Can You Build a Founders Pledge Program Outside of Higher Ed?

Yes! Any nonprofit organization can build a founders pledge.

In fact, independent organizations like Founders Pledge (UK) and Pledge 1% run large founders pledge programs. They focus on the donor side (the startup community) rather than any one cause—similar to community foundations. They give startups and executives the opportunity to commit equity, product, and time to a range of organizations.

Their value proposition — the reason companies and executives might want to join — is different than that of a university-based platform like the Dartmouth Founders Project. Both flavors add much to the landscape of this new philanthropic area.

I’ve written a bit about how founders pledge platforms can unlock more than donations when built into a university entrepreneurial ecosystem (see “What is a Founders Pledge?”). In these cases, they can also boost innovation by leveraging a university’s intellectual firepower and crackling entrepreneurial energy. 

But how would it look in a community- or cause-based organization?

The essence of a founders pledge is a heartfelt promise.

First, let’s review what a founders pledge commitment actually is. It is a donor’s promise to share the wealth with a charitable organization when their startup grows. This core intention varies in structure from one pledge program to another. 

Founders Pledge UK requires a binding commitment of 2% of a member’s equity, for example. UCLA requires a pledge of $10–25k worth of shares based on the current share value, or cash. Some programs require only the merest whisper of a commitment — non-binding, nonspecific, but still effective. 

The promise provides the foundation for all pledge programs. A donor makes the pledge when he or she says, “If I do well on the difficult startup road ahead, I will share the rewards of my venture with you. Let’s make a difference together.” 

That same promise can be made at any time, by any entrepreneur, to any organization — whether it’s written down, or simply a personal vow made by a hard-working founder who wants to give back someday. 

Build on that commitment using your organization’s raw materials.

What community- or cause-based nonprofits can do, then, is figure out how to recognize donors who have that intention and those assets. They can create new ways to celebrate a founders pledge commitment. If possible and desirable, nonprofits can also steward pledge members through special programming.

Consider the available raw materials when developing your organization’s founders pledge. What entrepreneurial community do you have among your constituents? Have you identified these donors already, or will you have to search for them? How can you market to them? Do you have entrepreneurial resources to offer that might attract even more donors? Or is it more about providing a flexible giving alternative to those with philanthropic intent, but few liquid assets? Will your staff need training to recognize prospects and pitch this effectively?

Independent founders pledge programs will look different than the platforms built in Higher Education.

Fully-featured founders pledge platforms, with associated innovation programming and resources, will exist primarily in Higher Education. Here are some thoughts about how a founders pledge vehicle might look in your community-based organization.

A value proposition based on flexibility. The value proposition for these pledge members is about accessing flexible philanthropic options. Donors who care about a particular cause, and expect their illiquid assets to grow, can signal their philanthropic intent. They receive stewardship and begin their philanthropic education earlier.

Different approaches to marketing and growth. The growth dynamics of your program will vary based on the ‘raw materials’ above. Most nonprofits don’t have an obvious constituency for a founders pledge. Neither do they have innovation-related resources to spur referral growth. Development and research staff are also less likely to have expertise around startups.

As a result, these founders pledge programs will be smaller and slower-growing. That’s ok! Scale your effort and dollar investment accordingly. Nonprofits with membership programs, or groups for emerging philanthropy, have an advantage here. Marketing should focus on prospect discovery, and feature the flexibility and potential tax benefits of this commitment.

Less ancillary programming. Traditional benefits and recognition are easy to deploy, and require little specific startup expertise — stick with that for now. Emphasize education about philanthropy and your organization’s impact. In Higher Ed, program benefits focus on recruiting, networking, visibility, and special experiences. Nonprofits can borrow from these ideas to make the most of their own raw materials. 

Opportunity for partnership with community foundations or independent founders pledge organizations. Given their smaller scale, some programs might want to collaborate with community foundations. Foundations might partner with multiple nonprofits, providing limited collective benefits/programming to their founders pledge members. Foundations can also provide infrastructure and expertise as the donor’s liquidity event approaches. Few nonprofits have the resources to accept gifts of closely-held stock — nor should they. When gifts of private shares make sense, community foundations can provide valuable support through their donor-advised fund options or other vehicles.

While I do believe that a founders pledge platform has unique utility in Higher Ed, I also know these programs can flourish across the philanthropic sector — not just in universities.

I’m not aware of any community- or cause-based nonprofits that currently field a founders pledge program per se, but they may well exist. If your organization regularly accepts closely-held stock, consider whether it’s worth marketing that feature under the aegis of a founders pledge program. If you’re exploring or running a program like this, please reach out or comment below! I’d love to learn more about its history and progress.

“It is a donor’s promise to share the wealth with a charitable organization when their startup grows...That same promise can be made at any time, by any entrepreneur, to any organization.”