Philanthropy can make good business sense. In a Fast Company interview, Yvon Chouinard, Patagonia founder and outdoorsman, talks about what companies can do to protect the environment. He helped start an alliance of small companies called One Percent for the Planet. Members donate 1% of their sales to nonprofits working on environmental issues. To alliance members this is a business investment. Chouinard said:
You have to get away from the idea that it's philanthropy. I look at it as a cost of doing business. Every business should say, We're polluters, we're using our nonrenewable resources, and therefore we should tax ourselves. Being part of One Percent is also good for business. The six largest companies in One Percent, including Patagonia, are all reporting that we're now having our best years ever. Think of it as a marketing cost. We'll tell a winery, "Okay, your wines are selling for $10. Charge $10.10. Nobody is not going to buy your wine because it's 10 cents more a bottle. In fact, you can add only 6 cents, because you can write off 40% of your donation on taxes." If you're a gas station and your receipt says, thank you for your purchase; 6 cents will go to the environment, I'll bet a lot of people would go out of their way to buy that gas.
As an investment, the One Percent companies should expect the environmental nonprofits to have the same high quality of management and effectiveness that they expect of themselves. The nonprofits should be continually learning how to improve themselves (See: Developing a Learning Culture in Nonprofit Organizations) and use their precious funds wisely. This should be the agreement: businesses will donate to nonprofits that are doing things they care about; nonprofits will work on making their organizations effective and efficient.