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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 m

• 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
        You just explained the problem yourself. Companies put cash and profits over causes and people. The "1% of Nothing" initiative is only encouraging founders to invest a percentage of this cash to a philanthropic cause. If I understand correctly, employees and other shareholder equity will remain unaffected. Furthermore, if they don't believe in the company's philanthropic efforts, they are still free to work or invest elsewhere.
        • alexkearns 15y ago
          But the problem of good and bad companies is not about how much they give to charity. I bet tobacco and arms companies give huge wads to charities but that does not make them good. Good companies are companies whose work (their "cause" enacted by their "people") is socially beneficial. Such companies do not need to give 1% of their equity away to charities to be good - indeed to do so, would be to distract from their socially beneficial mission.
          • rooshdi 15y ago
            So, you support socially beneficial companies, yet object to companies diversifying their social contributions by a percentage or so? I'm sorry, but I just don't buy the argument that donating a percentage of equity from each founder would be distractive.
            • alexkearns 15y ago
              It would be 1% distracting.
              • rooshdi 15y ago
                Also, 1% diversified. If 99% of a company's social value isn't good, at least a percentage may be.
      • Drbble 15y ago
        Does morality lie within a charitable nonprofit corporation? If not, how is there morality in charitable giving? Where does that morality go?
    • chrischen 15y ago
      So is a company a person now?
      • rooshdi 15y ago
        In a way, it already is: http://en.wikipedia.org/wiki/Corporate_personhood http://en.wikipedia.org/wiki/Corporate_personhood If anything, this pledge is just trying to invoke one percentage of empathy in the mind of this sociopath.
        • Drbble 15y ago
          That's a (disputed) point of law, not a law of sociology or psychology or spirituality or such.
  • alexkearns 15y ago
    It's all cash in the end, including equity. That cash could be spent on rewarding staff, reinvesting in the business, angel investing another start-up or on a charity. I personally think 'giving to charity' is the worst option, my reason being that that charity giving is a moral issue and that morals should be left to individuals rather than businesses. Your employees may find the business's favoured charity morally repulsive. I certainly would not like the fact that 1% of the effort I was giving went to a charity with whose aims I disagreed.
    • _delirium 15y ago
      In a cooperative that's true, but in a capitalist corporation, the equity is owned by whoever owns it, who can dispose of it as they see fit (barring any shareholder agreements preventing certain sales). It's not like Zuckerberg is going to give his Facebook IPO capital gains to his employees, or reinvest them in the business; he's going to put them in his personal bank/brokerage account. If he had donated 1% of the equity to a charity 5 years ago, the only thing that would be different is that his personal account would have 1% less of Facebook stock in it. None of the employees or the other shareholders would be affected. When it comes to companies spending on things that their employees might find morally repulsive, I think political contributions are a much bigger problem than charity donations. Especially since those actually come from the company's revenues, rather than being taken out of an owner's equity--- I would have much less problem with political contributions if they were donations of stock by the company's owner, rather than checks written out of the corporate budget. In any case, the most likely thing that 1% would go into if it weren't donated, in the case of startup success, is just luxury goods/travel for the founders. Do you really think a private jet for the founder is morally superior to donating to charity? What if some of the employees are morally opposed to private jets (e.g. on environmentalist grounds)?
      • drumdance 15y ago
        No, it would've hit everyone. That 1% would be dilutive to all shareholders unless he specifically carved it out of his share.
• Radim 15y ago
  Agreed. This (non-binding) pledge is a bit like saying "I don't trust myself enough to make that decision on my own in the future". But of course, your future self will in fact have more knowledge and context to make a better-informed decision. The property of "nobility", when attached to a business, only makes sense as long as it promotes the brand/PR. An inanimate business has no conscience nor ego to appease. Let business owners donate (natural persons), not businesses.
  • Eliezer 15y ago
    You shouldn't trust yourself, because the outside view is that most people don't get around to it. Give 1% at start; you can always give more later.
  • Drbble 15y ago
    What is a business if not a collection of people working in common cause?
• Eliezer 15y ago
  I overwhelmingly disagree. The number two limiting factor on philanthropy is that, despite good intentions, people just don't actually get around to it. Giving away 1% at startup-start is a supremely good suggestion just because it means something will actually happen. If my host nonprofit had $100 for everyone who heard of us and thought it was a good idea and plans to donate to us "someday", it would probably work out to around a million dollars. (The number one limiting factor is the lack of any efficient market in utilons. See Givewell and Giving What We Can for optimal philanthropy background.)
  • alexkearns 15y ago
    You seem to think that the total amount of charitable donations is all important. More is better, seems to be your argument, regardless of where that money goes, where it comes from or what it is spent on. What if all that money went to a charity you disagree with, say one that promotes eugenics? My argument is: leave charitable giving to individuals - individuals can choose their own charities or not to give anything. That seems far more democratic to me. It may be that this will result in less charitable donations overall but at least the money will be going to organisations individuals support.
    • tptacek 15y ago
      Startups aren't donating to charities that promote eugenics.
    • TomGullen 15y ago
      Leaving charity solely to individuals would be a responsibility with dire consequences. Charities need money, and we all have a moral obligation to give that all of us including me fall far short of. Government giving to charity, business giving to charity is good and should be encouraged. If you work at a company that gives money to charity you can always find one that doesn't.
    • drumdance 15y ago
      I'm not a huge fan of corporate giving, but the counter-argument is that when you have one big donor instead of a lot of little ones, and objectionable decisions by the company can be boycotted. For example, Coors used to give to a lot of right-wing organizations and also had a lot of anti-gay hiring practices. Gay organizations targetted them and eventually they not only stopped donating to those orgs, but they changed all their corporate policies.
• maxerickson 15y ago
  It seems likely that the owners of the business will face miscellaneous internet judgement no matter what they choose to do with their business. I don't mean to direct that at you, I mean that there seems to be plenty of actual disagreement on the issue and that there is plenty of room for such disagreement.
• TomGullen 15y ago
  Why? Are the employees needs greater than the recipients of charity?
• read_wharf 15y ago
  Isn't most corporate charity a form of tax management anyway? If charitable donations were not deductible, I think corporate charity would effectively disappear.
  • jeremyarussell 15y ago
    Not necessarily, I work with companies that utilize philanthropy as a way to market to the locals. It's a sort of, "Look guys, come here, we give back to our community." and it seems to work rather well.
    • drumdance 15y ago
      Exactly. In my community Whole Foods makes a big deal about giving to local orgs. They keep a running tally on the wall.
  • indiekid 15y ago
    Corporate donations are indeed deductible, but generally speaking it's when the actual grant is made. If the grant is made when the stock has a low strike price, then there's really no benefit attached. If the grant is made when the strike price is high, then it's a significant cost on the business and dilutive to all parties involved. The solution that 1% of Nothing provides is that it's the individual giving the shares instead, only exercised when there's an exit (IPO or acquisition).
• montecarl 15y ago
  I'm sure the market pressure coming from employees like you will correct this mistake. Companies that make charitable donations simply won't be able to compete with those that do as they will lose some of their employees. Or maybe the market feels differently?
• DanBC 15y ago
  One problem with giving extra cash to employees is that the government takes a chunk of it as tax.[1] It should be possible to arrange a system where two or three charities are selected (with employee involvement) and allow employees to select which one they'd like "their split" to go to. And companies don't have to just give cash. They can allow their workers time to participate in volunteering; or they can provide logistical support for some projects, etc. EDIT: [1] At least, in the UK the employee would have to pay tax on the funds.
  • Drbble 15y ago
    Google does this.
• jeremyarussell 15y ago
  Whats wrong with doing both? 2%, 1% to a charity of the business founder's choice, because according to you own arguments an individual has the choice to do what he wants with his money. Which includes and should not be limited to the donations of their own money to a charity of their own choosing. Then who knows, they could give another 1% as bonuses to the employees that helped execute and support his/her vision. The point being, you can't say a business is just an individual or group of individuals running a company, insist that they shouldn't do with their money what they want, then continue on to say that your argument is based off of letting people be free to do what they want. It's a bit contradictory if you think about it. I figure they can do whatever they want, it's their company.
  • alexkearns 15y ago
    I am not insisting on anything. Rather you are insisting that I am insisting. Company owners can and will do what they want - but I personally am not a fan of businesses giving to charity for reasons I have outlined. That does not mean I would ban or villify businesses for giving to charity. There is also something of a power gap between employees and company owners that you don't seem to recognize. An employee giving some of his money to his favoured charity is not the same as a company owner giving 1% of his company to a charity.
• sunir 15y ago
  A lot of people here are arguing the emotional moral reason for donating, but businesses don't have emotions. The functionalist view of donating to charity is you donate when you want to build your community, however you define your community. Businesses have an equal need as citizens to build the community around them. Businesses donate to charities all the time. They donate to their industry trade associations. They donate to the local municipalities to build parks. They donate to political campaigns. They donate to research foundations and educational institutions. They donate to amateur sports teams. They donate to employee-driven charities like cancer walks. You can argue that businesses donate when it is self-serving, such as donating to universities to attract new employees and patentable research, or political donates, or even good PR like building a new park by the new factory. However, all charity is self-serving. We're all building up the community around us, which benefits us both directly and indirectly. I may donate to the Heart and Stroke Foundation if my family has a history of heart disease, or to my alumni association if I use it as a base of professional networking, or to my coworker's kid's softball team funding drive to stay on his good side. You can be cynical about any of these, but these donations are part of what bind human society together.
  • drumdance 15y ago
    I agree. Companies don't have emotions, but each one definitely has a culture. The kinds of donations they make presumably reflect that culture (over the long term).
• rscale 15y ago
  I find it repugnant that this is the top-rated comment on this site. The founders of a company have the right to allocate equity however they choose, including the right to allocate a portion of that equity directly to a charitable cause they support. (A decision that can be more tax-efficient than allocating it to themselves, taking a distribution, then making a donation.) They may allocate equity to partners, employees, advisors, investors, themselves, or to people and organizations who they wish to support. As a founder, I am not "inflicting a charity" on my employees by assigning 1% equity to a charitable organization, I am distributing my own property, voluntarily, in a manner of my own choosing. You have no duty to work at my company. If you don't wish to help me succeed (for any reason, at all), you are free to work elsewhere. As an investor, you are free to invest elsewhere. Nothing is being inflicted on anyone.
  • alexkearns 15y ago
    So it is repugnant for people to put forward views counter to yours and through a process of voting for that opinion to rise to the top of a list. I'd try another website. Plus, if you think that running a business is all about what "you" want, and employees are solely there to help "you" succeed, you may find "yourself" with a recruitment problem.
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    • rscale 15y ago
      It's true, I find Marxism morally repugnant. That said, if you hold Marx's labor theory of value so dear that you feel equity holders should not be allowed to donate their equity to a charity without worker consent, that's your right. And to be clear, I'm not passing judgment on you as a person. I don't know that you're generally morally repugnant; we might agree on nearly everything. But we disagree viciously on this point. I don't care if an individual got the equity as a founder, an investor, an employee, an advisor, or a partner. Once they've earned the equity, they're free to do what they'd like with it, even if it's not what I'd prefer. I can't accept your arguments to the contrary. And frankly, I think it'd be a very unprofessional employee who'd be so bothered by an individual's personal asset allocation choices that they'd refer to it as having a charity inflicted upon them, simply because you provided a portion of the labor that increased the value of the securities.
• redthrowaway 15y ago
  tptacek made the only refutation of your criticism that needs making later in the thread, so I'll copy it here as a direct response: It is not a valid criticism to complain that money that the owners of the company are entitled to anyways is instead going to charity. The pledge is the founders pledging equity. It is not "the company" giving money to charities, it's the founders themselves. Thus your point about corporate philanthropy (with which I disagree) is off-topic. The company isn't giving any money, anyway. This is individual donation, of the kind you claim to promote.
  • indiekid 15y ago
    This is correct. (I'm one of the founders of 1% of Nothing)
• Drbble 15y ago
  A company giving to charity is different from an owner giving to charity.