Why Entrepreneurs Should Make Philanthropy a Core Part of Their Company


In today’s world, businesses that embrace philanthropy not only contribute to society but also gain significant advantages over their competitors. Companies like Ikea and Lego, known as “PhilCos,” benefit from better employee morale, lower turnover, and greater longevity. This article explores why entrepreneurs should integrate philanthropy into their company culture.

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A Personal Story of Change

A Life-Changing Experience

In 2013, I faced a near-death experience while climbing the Matterhorn with my son, Harry. After falling twice and suffering a severe leg injury, I was rescued by a helicopter crew. This incident made me realize the importance of life and prompted deep reflection during my recovery in the hospital.

Finding Purpose

  • Reflection: I pondered my life’s purpose and the mission of my company, Reed Group.
  • Company Mission: We decided to focus on “improving lives through work,” a simple yet powerful guiding principle.

The Importance of Purpose in Business

Philanthropy can guide business decisions and create a positive impact on society. Here’s why it’s essential:

  • Balancing Goals: Companies can achieve both profit and social good, addressing issues like economic inequality and mental health.
  • Current Landscape: The UK has one of the highest levels of inequality in Europe, with many people out of work and struggling with mental health issues.

The PhilCo Movement: A New Model for Business

What is a PhilCo?

  • Definition: A Philanthropy Company (PhilCo) is a business that is at least 10% owned by a charitable foundation.
  • Goal: To integrate philanthropy into the company’s ownership structure, making it a part of their identity.

The Success of PhilCos

  • Example: Reed Group has transferred 18% of its shares to the Reed Foundation, which supports numerous charitable causes.
  • Impact: Our employees contribute one day a week to charitable work, and the foundation has launched initiatives like the Big Give, which has raised over £300 million for various charities.

Evidence of Effectiveness

Research shows that PhilCos have several benefits:

  • Higher Staff Morale: Employees feel more fulfilled and engaged.
  • Longevity: In Denmark, foundation-owned companies have a 30% survival rate after 40 years, compared to only 10% for other companies.

Building a Community of PhilCos

We aim to create a network of businesses that adopt the PhilCo model:

  • Charitable Commitment: Each company should have at least 10% of its shares dedicated to charitable purposes.
  • Recognition: We plan to introduce a PhilCo hallmark to identify these companies.

Conclusion: A Call to Action

Philanthropy is not just a moral choice; it’s a strategic business decision that can benefit both society and the company. By adopting the PhilCo model, entrepreneurs can create positive change and foster a new culture of corporate responsibility. As individuals and organizations, we have the power to do good and make a lasting impact on people and the planet.


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