Tech firms need to apply innovation to charitable giving
Re-post from The Record:
Our charitable sector is on a collision course with inexorable trends in demographics and giving. Three-quarters of Canadian donations are made by people aged 50 and over. This donor population is shrinking and donation levels are dropping across all age categories.
As former Governor General David Johnston said earlier this year: Charities must innovate to attract a new generation of donors.
We believe it's time technology companies stepped up and made this easier, and we're not alone.
An admirable few are already making progress. Some have partnered with such groups as the Upside Foundation of Canada and Founders Pledge to donate equity. Others are working with groups like Plugin to connect with their communities.
While commendable, these efforts don't fully address the urgent challenges of the charitable sector. We need to do more.
While some blame the lack of donations on the greed of technology entrepreneurs, the fact is most technology companies are cash-poor and their customers aren't local. While a local business might justify a donation to the local symphony as "advertising," that rationale does not apply when your customers are primarily abroad.
While some companies eventually grow into profitability, a typical software company that announces a $5-million investment round may very well be losing upward of $2 million every year. And it's difficult to develop a philanthropic culture when technology companies have notoriously short lifespans. The average age of a company listed on the S&P 500 index has fallen from almost 60 years in the 1950s to less than 20 years today, and technology companies now make up 43 per cent of the Fortune 500, but comprise only 15 per cent of the most charitable.
Not only are technology companies poor at donating, they are also supplanting traditional businesses that had more robust histories of philanthropy.
We founded Kiite with a promise to break the mould. That's why we recently launched a new program, the Kiite Community Fund, with the hope to inspire others to do the same. The fund is an endowment established with a donation from Kiite and will grow with ongoing contributions from the company and our employees.
Since tech employees earn larger-than-average salaries, we realized a payroll giving program held the greatest potential to make a real impact. Every Kiite employee can opt in or out at any point. This gives them the flexibility to contribute when they're able and withdraw when they need or want to. We talk openly about the program and encourage people to participate, but doing so is optional and anonymous, because an inclusive space is one where every individual has the power to make choices in their own best interests.
We already have more than 80 per cent of our employees participating.
When technology companies get involved with local charities, they are often accused of volunteer tourism, whitewashing or of turning a deaf ear to the needs of the broader community. One possible reason is that we haven't always listened to those speaking up.
To counteract this, we partnered with the Kitchener Waterloo Community Foundation, whose ongoing education and guidance will help our employees to become better donors, and give our granting committee insights into the needs of our community. We're learning from the best about how we can better support our entire community.
While we could have partnered with any number of charities, we believe in sustainability, and the community foundation will help us do more good, forever. With their help, all donations will be invested in an endowment which donates, at minimum, four per cent of the asset base annually. This means our donations will continue to benefit the community in perpetuity, regardless of our company's growth or evolution.
We believe so strongly in this model that we made a significant personal donation toward the KWCF, are honoured to contribute regularly through our automated payroll giving program, and are personally matching a portion of our team's first-year donations.
We believe in a shared future, so we're invested in bolstering a vibrant giving sector. It's thrilling to work with an organization as impactful as the Kitchener Waterloo Community Foundation, and we're proud of the work our team has put into designing a giving program that is scalable, easy to implement and that engages employees in important ways.
We've spoken with many founders who don't know how to best step into charitable sector initiatives because they can be complex and intimidating. Humanity's needs run deep, and the responsibilities of running businesses are onerous. That's why we are sharing our experience and inviting other technology companies to join us in doing more good, together.
Joseph Fung and Donna Litt are the co-founders of Kiite Inc., based in Waterloo.