The corporate philanthropy organization Pledge 1% has, since its launch in 2014, asked founders to donate 1% of their companies’ equity, product or employees’ time starting on their first day of business.
While the Bay Area-based outfit has found meaningful support from companies like DocuSign, Box, Twilio Okta and PagerDuty that pledged their resources ahead of becoming publicly traded companies, Pledge 1% is now sharpening its ask slightly, and asking a growing list of VCs to also help unlock what it hopes will become billions of dollars in donations by nudging their companies to donate 1% of their outstanding equity ahead of a public offering.
It’s a soft sell, as the organization’s CEO, Amy Lesnick, describes it. Her five-person team isn’t asking VCs to fork over any of their ownership in pre-IPO companies. Instead, Pledge 1% — originally co-founded by Salesforce founder Marc Benioff and Atlassian co-founder Scott Farquhar, among others — has enlisted VCs who are also “allies” of the organization to talk more systematically with founders whose companies are poised to go public within 12 to 18 months.
The idea is to help persuade these founding teams to set up corporate-donor-advised funds so that when their companies’ shares begin to trade, they already have a scheduled sale of those shares in place, or else plans to exercise (and donate) them after the company’s post-IPO lock-up period.
It is already happening somewhat organically, she adds. In the last year, Coinbase, UiPath and Unity worked with Pledge 1% to set aside equity worth $1 billion.
Much of what Pledge 1% aims to do is simply to institutionalize the process, explains Lesnick. In her view, more companies want to weave philanthropy into their corporate culture, but it’s oftentimes challenging for a fast-moving startup to know how best to do that. Meanwhile, because VCs sits on so many boards, around 50 of them have come together to help Pledge 1% create a living playbook for founders and a step-by-step guide for companies to formalize equity pledges — along with a companion guide for CFOs and in-house attorneys.
Indeed, while right now, participating VCs will focus on nudging their maturing portfolio companies into thinking more about gifting, Lesnick says Pledge 1%’s aspiration is that all venture-backed companies will eventually set aside some equity for social impact during during every round of capital that they raise.
“Hopefully,” says Lesnick, “we’ll have a conversation in five years and have a good chuckle of how we even had to talk about [startups donating equity] because it will just be the norm.”
To get involved with the program as a VC or as a founder, as well as to see who has already signed up (including from Accel, Bessemer, Benchmark and Andreessen Horowitz), you can learn more here.
source https://techcrunch.com/2021/06/08/pledge-1-is-asking-vcs-to-help-unlock-billions-in-corporate-philanthropy/
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