Can high-growth businesses combine a successful revenue model with charitable giving? We look at some of the UK's most interesting companies looking to prove that doing truly "good" business is possible.
The start of this month saw the 2016 telethon for the BBC's Children In Need. November also happens to be Lung Cancer Awareness Month, Mouth Cancer Action Month, Pancreatic Cancer Awareness Month, COPD Awareness Month, and of course Movember. Along with that, it's currently Anti-Bullying Week.
With such a glut of good causes to choose from, it's hard to know where to start when it comes to donating money. But doing the right thing doesn't have to come at a cost: we've had a look at Beauhurst-tracked startups whose business model involves giving to those in need, and whether you want to use their services or consider investing, there's plenty to tempt the savvy consumer.
A selection of Beauhurst-tracked companies which aid charitable causes
Several tracked companies operate retail businesses, but donate portions of their profits to good causes. One such company is Jake's Boost, which makes free-from spreads (with an emphasis on declining to harm animals or the environment) and donates 5% of its profits to combat child food poverty. Then there's Call of the Brave, a custom clothing company, which makes a point of paying its clothiers (based in developing countries) a living wage, and donates some of its profits to those negatively affected by the fashion industry. There's also Livoos, a luxury fashion brand partnered with 14 charities to whom it donates a whopping 50% of its profits.
More recently, there has been a proliferation of young tech companies whose raison d'être is to help charities grow. Everyclick partners with online retailers to donate a portion of their advertising revenue to charities. Playmob allows charities to fundraise through payments within online games. Givey is a charity platform that encourages employers to match the proceeds their employees receive during charitable fundraisings. Project Dirt is a social network designed to match community projects with volunteers. There are many more.
The 27 businesses we track in this space have raised £14.9m between them. This is an unusually low figure for so many promising startups: what gives? It's possible that investors are averse to ploughing funds into third-sector-focussed organisations on the basis that the sector is not usually associated with profit – but these are high-growth companies, and many large corporations succeed with models that involve donating profits to charity. Indeed, although not a Beauhurst tracked company (they exited in 2009), drinks success story Innocent has always donated 10% of profits to charitable causes.
Looking at amount raised, we can see that by far the most secured has been by The Ethical Property Company, including through an unannounced deal, picked up by our Research analysts, for £1.7m in December 2015 – valuing the young business at over £13m.
Will we see significant growth in the space? Well, charitable giving and fast-growth (that is, revenue) do not obviously go hand-in-hand. But there is greater desire than ever for socially responsible businesses to show the way forward.
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