Seth Taube, an entrepreneur and founder of multiple billion-dollar businesses over a span of 25 years, is uniquely qualified to speak on the coexistence of business and philanthropy.
Taube’s unusually wide-ranging education planted the seeds for both business and philanthropy. He received a BA from Harvard University in anthropology that included special interests in neuroscience, mental health, and the art and science of human flourishing. He followed that with a Master’s degree in management, economics, and politics from St. Andrew’s University in Great Britain and then completed his education with an MBA from the Wharton School at the University of Pennsylvania.
Taube’s professional journey started in the financial services sector as an associate at Morgan Stanley and later at Tiger Management in New York City. Since then, his businesses across 35 industries have produced tens of thousands of jobs and supported more than 500 companies in North America alone. Among all these ventures, Taube developed a parallel passion for philanthropy.
In 2003, he created the Seth Taube Foundation, to which he has committed tens of millions of dollars in support of more than 50 charities worldwide. The Foundation’s focus is “To help reform education and create a thriving future for humanity and the planet…and to promote the ‘healing economy’ where the health of people and the planet are enhanced.”
Taube, however, is not alone among entrepreneurs whose business plans include philanthropy. But according to a February 2023 report in Forbes, a challenge faces that combination of goals. “Corporate citizenship leaders see a lack of resources (money, time, staff) as their biggest obstacle to reaching their philanthropic goals in 2023 as they witness rising external and internal pressures to respond to a variety of causes.”
Hence, Seth Taube’s masterclass on “How Business and Philanthropy Can Coexist.”
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Sometimes doing the right thing is the right thing to do–simply because it is–for individuals as well as corporations. Yet corporate philanthropy can also return a benefit to a corporation that has a vision to create a positive social impact. Consider these typical benefits:
- Employee Attraction: Corporations have a better chance to attract candidates who share ideals expressed in a philanthropy aligned with the company’s core mission.
- Volunteering: A company that offers work-supported volunteer opportunities will attract like-minded applicants.
- Tax Deductions: The immediate benefit of philanthropic contributions is the ability to earn a charitable donation tax deduction.
- Free Publicity: Sponsoring or partnering with a charitable program by giving funds, in-kind contributions, or employee time will raise awareness about a specific cause and promote the business as a pro-social actor.
- The Halo Effect: The social value of the specific philanthropy is imputed to the corporation itself.
- Relationship Building: Giving back to the community builds relationships with existing customers and gains new ones who care about the cause.
Generosity, in other words, can be a viable part of a business marketing plan. People are attracted to “good” companies. As a result, business and philanthropy can not only coexist, they can become mutually supportive and promote growth in both sectors by delivering both economic and social value.
Business finance requires continual cost-benefit and return-on-investment analysis. As a result, corporate prosocial giving must also meet specific standards.
Philosopher Peter Singer promotes “Effective Altruism,” which produces a measurable impact. In this paradigm, corporations should target causes where the impact is tangible.
However, Forbes reports that some corporations are also applying environmental, social, and governance (ESG) perspectives–non-financial factors–as part of their philanthropic analysis. The social impact of contributions to the arts and music, for example, is hard to measure. Yet, as Taube explains, they enhance the art and science of human flourishing. In this way, he continues to urge industry leaders to support the union of business and public giving.
According to a June 2022 report by the Lilly Family School of Philanthropy at Indiana University, corporate philanthropy increased by nearly 25%, totaling almost $22 billion in 2021. This included both cash and in-kind contributions. A strong GDP and robust economic growth, along with a 37.4% growth in corporate pre-tax profits, helped spur this strong growth in giving. However, that $22 billion represents only about 0.7% of corporate pre-tax profits.
Corporate philanthropy costs money. In challenging economic times, this can act as a brake on such activity. However, the most recent Deloitte Millennial Survey reports that businesses involved in good causes and intent on improving social issues show employees that they can make a difference. This leads to greater productivity and stronger loyalty. The survey concludes that “businesses with a genuine sense of purpose tend to demonstrate stronger long-term growth.” As a result, corporations resistant to philanthropic spending may find that strategy to be self-defeating.
The Deloitte survey also notes that employees can be empowered to create both a positive social and business impact when employers provide them with the means within the workplace environment. This is the “multiplier effect,” a system that amplifies the impact of problem-solving within a business while also addressing social issues. A win-win-win outcome results for the employer, employee, and the public benefactor.
Seth Taube believes, and has repeatedly shown, that philanthropy and business can not only coexist but that they are synergistic. “I’m a firm believer that everyone can make a difference in the world, no matter how big or small,” Taube assures industrialists. “Now is the time to commit to the idea that doing good is good business.”