Smart giving for entrepreneurs – Founders Pledge
If you haven’t heard of Founders Pledge, it’s about time you got up to speed. While our industry can be pretty preoccupied with growth and profit, it’s also important to most founders that they find ways to give back, whether that’s through mentorship, knowledge sharing or charitable giving. Founders Pledge was set up to help tech founders spread the love when they exit.
Founders Pledge is a London-based organisation that asks entrepreneurs to commit to donating a small percentage of their personal proceeds upon exit (company IPO, sale or recapitalisation) to non-profit causes.
Every penny of the money donated goes directly to charity; there’s no fee or commission.
We’re teaming up with FP to help UK founders become aware of this great opportunity, and we’ll be encouraging our Upscale (Series A growth programme) and Future Fifty (high-growth late-stage digital business network) cohorts and alumni to find out more about the social, developmental and tax advantages of this pledge scheme, that’s tailored specifically for people in our industry.
Some of the people who have signed the one-page plain-English pledge agreement, include the founders of WeWork and first hires from Uber. Founders of UK companies to commit include José Neves from Farfetch, Alex Depledge from Hassle.com, Ben Medlock from SwiftKey, Sarah Wood from Unruly (all Future Fifty alumni) and Nicholas Cary from Blockchain.
So far, Founders Pledge has garnered a staggering 1030 pledges worth $342m, from 870 companies, valued at $160bn, across 25 countries. In just the two years they’ve been going, 29 exits have translated to $11m donated to charity.
Tech City UK asks…
David Goldberg, Founders Pledge co-founder and CEO came to our team meeting to tell us a bit more about Founders Pledge and explain their data-driven approach to choosing where they give the money. While he was here, TCUK staff didn’t hold back on asking him a number of pretty probing questions! So here’s a few things we learned.
The reason that 100% of the donations can go to charity, without a cut going to cover Founders Pledge overheads, is that their costs are fully met by multi-year charitable commitments already in place, from sponsors, partners and private donors.
They consider themselves the best in the game at choosing causes to take their money. Their team of researchers work to try and find the top 0.1% performing charities in the world, offering the highest-impact interventions based on investment. They also work with each founder to tailor the giving to causes that are of importance and interest to them. So if you want all your money to go towards saving cats, they’ll find the best damn cat sanctuary in the world, and help you save more cats that you otherwise could have.
There’s no limit to how much you can pledge. The minimum pledge amount is 2%, but they’ve had people sign up to donate anything from 2% to 100% of their exit rewards.
You can’t back out. It’s a legally binding document that you sign, but so far people have only asked if they can donate more.
You don’t need to check with your board or investors before signing up. The pledge is an individual undertaking to do with personal exit capital, and not connected to your business.
Considering two of the three founders are Californian, we wondered why they decided to set up FP in London. Well London has everything. It’s a city that hosts every industry, without focussing on just one. The UK has financial regulation that encourages charitable giving, and the way that they’ve been able to set themselves up means that they can spend the donations all over the world.
Staff also asked about the gender split of pledgers. At the moment there are more men than women on the books, reflecting current tech founder gender realities.
And we wondered whether the act of pledging changed behaviour of entrepreneurs towards philanthropy, beyond the pledge. Anecdotally, yes maybe, but they don’t have data on it.
We like FP’s transparency, and mission, and we’re super happy to be teaming up. To find out more or to sign the pledge, go to founderspledge.com.