Entrepreneurs give twice as much of their profits to charity as more-established companies, according to new research released today by the Fidelity Charitable Gift Fund and Ernst & Young.
Entrepreneurs, the study found, allocate a median of 3 percent of their corporate profits to charity. That is more than double the median 1.2 percent of profits found in The Chronicle’s latest corporate-giving survey of the nation’s largest companies.
Nine out of 10 of the 146 entrepreneurs in the study were male and their average age was 58. Surveyed online in September and October, all had won awards from Ernst & Young for founding viable companies, most of which are privately held and at least a decade old. Their companies generate a median of $100-million annually.
- The median number of charities supported by the entrepreneurs’ companies was 10.
- Seventy percent of the respondents said that they donate their personal time to charities, in addition to money, with more than half sitting on the board of a nonprofit organization.
- More than 70 percent of the entrepreneurs said their companies actively encourage volunteerism among employees, and more than half offer incentives for employees to donate money to charities.
- More than half of the entrepreneurs, 55 percent, said that they personally select the causes their company supports, and 43 percent have formed their own charitable organizations.
- Nearly 70 percent said they started supporting charities while building their business, before it was successful.
The findings show that “entrepreneurs are not waiting to support charities but giving while they are building their businesses,” said Sarah C. Libbey, president of the Fidelity Charitable Gift Fund.
Ms. Libbey said Fidelity has seen some evidence of that trend: Donations of privately held restricted stock from entrepreneurs like those in the study have increased at Fidelity during the first nine months of this year. From January though September, restricted stock accounted for 9.5 percent of donations to the fund, up from 2.9 percent during the same period last year.
A press release about the study, “Entrepreneurs and Philanthropy: Investing in the Future,” is available on Fidelity’s Web site at www.charitablegift.org.