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Entrepreneurship and philanthropy are closely intertwined in the United States, woven together in a cycle of wealth creation and distribution. The most famous philanthropists in the United States have also been some of its most successful entrepreneurs, from Carnegie and Rockefeller in the industrial era to Gates and Zuckerberg in the tech boom, all dedicating significant portions of their fortunes to giving back to society.
These giants of industry are the country’s best known philanthropists, and their outsized contributions drive much of the conversation about business and giving. But less is known about the charitable habits and contributions of everyday entrepreneurs—the business founders, owners and investors who make up so much of the economic fabric of the United States. Today, there are more than 27 million businesses operating in the United States, and fewer than 4,000 are publicly traded. Yet the philanthropic impact of these entrepreneurs remains largely unexplored territory; non-anecdotal data on entrepreneurs and giving is largely lacking.
This report was designed to provide insight into what qualities, if any, are unique to entrepreneurs by providing a comparison between entrepreneurs and non-entrepreneurs on a range of dimensions. Entrepreneur respondents range from owners of large enterprises to microbusinesses; it includes family business founders, serial entrepreneurs and hands-on investors. It examines the broad charitable giving attitudes and behaviors of entrepreneurs and business owners. Is giving prevalent among all entrepreneurs and business owners? Are the traits that characterize entrepreneurs also present in their giving? We highlight the unique characteristics of these charitable donors and show entrepreneurs are committed not only to addressing gaps in the marketplace through business, but also gaps in the social sector through their giving.
Entrepreneurs give and volunteer more than peers of similar economic circumstances.
Entrepreneurs are significantly more likely than non-entrepreneur peers to self-identify as a philanthropist and to rate charitable giving as very important. They are also far more likely to have family traditions around giving and to see a link between their volunteer activity and their professional success.
Entrepreneurs’ approach to philanthropy reflects the hands-on approach they have used in building their businesses; they place more emphasis on being personally involved in giving, deciding how funds are used, and the ability to demonstrate leadership through their volunteering.
Particularly with the rise of tech entrepreneurs on the West Coast, there is anecdotal data that entrepreneurs give differently: they are “venture philanthropists” who see their philanthropic activities as investments driving systems change and are more willing to take risks on innovative nonprofits. Our study confirms that, in fact, entrepreneurs are significantly more likely than non-entrepreneurs to take a venture approach—although notably it is still a minority.
Entrepreneurs are more likely to have had a discussion about philanthropy with a financial advisor and to have engaged with more sophisticated approaches to charitable giving, including direct donation of appreciated stock. They’re also more likely to plan for legacy giving.
Three in 10 entrepreneurs plan to exit their businesses in the near future, and charitable giving is on the minds of many considering the sale of their business.