How To “Do Well” While “Doing Good” in Business

I have been back home in Hawai’i since New Year’s Eve.

My mom turns 90 this month, and she has two older siblings still living; my aunt Hatsuko (99 years old!) and my uncle Masa who’s 92. It’s been a blessing to spend time with them and my extended family and to reconnect with friends and classmates (Punahou ‘79). 

I’ve also been mixing business with pleasure.

I met with my friend Marla Momi Musick, who is the Director of the MBDA (Minority Business Development Agency) of the Enterprising Women of Color Business Center at the YWCA in Honolulu. We are laying the groundwork for a course on helping women business owners grow and scale their businesses, to get them ready for and comfortable with  the next steps – whether that’s applying for a loan or raising capital.

I’m thrilled to help women take their businesses to the next level.

One of the things that came up in conversation with Marla is how many early-stage women business owners in Hawai’i are impatient to have a charitable impact on top of an economic one.

It makes total sense, but it can be a double-edged sword.

For background, Hawai’i has 9,164 charitable organizations and 1.4 million residents. That’s one charity per 152 people! Hawai’i, unsurprisingly, is a generous place. Hawaiian and Asian cultures, generally speaking, value the collective over the individual, and living on islands tightens bonds and fosters interdependency.

That women are pro-social and more charitable than men is well-documented. 

Women give more of their wealth and give more often. No matter the motivation – whether it’s reinvesting in the community, righting wrongs, or alleviating suffering, women are more philanthropic than men. They may have less money to give, but they are more inclined to give. 

But starting a charitable organization is not the way to go.

For one, it’s like starting a whole other business. 501c3s (U.S. Non-profits) have boards, operating and reporting requirements, and have to file financials. For another, you may not create the impact you want, and you’ll have spent your energy and money for less return than you’d expect.

You risk neglecting your business and having little charitable impact.

People who like to start things are often not those who love to manage things. (Ask me how I know. 🤣) Turning an idea into a reality, and a profitable one at that, is orgasmic. But making shit happen through sheer willpower and creativity is not the same energy as implementing processes and systems, and managing people.

Doing good while creating something new feels good.

But you might do more good if you don’t scratch that entrepreneurial philanthropic itch, at least not until your business can reliably throw off enough cash to fund the infrastructure even a small foundation needs.

Use leverage instead. Your business will thank you. So will your mental health.

Whether you’re a business owner or a generous soul, here are ways you can have fun, be creative, raise a shit ton of money for causes you believe in, and have it be less stressful, good for business and your soul:

1. Become a donor to your local community foundation (U.S). Community foundations act as donation aggregators for a geographic area. They already have a charitable infrastructure, so more of every dollar you donate can be put to use in a qualifying organization or to fund scholarships. 

Rather than 1000 donors creating a 1000 foundations, a 1000 donations can flow through one organization. All those duplicate costs are gone so more money goes to charity. It’s a lot more efficient and your money works harder. Your business (and your life) benefits from your full attention, and you can direct your donations to the cause(s) you want to support.

2. Create a donor advised fund at a financial services fund like Fidelity or Vanguard. Here you set aside money that can grow tax-deferred, while you also get to direct donations to the organizations you support. This structure is a tax-efficient way to donate illiquid or highly-appreciated assets that a charity would otherwise have difficulty accepting, or that you’d have to sell and only be able to gift them the much-smaller after-tax proceeds. Meanwhile, in the U.S. you can take the full deduction of your contribution, even if you haven’t given it all away. (You can’t get this money back, which is why the IRS will let you deduct the full amount). You have all the fun of giving, but in a tax-efficient way.

3. Donate a percentage of your sales or profits to a specific cause that’s related to your business, (or that you care about, because you are the soul of your business). You can structure this as a permanent percentage of sales or profits, though unless it’s a big %, you may not get credit for it from your customers.

Consumers have become very cynical about marketing B.S.

You’re better off doing something remarkable, so you stand out from the crowd. Take a page out of marketing maven Simone Grace Seol’s playbook. She promised to donate an entire month of sales to help Ukrainian refugees, and she raised $250,000+!

Photo by Clay Banks on Unsplash

A grand gesture is a great motivator.

Both you and the customers who were sitting on the fence waiting for an excuse to buy now can be part of something bigger and exciting. You have fun marketing a noble cause, and they have fun knowing that their purchase will do good. 

Here’s why it works.

As an entrepreneur, you probably like novelty, so you’re going to get fired up marketing the “same old product” in a completely new way. 

Maybe there’s been a specific crisis in your world you’d like to help. This creates urgency for your buyers and you.  

Maybe you can’t afford a month of sales. Make it a week! Make it three days! Make it a day! Just let your enthusiasm rip for a finite period and let your community get excited with you. 

You also have the benefit of showing more credible results quickly, which is much better than a bland, boring, not-quite-believable “5% of profits go to XYZ charity”. Why is the latter not as credible? There are a lots of ways to minimize reported profits if one wanted to fake philanthropy for marketing purposes. (Ewwww. Gross). Donate all your sales and report the specific number? That’s awesome! 🙌

4. Use your business as a creative fundraising vehicle. If you’re a bakery, let your customers pay for the privilege of naming your latest creation, or auction off your prize recipe and a baking lesson! You’ll have fun, raise money for a good cause (maybe a culinary training program for women recently released from jail?) and create a lot of buzz, with enthusiasm and utter lack of self-consciousness!

Your cause and your business benefits, which is a good thing, because the better your business does, the more good it can do, and the happier you are, you beautiful soul, you.

Channel your entrepreneurial instincts.

Apply your genius to leveraging the business you already have, rather than creating another entity that requires care and feeding.

Have fun with your business while raising money for your causes.

Leverage the philanthropic infrastructure others have built while still directing dollars to the charities you support, in a tax-smart way.

You got this!

P.S. Want to brainstorm fundraising ideas while using your business as a conduit? Reply YES! The first 5 responses will get a free one-hour consult with me to come up with at least 3 ways you can partner with your business to raise money for your favorite cause. Let’s see what magic we can create and bestow upon the world!