[alexkearns]

It's all cash in the end, including equity. That cash could be spent on rewarding staff, reinvesting in the business, angel investing another start-up or on a charity.

I personally think 'giving to charity' is the worst option, my reason being that that charity giving is a moral issue and that morals should be left to individuals rather than businesses.

Your employees may find the business's favoured charity morally repulsive. I certainly would not like the fact that 1% of the effort I was giving went to a charity with whose aims I disagreed.

[_delirium]

In a cooperative that's true, but in a capitalist corporation, the equity is owned by whoever owns it, who can dispose of it as they see fit (barring any shareholder agreements preventing certain sales). It's not like Zuckerberg is going to give his Facebook IPO capital gains to his employees, or reinvest them in the business; he's going to put them in his personal bank/brokerage account. If he had donated 1% of the equity to a charity 5 years ago, the only thing that would be different is that his personal account would have 1% less of Facebook stock in it. None of the employees or the other shareholders would be affected.

When it comes to companies spending on things that their employees might find morally repulsive, I think political contributions are a much bigger problem than charity donations. Especially since those actually come from the company's revenues, rather than being taken out of an owner's equity--- I would have much less problem with political contributions if they were donations of stock by the company's owner, rather than checks written out of the corporate budget.

In any case, the most likely thing that 1% would go into if it weren't donated, in the case of startup success, is just luxury goods/travel for the founders. Do you really think a private jet for the founder is morally superior to donating to charity? What if some of the employees are morally opposed to private jets (e.g. on environmentalist grounds)?

[drumdance]

No, it would've hit everyone. That 1% would be dilutive to all shareholders unless he specifically carved it out of his share.

[indiekid]

That's actually not true. The way this is structured, it's the founder's stock that they're actually giving up. They're diluting themselves.

[_delirium]

Since they're asking early-stage startups to donate 1%, I assume they're going to get the approval of all the shareholders. In that case, it's equivalent to each of the them donating a portion of their shares.

If it's diluting shareholders who don't approve of the donation, then I agree that's different.

[ttt_]

>> morals should be left to individuals rather than businesses

Good enough description for the state of world.

It's easy for the individuals that make business decisions to ignore morality since you are cutting them the slack.

Ignore the fact that business "morals" have much broader impact than the morals of any indivual.

Enter BP, Exxon, Monsanto, Tabaco COs, everyone on this list very limited list: http://corporatecrimereporter.com/top100.html.

Sure, businesses don't need to account for morality.

Just to clarify, I'm probably taking what you said a bit out of the context, but I think it's worth pointing out nonetheless since you phrased it that way.

[alexkearns]

Firstly, businesses don't have morals. It is ridiculous to say they have. They may have a culture but they don't have morals.

Secondly, saying that morals should be left to individuals does not mean that individuals who run a business should not act morally and seek to have his company have a positive impact on the world.

But what an owner of a business considers morally right may well be different from what some of his employees think is morally right.

I probably disagree with your morals. And you likely will not agree with mine. But at least neither of us is forced to work for an organisation that funds a charity of the other's choice whose aims we personally find morally offensive.

[cscheid]

> Firstly, businesses don't have morals. It is ridiculous to say they have. They may have a culture but they don't have morals.

A legal person taking voluntary actions which have moral consequences must be said to have morals, in any sensible definition of the word.