Why Entrepreneurs are More Likely to Be Philanthropic

It’s one of those things we kind of presume and figure is true. But do we really know it’s true? Has anyone studied whether business entrepreneurs actually are more philanthropic and generous than other people of comparable economic success? 

Thanks to a recent report, now we do.

Everyone knows the huge industry titans who have given out of their wealth and success. But is the same thing driving people like Carnegie and Gates to give also driving average business owners and serial entrepreneurs? 

As the report indicates, there are 27 million businesses in the United States. Only 4000 are publicly traded. What do the people who own these 27 million think about giving? How do they approach it? How important is it?

As you’ll see from this stunning reveal of entrepreneurial philanthropic statistics, if you’ve got any entrepreneurs in your major donor pipeline or other donor databases – keep them. These people want to give and do give more than their average counterparts who aren’t entrepreneurs.

Let’s look at the stats.

Entrepreneurs Give More

The report found that entrepreneurs give 50% more than other people who have similar economic realities. That’s huge! Suppose an average donor of a certain net worth or income gives $5000 per year. That would mean an entrepreneur with comparable wealth or income would give $7500. 

Business owners are far more likely to consider charitable giving as very important, and 75% of them have spoken with a financial advisor or other mentor about giving. Only half of comparable people who aren’t business owners have done this. 

Again – these gaps are enormous. In situations where the only notable difference between two people is that one person has started their own business, it appears that person is far more likely to make a charitable gift, and make it bigger.

Entrepreneurs Volunteer More

Two-thirds of entrepreneurs volunteer for at least two hours every month. Only about half of other people do this. So, business owners don’t just give more money. They give more time as well. This suggests they recognize the importance of actually showing up and putting in the work. 

Just giving money isn’t enough. 

This is probably why entrepreneurs are also far more likely to get involved in an organization and want to become leaders, board members, and decision-makers. 61% of entrepreneurs say they like to be personally involved with nonprofits, not just give. 

Business Translates to Giving 

59% say their approach to business influences how they give.

And because entrepreneurs have to put so much time and effort into their businesses – with no guarantee it will pay off – this means they will approach giving with a similar mindset. They recognize that just giving money doesn’t guarantee success with your mission. And they want your mission to succeed, just like their businesses. 

An entrepreneur donor and supporter is thus a powerful asset for a nonprofit, assuming they also have a cooperative attitude. This is a person who will work, who will follow through on commitments, and do what they can to ensure success. 

Business Owners Leave Legacies of Generosity

Remarkably, half of entrepreneurs want to participate in planned giving, compared to just 33% of other people of comparable economic circumstances. Again – a huge gap. 

This is probably why business owners are far more likely to have looked into alternative giving strategies, such as donating stock. This is a common feature of planned giving. Entrepreneurs are looking for ways to creatively support their favorite causes. 

Also, business owners are far more likely to create family traditions of giving. That means, if an entrepreneur becomes a committed supporter of your nonprofit, there’s a much greater chance their children will continue that legacy of partnership compared to other donors. 

And you might not have to wait because 29% of business owners say they intend to sell their businesses within the next five years or pass them on to a family member. And 69% of these want to include philanthropy as part of their business exit plans.

After they sell, some entrepreneurs retire. Others start another new business and try to repeat their success in a new venture. 

How Fundraisers Can Partner with Entrepreneurs

You can see how valuable your entrepreneurial supporters and donors will be. The question is, how do you find them? And once you find them, how do you keep them? 

While the Fundraising Report Card emphasizes the value of data, it doesn’t drill down to specific donors or enable personalized communications and follow-up. For that, you’d want to use our parent company, MarketSmart’s software platform. 

Personalized Engagement

The idea with MarketSmart is to identify potential major donors who may be lying in plain sight in your donor database. But because they haven’t exhibited the typical indications of a major donor, you don’t know who they are. 

With MarketSmart’s automated and personalized email communication system, you can begin sending surveys and other engagement-level content that allows supporters to reply and share at whatever level of interaction they’re comfortable with. 

Then, the system replies and deepens the relationship – based on their responses and level of engagement. 

Identify the Business Owners

As part of the survey process, you can ask supporters if they own a business. Any people who respond positively to that question can then get nurtured with an eye toward their entrepreneurial characteristics. They will respond to content you send and offers you make in ways other supporters might not. 

Deepen the Relationship

Once you’ve identified your entrepreneurial supporters, you can continue sending personalized communications that will deepen the relationship, respect their preferences and boundaries, and allow them to opt in for more and more involvement. 

Over time, some of these entrepreneurs will step up to become donors or supporters in other ways, and some will become major donors. 

You’ll be able to get your gift officers involved, and because they will already know who the entrepreneurs are in their caseloads, their interactions will start off at a much higher level, and the relationship will deepen much faster. 

It works.

Numerous national nonprofits, organizations, and universities use our system, and they get highly profitable results. That’s why they stay with us for so long. See what some of our clients have to say.