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Entrepreneurs donate 50 percent more than others, volunteer more
Most entrepreneurs plan to give to charity when they exit their businesses
BOSTON, September 19, 2018 — Entrepreneurs donate more to charity on average than non-business owners, according to a study released today by Fidelity Charitable, an independent public charity and the nation’s second-largest grantmaker. The organization’s latest study focuses on the giving habits and priorities of entrepreneurs, like North Carolina residents and Fidelity Charitable donors Todd and Michelle Buelow, a group whose impact on philanthropy is growing exponentially.
“550,000 Americans become entrepreneurs every month,”1 said Pamela Norley, president of Fidelity Charitable. “The sheer size of this group, coupled with an expressed interest in having a positive social impact, means they have a tremendous influence on the philanthropic sector.”
Philanthropy is a major focus for entrepreneurs—79 percent say that charitable giving is a critical part of who they are, and 47 percent consider themselves philanthropists. Entrepreneurs tend to give more than others, with the median annual donation for an entrepreneur being 50 percent higher—$3,577 compared with $2,383.
Entrepreneurs approach giving differently—nearly six in 10 say their experience as business owners reflect how they approach their giving. Entrepreneurs prioritize aspects of giving that align with a more hands-on approach: 61 percent appreciate the ability to be personally involved in a cause or organization, and 62 percent value the opportunity to demonstrate leadership in their community through charitable giving, compared to about half of non-business owners.
As further evidence of entrepreneurs' commitment to giving back, the study found they also spend more time volunteering, with 66 percent volunteering three or more hours per month, compared with 55 percent by other donors. They are also more likely to contribute skills relevant to their expertise in business, such as professional services, helping with fundraising, and serving on boards or committees.
This hands-on approach to giving is exemplified by entrepreneurs Todd and Michelle Buelow. Todd, who founded the custom software company Dualboot Partners, and Michelle, who founded Bella Tunno, a company that makes baby products and accessories, maintain a busy schedule volunteering for local charities, including serving on boards and helping with fundraisers.
Their involvement with organizations like the Charlotte Rescue Mission, a residential program for substance abuse recovery, has helped to jumpstart projects such as expanding a men's dormitory for recovering addicts to include new bedrooms, a bathroom, and a full gym. In addition to their time, the Buelows also give actively through their Fidelity Charitable donor-advised fund, the Matt Tunno Make A Difference Fund. In fact, for every purchase from Bella Tunno, the couple recommends a grant to Feeding America, resulting in more than 1.5 million meals donated. The fund is named for Michelle's brother Matt, a doctoral candidate who died at the age of 30 following long struggles with addiction, several years before the launch of Bella Tunno. Making grants in his memory, particularly around areas related to addiction, was a catalyst for them to increase their focus on giving back in conjunction with growing their businesses.
“As entrepreneurs, you really have to be clever and creative to spread every dollar six different ways,” said Michelle Buelow. “That's the lens that we bring to our philanthropy and volunteer work as well. How can we find ways to make funds go further, whether it is by leveraging our network or bringing a new idea to the table for the nonprofits we support?”
Philanthropy is particularly top-of-mind when business owners are making plans to sell their business. Three out of 10 current business owners intend to sell or pass the business down to a family member within the next five years, and of those, nearly 68 percent have plans to donate to charity in conjunction with that transition. Just 14 percent of business owners have no plans in place to give to charity during the time of a business exit.
“With a significant number of individuals who have both a clear commitment to philanthropy and an in-depth understanding of charitable giving strategies planning to sell or pass down their business within the next five years, the philanthropic sector is likely to benefit substantially,” said Karla Valas, managing director of Fidelity Charitable’s Complex Assets Group.
Specifically, 31 percent plan to make a donation to charity with the proceeds, 27 percent plan to set up an ongoing way to make charitable donations via a donor-advised fund or foundation, and 26 percent plan to donate shares of the business prior to the sale, which can help increase the amount they can give.
Entrepreneurs as Philanthropists surveyed 3,000 total respondents who give to charity and itemized deductions on their taxes last year. 708 are entrepreneurs, including 559 who currently own a business and 149 who previously owned a business and hold assets deriving from its sale while 2,292 are non-entrepreneurs. Entrepreneurs were defined by having founded a business or owning a business directly through stock or direct ownership. Those who owned stock in public companies were excluded unless that ownership gave them a controlling interest.
1The Kauffman Index of Entrepreneurship Series, 2016.
Fidelity Charitable is an independent public charity that has helped donors support more than 255,000 nonprofit organizations with $30 billion in grants. Established in 1991, Fidelity Charitable launched the first national donor-advised fund program. The mission of the organization is to grow the American tradition of philanthropy by providing programs that make charitable giving accessible, simple and effective. For more information about Fidelity Charitable, visit https://www.fidelitycharitable.org.