9 ms·

Introducing 1% of Nothing

113 points by mirceagoia 15y ago

mirceagoia 15y ago
I think it's a very good idea. Not only people can donate, but now startups can too.
kalvin 15y ago
Does anyone have more information about this? Saw this last year, thought it was a cool idea (with a great name!), haven't heard a peep since. It's like asking frequent lottery ticket buyers to promise 1% of their future winnings for charity. Easy sell, though most people would probably end up giving that much anyway. It should be 10% of nothing, really...
- mirceagoia 15y ago
  Shervin Pishevar has more info, as he is one of the initiators. Here's more info as well: http://www.hunterwalk.com/2012/04/1-of-nothing-is-something-how-angellist.html http://www.hunterwalk.com/2012/04/1-of-nothing-is-something-... --------- If you’d like to know more or understand more please get in touch with us. You can tweet us or you can email us at “info [at] 1percentof [dot] org”. ---------
jyothi 15y ago
A sudden burst of donation for a philanthropic organisations isn't necessarily as useful. They would rather be happy with a constant stream of money to build their efforts and to be able to plan for things. So dividends work out very well I guess. Yet given this is one feasible way for startups (who can't take out dividends) to engage in philanthropy kudos to the team and idea.
chrischen 15y ago
I'm not sure I see the value in pledging 1% before the startup is worth anything (as opposed to asking for donations after the company is worth something). Can someone explain it to me?
- kurtvarner 15y ago
  The point is that the 1% can potentially turn into a huge amount of money. Let's take the most extreme example: Facebook. If they gave 1% of their equity to a cause in the early stages, it doesn't seem like much. But with their IPO, it's now worth $1 billion. Facebook would never give a $1B donation to charity now, but they are held accountable to what they originally gave in equity.
  - chrischen 15y ago
    So I still don't see the advantage to facebook pledging 1%. Seems like you just explained why everyone would want to have had 1% in facebook at that time. > Facebook would never give a $1B donation to charity now, but they are held accountable to what they originally gave in equity. Perhaps there's a reason why facebook wouldn't give $1B right now. So in hindsight that 1% donated would seem like a bad idea at this stage. So why not (for the startup) just wait and donate what feels right if they do get big?
    - TeMPOraL 15y ago
      It's charity. Donating to a charity is, by definition, not supposed to give you (monetary) advantage. The point is, it's easy to give that 1% when it has no real value yet. Also, it's only 1%, almost a negligible part of a whole. For most of the companies who would pledge it, this 1% would stay meaningless, but every once in a while a startup will grow into something Facebook-big, and suddenly, this 1% means a whole lot of money to charity.
      - chrischen 15y ago
        What gives a company the right to determine what non-profit seeking donations is going to be a positive impact on society? Isn't a the company just supposed to do its main thing (whatever that may be) and do it well? Also I'd imagine the only reason any major company donates to charity is to strengthen its brand in some way. This 1% charity donation for a startup doesn't seem like it would do much that donating $1b later on wouldn't do. Even if Facebook can't donate $1b for whatever reason, Mark Zuckerberg can still donate the equivalent of 1% of facebook through his own personal shares right now. 1% may not have real value for early stage companies but I doubt most successful founders go in undervaluing their companies or treating 1% like an external evaluator would.
guelo 15y ago
Maybe it's just me but when I first saw the name I thought it had something to do with Occupy Wall Street. I like the concept but maybe "1 percent" has been tainted?
alexkearns 15y ago
I am personally not a fan of businesses giving money to charity. If they have spare cash, they should give it to their employees (who in a normal business are mainly responsible for the cash surplus) as a bonus - those employees can themselves donate their earning to a charity of their choice, rather than having the company inflict a charity on them.
- alastair 15y ago
  This isn't spare cash, its equity. I agree with your sentiment, eg. some company giving 10% of your salary to charity on your behalf - thats obviously not a good idea, thats your money. In the same vein, if you have equity in a company, you are free to do with it as you please - and donating 1% to charity is quite noble.
  - mattmanser 15y ago
    You both are part of the problem, where has this meme come from that companies should be heartless bastards? Companies have become poor citizens and it's this kind of thinking that's causing it.
    - alexkearns 15y ago
      Before accusing people of being part of the problem, you should perhaps be a little critical of yourself and your own incoherent arguments. No-one has called for companies to be heartless bastards. Nor are companies citizens of any kind. Companies are bureaucratic capitalist structures - they don't have hearts and cannot be citizens. My reason for disliking companies giving to charities is because it imposes a single or a small number of charities on a group of people. Not all people in that group may agree with that charity's aims. I also think charity giving is a moral issue, and morality resides within individuals not bureaucratic capitalist structures. Not that I expect you to understand the nuance of this argument. I am just part of "the problem" - whatever that problem might be.
      - rooshdi 15y ago
temphn 15y ago
They’ve now since used that donation and through smart investing, our involvement had a hand in pushing forward a proposition that would increase funding for “at risk” schools in Colorado by $5m forever This is presented as if it is unambiguously a good thing. Phrased in a less complimentary way, the nonprofit spent a significant amount of money on political lobbying to get the taxpayer to involuntarily fork over $5M/year to a cause the original guy supported ("at risk" schools). Some people think that schools for the gifted are more necessary than schools for the "at risk", and that for profits that build real products create far more value for society than nonprofits. If you are one of these people, you will take that 1% and use it to invest in self-sustaining businesses rather than on permanently dependent nonprofits.
- mattdeboard 15y ago
  Classic case of "missing the forest for the trees." Unchecked myopia and frankly just kind of a stupid point.
  - alexkearns 15y ago
    I presume you are referring to your own comment here, because when you strip away the insults, the mixed metaphors and the cliche, you are saying a whole lot of nothing. Why bother even posting it.
    - mattdeboard 15y ago
      I presume you are referring to your own comments here, because when you strip away the condescension you are saying a whole lot of nothing. Why bother even posting it.
      - alexkearns 15y ago
        Happy to fling it, it seems, but not so happy to receive it. Anyway, congrats on writing a coherent sentence. It reads really well.
twentysix 15y ago
How is this better than personally donating a % of your earnings after your start up gets acquired? Does donating as a business rather than an individual hold any additional benefits?
Eliezer 15y ago
Can we have a list of startups that are doing this? Quixey would be on it, and I'm pretty sure there's one or two others I've heard of, but I don't remember offhand.
- rpwilcox 15y ago
  No - such a list would have to be of founders doing this. The legal-entity that is a startup has nothing to do with 1% of nothing. (See my conversation with ccory elsewhere in this thread)
rpwilcox 15y ago
What do your investors or board think about you removing 1% of the company's equity from play? (this is another reason why I don't like engineers getting paid in equity - that limits the availiable equity pool for investors to buy, baring share dilution.)
- corry 15y ago
  It's not 1% of the overall equity - you're just pledging the cash value of 1% of YOUR SHARE of equity. Investors obviously don't care about how you manage your personal cash post-exit.
  - rpwilcox 15y ago
    Ohh, your shares. I would call that out somehow, because this is an important detail that I know I missed first reading. Certainly you're free to do whatever you want with your part of the equity... (but giving away 1% of the shared resource that is the company is a lot different). Perhaps revising your marketing? You're not connecting a startup (the legal entity) to anything - you're connecting a founder with a charity willing to accept 1% of the cash value of the founder's equity at (exit?).
mynameishere 15y ago
Charity is very clearly the domain of rich guys winding down their careers and/or trying to buy their way into heaven. It would be a total distraction for someone in his prime.

113 points by mirceagoia 15y ago

I think it's a very good idea. Not only people can donate, but now startups can too.

Does anyone have more information about this? Saw this last year, thought it was a cool idea (with a great name!), haven't heard a peep since. It's like asking frequent lottery ticket buyers to promise 1% of their future winnings for charity. Easy sell, though most people would probably end up giving that much anyway. It should be 10% of nothing, really...

mirceagoia 15y ago
Shervin Pishevar has more info, as he is one of the initiators. Here's more info as well: http://www.hunterwalk.com/2012/04/1-of-nothing-is-something-how-angellist.html http://www.hunterwalk.com/2012/04/1-of-nothing-is-something-... --------- If you’d like to know more or understand more please get in touch with us. You can tweet us or you can email us at “info [at] 1percentof [dot] org”. ---------

jyothi 15y ago

A sudden burst of donation for a philanthropic organisations isn't necessarily as useful. They would rather be happy with a constant stream of money to build their efforts and to be able to plan for things. So dividends work out very well I guess. Yet given this is one feasible way for startups (who can't take out dividends) to engage in philanthropy kudos to the team and idea.

chrischen 15y ago

I'm not sure I see the value in pledging 1% before the startup is worth anything (as opposed to asking for donations after the company is worth something). Can someone explain it to me?

kurtvarner 15y ago
The point is that the 1% can potentially turn into a huge amount of money. Let's take the most extreme example: Facebook. If they gave 1% of their equity to a cause in the early stages, it doesn't seem like much. But with their IPO, it's now worth $1 billion. Facebook would never give a $1B donation to charity now, but they are held accountable to what they originally gave in equity.
- chrischen 15y ago
  So I still don't see the advantage to facebook pledging 1%. Seems like you just explained why everyone would want to have had 1% in facebook at that time. > Facebook would never give a $1B donation to charity now, but they are held accountable to what they originally gave in equity. Perhaps there's a reason why facebook wouldn't give $1B right now. So in hindsight that 1% donated would seem like a bad idea at this stage. So why not (for the startup) just wait and donate what feels right if they do get big?
  - TeMPOraL 15y ago
    It's charity. Donating to a charity is, by definition, not supposed to give you (monetary) advantage. The point is, it's easy to give that 1% when it has no real value yet. Also, it's only 1%, almost a negligible part of a whole. For most of the companies who would pledge it, this 1% would stay meaningless, but every once in a while a startup will grow into something Facebook-big, and suddenly, this 1% means a whole lot of money to charity.
    - chrischen 15y ago
      What gives a company the right to determine what non-profit seeking donations is going to be a positive impact on society? Isn't a the company just supposed to do its main thing (whatever that may be) and do it well? Also I'd imagine the only reason any major company donates to charity is to strengthen its brand in some way. This 1% charity donation for a startup doesn't seem like it would do much that donating $1b later on wouldn't do. Even if Facebook can't donate $1b for whatever reason, Mark Zuckerberg can still donate the equivalent of 1% of facebook through his own personal shares right now. 1% may not have real value for early stage companies but I doubt most successful founders go in undervaluing their companies or treating 1% like an external evaluator would.

guelo 15y ago

Maybe it's just me but when I first saw the name I thought it had something to do with Occupy Wall Street. I like the concept but maybe "1 percent" has been tainted?

alexkearns 15y ago

I am personally not a fan of businesses giving money to charity. If they have spare cash, they should give it to their employees (who in a normal business are mainly responsible for the cash surplus) as a bonus - those employees can themselves donate their earning to a charity of their choice, rather than having the company inflict a charity on them.

alastair 15y ago
This isn't spare cash, its equity. I agree with your sentiment, eg. some company giving 10% of your salary to charity on your behalf - thats obviously not a good idea, thats your money. In the same vein, if you have equity in a company, you are free to do with it as you please - and donating 1% to charity is quite noble.
- mattmanser 15y ago
  You both are part of the problem, where has this meme come from that companies should be heartless bastards? Companies have become poor citizens and it's this kind of thinking that's causing it.
  - alexkearns 15y ago
    Before accusing people of being part of the problem, you should perhaps be a little critical of yourself and your own incoherent arguments. No-one has called for companies to be heartless bastards. Nor are companies citizens of any kind. Companies are bureaucratic capitalist structures - they don't have hearts and cannot be citizens. My reason for disliking companies giving to charities is because it imposes a single or a small number of charities on a group of people. Not all people in that group may agree with that charity's aims. I also think charity giving is a moral issue, and morality resides within individuals not bureaucratic capitalist structures. Not that I expect you to understand the nuance of this argument. I am just part of "the problem" - whatever that problem might be.
    - rooshdi 15y ago

temphn 15y ago

They’ve now since used that donation and through smart investing, our involvement had a hand in pushing forward a proposition that would increase funding for “at risk” schools in Colorado by $5m forever This is presented as if it is unambiguously a good thing. Phrased in a less complimentary way, the nonprofit spent a significant amount of money on political lobbying to get the taxpayer to involuntarily fork over $5M/year to a cause the original guy supported ("at risk" schools). Some people think that schools for the gifted are more necessary than schools for the "at risk", and that for profits that build real products create far more value for society than nonprofits. If you are one of these people, you will take that 1% and use it to invest in self-sustaining businesses rather than on permanently dependent nonprofits.

mattdeboard 15y ago
Classic case of "missing the forest for the trees." Unchecked myopia and frankly just kind of a stupid point.
- alexkearns 15y ago
  I presume you are referring to your own comment here, because when you strip away the insults, the mixed metaphors and the cliche, you are saying a whole lot of nothing. Why bother even posting it.
  - mattdeboard 15y ago
    I presume you are referring to your own comments here, because when you strip away the condescension you are saying a whole lot of nothing. Why bother even posting it.
    - alexkearns 15y ago
      Happy to fling it, it seems, but not so happy to receive it. Anyway, congrats on writing a coherent sentence. It reads really well.

twentysix 15y ago

How is this better than personally donating a % of your earnings after your start up gets acquired? Does donating as a business rather than an individual hold any additional benefits?

Eliezer 15y ago

Can we have a list of startups that are doing this? Quixey would be on it, and I'm pretty sure there's one or two others I've heard of, but I don't remember offhand.

rpwilcox 15y ago
No - such a list would have to be of founders doing this. The legal-entity that is a startup has nothing to do with 1% of nothing. (See my conversation with ccory elsewhere in this thread)

rpwilcox 15y ago

What do your investors or board think about you removing 1% of the company's equity from play? (this is another reason why I don't like engineers getting paid in equity - that limits the availiable equity pool for investors to buy, baring share dilution.)

corry 15y ago
It's not 1% of the overall equity - you're just pledging the cash value of 1% of YOUR SHARE of equity. Investors obviously don't care about how you manage your personal cash post-exit.
- rpwilcox 15y ago
  Ohh, your shares. I would call that out somehow, because this is an important detail that I know I missed first reading. Certainly you're free to do whatever you want with your part of the equity... (but giving away 1% of the shared resource that is the company is a lot different). Perhaps revising your marketing? You're not connecting a startup (the legal entity) to anything - you're connecting a founder with a charity willing to accept 1% of the cash value of the founder's equity at (exit?).

mynameishere 15y ago

Charity is very clearly the domain of rich guys winding down their careers and/or trying to buy their way into heaven. It would be a total distraction for someone in his prime.