pair to someone in the developing world who lives on less than $4 a day, in partnership with a nonprofit called VisionSpring. The eyewear brand’s cofounder, Jeff Raider, said there’s nothing like witnessing the moment when a person is able to see for the first time.
“These were amazing, life-changing moments that something as simple as a pair of reading glasses can do,” he said. Raider insisted that the far-reaching impact of selling eyeglasses exhilarates his employees, because they know that each time they make a sale, someone in need benefits. When each staff member celebrates their first work anniversary, Warby Parker sends them on a service trip to experience the moment for themselves when people can see for the first time.
This startup makes zero revenue but its founder donated 25% of his salary to charity
While Giphy has never generated any revenue, it remains a magnet for VC funds, and has a valuation of $300 million. The self-styled “Google for GIFs” search engine is the world’s largest distributor of GIFs, serving more than 25 billion of these split-second, stop-motion videos that can make people laugh, cry and interact with brands in ways no other form of advertising achieves. Last year, serial entrepreneur and Giphy founder Alex Chung, who has two other startups under his belt, says he donated 25 percent of his salary to charity, and says that if Giphy were to start generating revenue, he would donate 100 percent of the proceeds anyway.
“If it does happen and I do make any money off of Giphy, I’m following the Bill Gates pledge where almost all of it will go back into the community to help them support other entrepreneurs and people trying to invent change,” Chung said, adding that he grew up poor in Seattle and that anyone who is able to live in New York and afford the bare necessities of food, clothing and shelter should consider themselves lucky. “What else do you really need?”
Originally published at blogs.baruch.cuny.edu on November 21, 2016.