Creating a Pro-Bono Marketplace: The Role of Small Business and Family Enterprise in this Eco-System
This past week I had the opportunity to work with a number of businesses, family foundations, corporate foundations and charities exploring the role that the Pro-Bono system works in Canada. The summit was facilitated by the Taproot Foundation in partnership with the BMW Foundation and convened at Wasan Island in partnership with the Breuninger Foundation and the McConnell Foundation.
There are four key stakeholders in the pro-bono market: those who provide the pro-bono services, those who receive or benefit from those services and those who fund the activities either directly or indirectly. At the intersection of these three stakeholders are the intermediaries (fourth stakeholder) – those firms or individuals who facilitate the connections between stakeholders. These intermediaries can be virtual (platforms like Taproot Plus) or face-to-face like Endeavour.
The pro-bono model began in the legal profession as it was part of the code of conduct of lawyers and required by the Bar Association. Since its integration in this profession, pro-bono services have expanded into other professional areas including management consulting, marketing and IT. According to a briefing document provided by the Taproot Foundation, “Pro-bono service is the fastest growth in employee-volunteering program with the percentage of member companies offering pro-bono services growing from 40% in 2012 to 51% in 2014.”
During the course of this summit we defined pro-bono services as those professional services that are offered free-of-charge the specifically address a capacity or operational need of an organization. The idea is that the service(s) offered will have lasting, long-term impacts on the recipient charity.
In exploring this space from the perspective of my clients, the small business and/or family enterprise, pro-bono services are often provided and rarely documented or formalized. “It just is our way of doing business,” says Jamie Moorhouse of Talking Light Media.
This way of business is also part of the core client base of a number of small companies. Take The Agency for example. Arleigh Gallant Vasconcellos has been providing professional services in the area of PR for a number of charities over the past decade. While her core business is in the tech sector, she does have charity clients and has had to create a way to determine which of the charities she will provide services for free and which ones will be paying customers. This balancing act is something that all small businesses that rely on charities for their core business go through... the cost-benefit analysis of “doing good.”
Some of the Provider stakeholders during this set of conversation same from large companies – Boston Consulting Group, Accenture and BMW. For them one of the key motivators for offering pro-bono services is a matter of attracting and retaining a workforce and not necessarily looked at within the context of the whole company’s bottom line. For a small business to offer up free professional services, where that offering is their bread and butter, the motivation is different. It would have to be as there is a direct impact on profitability that can be immediately felt as opposed to the larger firms where the lost revenue can be more easily absorbed.
This got me thinking about the business model of pro-bono where there are charities seeking out services and vendors who are prepared to offer them, but for the small business there is a significant cost to wanting to “do good.”
What if there was a way to reward the small businesses for offering up pro-bono services? That reward could be in the form of tax incentives or preferred lending rates from financial institutions. In the case of the former, the tax incentives could be for investors who take an equity stake in a company that provides a certain amount of pro-bono services per year OR additional tax write-offs/credits for the businesses themselves to reduce their profit margin because of the pro-bono offerings. In the case of the latter it would be in credit card rates and/or loans for capital projects that are reduced because of the net social impact that the company offers back into the community.
If we will reward individuals who donate cash by giving them tax incentives, and we will reduce lending rates for charities that are providing mandated social services in our communities, it seems reasonable to include the investors in the incentives equation.
October 23rd kicks off Pro-Bono Week in Canada. Between now and then I will be featuring small businesses and family enterprises that have integrated pro-bono services into their business practise. If you would like your story shared, please send me a brief post about your company and the charity(ies) you have supported through pro-bono offerings (professional services, not just donated time or product) and how. I will try to post as many stories as possible over the coming weeks.