The Surprising Connection between Business and Philanthropy

by / ⠀Startup Advice / April 14, 2013

How Philanthropy Can Run Like a BusinessWhile they’re not often thought of as such, most successful charities and philanthropic organizations operate very similarly to successful businesses. Philanthropists start with an idea to improve their community or even the world rather than make a profit. But to build upon their idea, a business mindset must exist to make the charity survive. Here are a few ways philanthropists must think like businessmen in order to find success.

Your Business Plan

Every successful business has created a business plan, taken the market’s temperature and defined their niche in it. This is a working plan that defines goals, structure, marketing, finances and everything else that makes the heart of the business beat. Philanthropists have to create a ‘business plan’ to really make a difference regarding the issues they are tackling, to explore their donor-base and quantify the impact they want to have on the issues they care about.

Philanthropists must answer specific questions and create a plan of action. What issues are you going to handle? How will you measure success or failure? What structure will your organization have? What are your organizations goals for five year? Ten years? Just like any business, philanthropists have to create long-view for the space they are acting in.

Where do Profits Go?

Every business gives away profits. Fortune 500 companies give their profits away to investors and shareholders. But charities aren’t trying to maximize profit to give back to investors, instead they’re giving profits created by more donations, greater efficiency and growth back to the communities that they serve, either through crucial services or through direct material aid.

Spreading this message to consumers (your donors and the charity’s beneficiaries) is the way to get customer loyalty. Many businesses are distinguishing themselves by their philanthropic efforts and highlighting the benefit they’ve achieved. Whatever your business may be – selling office supplies or renting equipment – if customers know you are not only a business, but philanthropists as well, donors may be more willing to give you their business if you care about the same causes that they do. If you’re a charity, you have to communicate exactly how your existence, and the donations that you take in, are benefiting real people and causes.

Think Local

Many people want to support local businesses. Shouldn’t they feel the same way about local charities? There are people in your community that want to do their part in giving back wherever they live. If you think locally with your methods of philanthropy (even if you’re a national organization), you will not only see the difference you are making, but you’ll gain loyal donors who see you as their philanthropic portal.

By picking local causes and issues, or at least global causes that have a local impact, your community will thank you in return by giving you their donations, media attention and volunteerism. As you incorporate philanthropy into your business, look at issues in your own neighborhood. What will people in your community be interested in donating money to? What are the major issues affecting quality of life in your community?

Whether you’re a business or a charity, these principles apply. The same attributes that make the most profitable and competitive businesses function they way they do can be applied to non-profit causes, driving efficiency in the use of resources and responsiveness to the donors who support your efforts. Whether for profit or no, a disciplined approach is more likely to deliver success.

Mike Russell is a consultant and business expert who writes for, where you can down load a free ebook on entrepreneurship, philanthropy and the keys to fueling your charitable efforts with profits from your successful businesses.

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About The Author

Matt Wilson

Matt Wilson is Co-Founder of Under30Experiences, a travel company for young people ages 21-35. He is the original Co-founder of Under30CEO (Acquired 2016). Matt is the Host of the Live Different Podcast and has 50+ Five Star iTunes Ratings on Health, Fitness, Business and Travel. He brings a unique, uncensored approach to his interviews and writing. His work is published on, Forbes, Inc. Magazine, Huffington Post, Reuters, and many others. Matt hosts yoga and fitness retreats in his free time and buys all his food from an organic farm in the jungle of Costa Rica where he lives. He is a shareholder of the Green Bay Packers.