The world’s biggest VC firms are backing Pledge 1% to help startups donate $6.5 billion to charity

- June 9, 2021 3 MIN READ
Amy Lesnick, Pledge 1%
Amy Lesnick, President and CEO of Pledge 1%
Philanthropic movement Pledge 1% has partnered with the world’s leading venture capital firms with a goal of donating A$6.5 billion (US$5bn) in new charity funding over the next five years.

The new program, Boardroom Allies, will see a group of leading US and global VCs, including Australia’s Blackbird Ventures, commit to helping portfolio companies set aside stock for social impact on path to IPO.

In the past year, more than US$1 billion in new philanthropy emerged from companies such as Coinbase, UiPath, and Unity under Pledge 1%.

The global philanthropic movement – co-founded in 2014 by Australian tech giant Atlassian – encourages and empowers companies of all sizes and stages to donate 1% of their staff time, product, profit, and/or equity to any charity of their choosing.

Some of the biggest names in tech from Slack to Adobe, Zoom, Bullhorn, Twilio, Yelp and Salesforce, have taken the Pledge, which collectively, has already ignited billions of dollars in social impact funds.

More than 1,400 Australian companies, from new startups to tech unicorns have joined the Pledge 1% movement, including Canva, Envato, SafetyCulture, Humantix, and Blackbird.

The VCs involved include Andreessen Horowitz, Bessemer, Bain Capital, Salesforce Ventures, Accel, Techstars and Foundry Group.

The VCs have set a goal of finding unlocking $5 billion in new philanthropy over the next five years by partnering with Pledge 1% to advise their portfolio companies on how to set aside equity for social impact prior to their liquidity events.


A business imperative

Laela Sturdy, General Partner at CapitalG and UiPath board member, said that Boardroom Allies will play a pivotal role in ushering in a new era of corporate giving.

“This past year, we’ve seen more companies demonstrate that they have an important role to play in tackling the toughest challenges of our time,” she said.

“Shareholder, employee, and customer expectations are changing. It’s exciting to see business leaders step up to meet this moment by leveraging their assets to address pressing social, environmental, and racial justice issues. Doing so is not only the right thing to do; it’s also a business imperative.”

Pledge 1% developed a step-by-step guide for companies to formalise equity pledges: the CEO Playbook and a Companion Guide for CFOs and GCs.

A key strategy outlined in the CEO Equity Playbook is finding and leveraging a boardroom ally to serve as a thought partner to the CEO as they navigate equity model selection, timing, and building a coalition of board support.


Advocate for change

Amy Lesnick, President and CEO of Pledge 1%, said Boardroom Allies was born as a vehicle for VCs to advocate for change.

“Boardroom Allies is a first-of-its-kind alliance of forward-thinking investors from top VC firms who’ve committed to helping companies set aside equity for social impact — not only because it’s the right thing to do, but because it’s also a smart business decision,” she said .

“The launch of this program represents a major milestone in our goal of empowering all companies to leverage their assets for good, and gets us one step closer toward a world where setting aside equity for social impact is the norm.”


A natural step

Neeraj Agrawal, General Partner at Battery Ventures, said they were seeing a new trend of companies setting aside equity prior to an exit to sustainably fund their social impact and ESG efforts for years to come.

“By providing equity model standards, a definitive CEO playbook, and experienced consultation, Pledge 1% has been fueling this trend,” he said.

Byron Deeter, Partner at Bessemer Venture Partners said that an equity pledge should become an increasingly a natural step towards IPO readiness

“We imagine a future in which an equity pledge could be part of every significant technology S1 filing as customers, employees, and investors put increasing value on how companies show up as corporate citizens,” he said.

To learn more about how to set aside social impact at your startup or join the alliance of VCs as a Boardroom Ally, email [email protected] or visit pledge1percent.org.


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