Donorship as Business — These Businesses’ Created Charitable Endeavors as Models for Success

by | Feb 1, 2021 | Business

Companies across all market sectors are beginning to realize the value of donorship as a business model. This term applies to companies that include charitable donations as part of their business model instead of an afterthought. In recent years, the corporate social responsibility trend encouraged companies of all sizes to give back to their communities through charitable endeavors of all kinds. The emerging trend of donorship as business takes this concept a step further and incorporates charitable efforts into the company’s operating model.

Some may wonder how companies can afford to operate when part of their revenue stream is functionally dedicated to charity. The answer is actually quite simple: modern consumers are more conscious of where they do business than ever before. Most of them prefer to do business with companies that are clearly committed to making the world a better place.

Generational Interpretations of Donorship as Business

We have all seen the generational friction that exists between Millennials and Baby Boomers in some way. While Millennials accuse the Baby Boomers of ruining the economy in their youth and leaving their grandchildren to deal with the fallout, Boomers, in turn, accuse Millennials of all society’s current ills. The reality is that the shift toward donorship as business really started with the Boomer and Gen X generations but took off with Millennials. All of these demographics stand to benefit from this new trend.

Modern consumers of all age groups need to understand the current trend seen among American companies of focusing on social improvement and donorship. While older generations could see this as a misunderstanding of the “true purpose” of doing business, which in their minds is nothing more than making profits for the benefit of their shareholders. Those holding this rigid view often fail to realize that those shareholders’ attitudes and goals have shifted dramatically in recent years.

Ultimately, donorship as business could potentially help bridge generational gaps and encourage Americans of all ages to support businesses that are clearly committed to enabling positive changes in the world. Modern consumers are now making more purchasing decisions based on a company’s values and efforts toward improving society, not just the quality of their products and services. It’s vital for business owners and consumers of all generations to understand how corporate social responsibility works and the benefits of exploring the potential of the donorship as business method of running a company.

Companies Taking the Lead on Donorship

The trend of corporate social responsibility has encouraged many companies to consider their ability to make positive changes, even passively, by supporting causes that align with their customers’ values. Donorship as business takes this a step further by making a charitable effort a key component of the company’s operating model. This approach takes tremendous fortitude and dedication, but the results are clear and overwhelmingly positive.

If you are wondering what the donorship as business model looks like in practice, both established companies and new companies are making concentrated efforts to take this trend to its upper limits. They are also encouraging their partners to do the same:

  • TOMS Shoes has developed a unique one-for-one donorship model, meaning that the company donates a pair to developing countries for every pair of shoes they sell. TOMS Shoes offers consumers the unique value proposition of not only buying a great pair of shoes, but also supporting communities in developing countries with their purchase. This business model ensures that every customer has two things to feel good about every time they do business with TOMS Shoes: a great product and a great cause.

  • Two Blind Brothers is a unique clothing manufacturer, and all clothing they produce is manufactured by the blind. Blind people are typically one of the most disenfranchised when it comes to work opportunities, and all profits go toward blindness cure research efforts. Many companies have focused on hiring disabled employees to provide them with work opportunities most other companies don’t offer. This is one of the most compassionate donorship business models you can find today.

  • Bombas is an apparel brand that holds to a similar business model as TOMS Shoes. Whenever a customer purchases socks or t-shirts, Bombas donates the same clothing item to a homeless charity or shelter. One-for-one donorship business models like this are sure to gain even more traction as companies realize that these business models are incredibly effective for encouraging positive change and simultaneously increasing brand awareness.

  • Omaze has developed a sweepstakes-style business model that encourages donations. While the company takes a percentage of donations, donors have the chance to win anything from dinner with a celebrity to a sports car. Since launching in 2012, Omaze has donated hundreds of millions to more than 350 charities.

These are some of the best recent examples of companies taking corporate social responsibility to the next level and implementing donorship as a primary component of their core business models. Many established companies that have not gone to this extent are still finding ways to enable and encourage positive change in the world:

  • The McDonald’s Corporation has operated the Ronald McDonald House Charities for many years, focusing primarily on funneling donations to assist families struggling with medical bills for their sick children. The Ronald McDonald House Charities support more than 680 programs worldwide in 65 countries providing housing and meals to families experiencing financial instability from medical expenses.

  • The Nike Corporation has developed multiple charitable initiatives intended to bring the joy of sport and competition to struggling communities across the world. Nike has also developed many different equality-focused initiatives designed to break down societal barriers and increase acceptance for the marginalized.

  • LEGO is one of the most celebrated brands among the world’s children, and the company has made significant efforts through the LEGO Foundation to encourage learning and creativity through play. LEGO also supports donation campaigns that encourage people to donate their old LEGOS to children’s hospitals and homeless shelters.

  • BMW is one of the most treasured auto manufacturers in the world, and the BMW Group has announced several recent charitable initiatives to support efforts such as the Red Cross, the Woodcliff Lake Educational Foundation (WCLEF) Run for Education, and Table to Table, a community-based food rescue program aimed at reducing hunger and food waste.

There are many more examples of companies of all sizes taking charity and social responsibility to the next level. As a business owner, no matter how large or small your company may be, it’s vital to consider the incredible impact these companies’ efforts have had on people all over the world and consider how to implement these ideas into your own business model.

Benefits of Exploring Donorship as Business

If you own a business and want to start making more of a positive impact on your local community and the world, you don’t need to reinvent the wheel and upend your entire business model to make it happen. Corporate social responsibility can take many forms, and there are several ways any business owner can incorporate issues that matter to them into their business model. These efforts will not only highlight your corporate values to consumers and boost the bottom line but also make tangible changes for the positive in surprising ways.

For years, corporate charity was on the decline due to the outdated idea that a corporation belongs to its stakeholders. A corporation making a unilateral decision to donate to charity may not align with its main stakeholders’ wishes. However, markets and consumer attitudes have shifted dramatically in just the past few years. Modern consumers are more discerning than they have ever been and now have instant access to extensive research on any company they wish.

While Millennials have spearheaded the trends of corporate social responsibility and donorship as business, they have seen consistent support from Gen-Xers who grew up in more volatile economic times and have witnessed more corporate ruthlessness than the younger generations. While Boomers typically decry the motives and intentions of Millennials today, the reality is that the effort to encourage more corporate social responsibility often benefits Boomers more than most. Many of the charitable efforts modern companies are driving support medical care and social services that older Americans take advantage of the most.

Companies today now know that they can not only meet their fiscal responsibilities to their shareholders, but also encourage positive changes in society through social responsibility and donorship. Modern consumers now expect to see this, and Millennials are some of the most demanding when it comes to their expectations of corporations making sound decisions and improving the lives of others. They are also some of the most supportive of companies that have invested in these efforts.

How to Implement Social Responsibility and Donorship in Your Business Model

Every company is unique, and you may struggle to think of ways your organization can successfully implement a social responsibility or donorship program. Try to refocus your profit-driven perspective and carefully consider every facet of your current business model as you think about the charities and social efforts that are most meaningful to you and align most with your company values.

For example, if you own a product-focused business, consider the types of products you make and what regions and demographics would benefit most from those products. While some business owners may initially balk at the idea of adopting a one-for-one donorship policy like TOMS Shoes, the reality is that this type of donorship-focused business model is more viable than some may realize. What your organization would likely “lose” in donated products it would gain back in increased reach, brand awareness, and customer loyalty. Once consumers notice that you are committed to improving the lives of others with your products, they will be much more likely to support your brand long-term.

Sponsorship is another great idea for a business owner who wants to make positive changes to the world. Find a charity or nonprofit organization that aligns with your company values and has a solid track record for positive results, and start exploring your options for sponsoring their efforts. This could be in the form of donations to make customer donations, sponsored events, or specially branded products that ensure a portion of every sale goes to your charity of choice.

Another important area of consideration for any product-focused company is sustainability. Modern consumers, especially Millennials, are more concerned about environmental responsibility than ever before. If your company has any type of environmental impact, it’s essential to consider potential alternatives or adjustments to your supply chain that could make your company more sustainable. Roughly two-thirds of all consumers are more inclined to purchase products from sustainable companies, and more than 70% of Millennials report that sustainability is a major consideration for every purchase.

Potential for New Business Owners

Altering an existing business model can be very difficult, even if you have good intentions to explore social responsibility and donorship in your new operational strategy. However, it is not impossible. Exploring these trends will likely be easier for fledgling business owners and startups that haven’t fully started their operations yet. If you are in the process of developing your new business model, it’s a wise idea to think carefully about donorship as part of your business model.

It’s possible to hit the ground running with a solid business strategy that not only helps your company succeed in the long run but also significantly increases your reach by resonating with the majority of modern consumers. The publicity and positive results your efforts generate will have a snowball effect, cultivating customer loyalty and establishing your brand as a socially responsible one committing to improving others’ lives however you can.

Every business owner does indeed have a fiscal duty to their investors and shareholders to increase profits and ensure growth. While some business owners trapped in an outdated mindset may fail to realize the incredible potential of the donorship as a business model, those that embrace and practice the trend are likely to forge stronger bonds with their target audiences. They will likely attract customers they may otherwise have never expected. Take time to investigate how modern companies are reshaping their strategies to enable positive changes in the world. Start thinking of ways to put your personal and company values into practice by creating a more sustainable, socially conscious, and charitable organization.


Jack Clark