Why many successful entrepreneurs become involved with charities

As an entrepreneur, your main goal is to build the sort of sustainable business that is going to turn a profit over the long term. So, for many people, it’s difficult to understand exactly why a busy entrepreneur with all sorts of reasons to pursue profit-making might decide to instead become a charity leader. But the reasons why so many entrepreneurs become philanthropists are, in fact, diverse and interesting. 

Entrepreneurs have often, for example, had to pull themselves up by their bootstraps in order to get to where they are today – and very few forget where they came from. And either way, entrepreneurship requires hard work, and using wealth to empower others to work hard is a great way to extend the cycle and pass on benefits in a sustainable way. This article will explore what these reasons are.

Past histories

Those who climb their way up the ladder of entrepreneurship have often had to make some kind of personal sacrifice in order to get to where they are. Perhaps it was a sacrifice to do with their family; a reduction in the amount of time spent together. For those who climb the ladder of an existing business, it’s not always as complicated. But being an entrepreneur is something completely different. It requires a commitment to make personal sacrifices in order to succeed and working against the odds for that goal.

That’s one reason why many entrepreneurs have an eye on wider society as well as the world of business. As people who have made sacrifices in order to achieve what they consider to be a mission, it’s no surprise that they are also the sort of people who can see how philanthropy can help. Entrepreneurs such as Charles Phillips now lead charitable boards composed of those with difficult pasts. Giving something back, then, is an appealing idea to many.

Empowering others

Ask some entrepreneurs to name five qualities in other people which helped propel them to success, and it’s likely that “an ability to give help and advice” will feature highly on many of the lists. That’s testament to the network effect that operates in many business spaces. Successful entrepreneurs, with their community-minded sense of mission as well as their good business sense, are often the most capable of understanding that working together is better than working alone.

As a result, many entrepreneurs choose to set up charities which help other entrepreneurs get to their same position of success. They may, for example, set up a mentoring network which links up new businesspersons with those who are already established. Or perhaps they will elect to set up a foundation which helps people from disadvantaged backgrounds to pursue their own business ideas and secure the venture capital or other investment needed to propel themselves forward. 

Corporate responsibility

The words “corporate social responsibility” can arouse suspicion in the minds of many, as it’s often associated with the idea of firms using charitable giving as a way of distracting attention from whatever their business practices or field of entrepreneurship might be. But that’s not always a comprehensive way of looking at it. Corporate social responsibility is not just a distraction: it’s a way for entrepreneurs who have created successful, wealthy businesses to redistribute that wealth. 

Charitable foundations which are created in the name of companies or individual entrepreneurs may have a positive impact on that company’s reputation, then, but that doesn’t mean there’s no benefit to wider society, too. The two aren’t mutually exclusive – and as the experiences of many major charities such as the Bill and Melinda Gates Foundation have shown, sometimes the charitable side of an entrepreneur’s life can live on longer than the profit-making side.

A new challenge

Entrepreneurs have always had to overcome challenges of one kind or another. Whether it’s regular rejection from venture capitalists or simply a dawning realization that going back to the drawing board is necessary in the face of rejection from customers – challenge is an inevitable part of the process. And given that there are so many challenges on offer in the wider world when it comes to social and cultural problems, it’s no surprise that many entrepreneurs want to try something new. From creating organizations to finding the right staff to solve specific problems, there are plenty of transferable skills from entrepreneurship to charity

Entrepreneurs may be whizz kids when it comes to turning a profit – but they’re also often socially and culturally minded, too, often as a result of past experiences. They are willing to turn their hand not just to commercial challenges but to charitable ones as well, and they’re also often willing to give something back to their communities through corporate responsibility. As the track records of many successful entrepreneurs have shown, many a successful entrepreneur has subsequently made a name in the world of charity.

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