1% for Humanity: Business Giving Back

By Kevin D. Hendricks | November 10, 2010 at 10:00 am

One percent isn’t much. But Nick Pearson thinks it can change the world.

After a taste of the corporate life Pearson wanted to do something more. He’d heard about the litany of causes — the children dying every day, the vast numbers in slavery — there’s a global emergency going on, but you wouldn’t know it from our consumer society. He founded the nonprofit 1% for Humanity as a way to tap into that affluence and do something more with it.

1% for Humanity encourages for-profit businesses to donate 1 percent of their annual sales to humanitarian nonprofits. One percent may not sound like much, but it can mean the difference between life and death.

Rather than collect and redistribute donations, slowing the flow of aid, businesses donate directly to nonprofits. 1% for Humanity then certifies their donations annually as a third party. Pearson founded the organization in 2009 with Jedidiah Clothing as the first member.

What prompted you to start this organization?

This model has already been used successfully by others for environmental fundraising, but no one was doing it for humanitarian needs. I saw it as a unique opportunity to drive revenue to nonprofits addressing poverty and injustice. There’s so much need out there and so many good organizations that require more revenue to accomplish their missions.

I’m particularly motivated to see more funds directed towards extreme global needs. Only 3 percent of overall charitable giving in the U.S. is directed towards international affairs (development, aid, relief) yet the level of need on the international scene is an absolute emergency. Twenty-five thousand children die from preventable causes every single day. That’s almost 10 million lives per year. The developed world has the resources to help but it’s going to require much more from the private sector. With cause-related marketing becoming more and more important to businesses there’s going to be an increasingly huge source of funding there for these nonprofits to tap into.

What has just 1 percent amounted to so far? What kind of difference has it made?

We’re just getting started. In 2009 we had five members and they donated over $100,000 to recipient organizations working in various fields around the world, ranging from the protection of children from child prostitution to delivering solar lights to people without electricity. Many of our members give above and beyond the 1 percent commitment, which is really inspiring considering the average corporate giving in the U.S. is about one-tenth of 1 percent of sales. Each member chooses which nonprofits to support and many of them are building long-term relationships with these organizations. For the nonprofits those partnerships become a source of ongoing support.

For business owners out there, why should they get involved?

Eight-five percent of consumers have a more positive image of a product or company when it supports a cause they care about, and 90 percent of consumers want companies to tell them the ways they are supporting causes. For those who want to make giving a permanent part of their business, this is a great way to make themselves accountable to a long-term, ongoing commitment. The 1% for Humanity message is tangible and easy for customers to understand. Basing your donation commitment on a percentage of sales as opposed to a percentage of profits is more clear and more compelling. Also, joining this collective movement is a way for companies to leverage their own giving and inspire more companies to join and duplicate this level of commitment.

For the rest of us, how can we get involved?

For starters, you can visit our website (http://www.onepercentforhumanity.org/) to find out who’s participating and then follow us on Twitter (@1pctForHumanity) and Facebook for future updates. If you know entrepreneurs, artists or company owners who could be interested, let them know about us. We’re a nonprofit as well, so if you’d like to support our work, donations can be made on our website or you can contact us directly.

What have you learned from the experience of launching this organization?

I’m continually learning that nothing seems to happen as fast or as easy as I want it to. I’ve learned that enthusiasm doesn’t always translate into action but when it does it’s completely inspiring. Of course I’ve also learned what it takes to start a nonprofit and get tax-exempt status with the IRS, how to get a trademark registered, and a lot of legal stuff like that.