Ashley Boyd is the Vice President, Global Advocacy at the Mozilla Foundation.
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Michael Bloomberg recently announced his plan to transfer his company Bloomberg LP to Bloomberg Philanthropies. This follows a similar move by Patagonia’s founder, Yvon Chouinard, last September. MacKenzie Scott has also made waves by giving large chunks of her wealth from her Amazon stock to hundreds of nonprofit organizations.
Will this approach jump-start charitable giving among the wealthiest Americans? Only time will tell, but putting companies into nonprofit hands offers an innovative approach to addressing the "giving gap."
Bill Gates and Warren Buffett launched the Giving Pledge in 2010, urging the wealthiest to give away the majority of their wealth to philanthropic causes. Since then, over 200 billionaires have joined the pledge, with Buffett and Gates continuing to lead in philanthropic giving. Not many have followed in their footsteps. According to the 2022 Forbes 400, two-thirds of the richest Americans—including many of those who have joined the Giving Pledge—have given less than 5% of their wealth to charitable causes.
Bloomberg and Chouinard’s decision to give their companies to nonprofit organizations was possible because their companies are privately held. The potential social impact created by privately held companies has been overshadowed by concerns about potential undue influence by one person, particularly after Elon Musk’s bid for and now ownership of Twitter. However, privately owned companies have often stood at the forefront of bold stances on social and political issues. For example, privately owned PetSmart has been outspoken and donated money to both animal welfare and racial justice causes.
One major reason: Privately held companies can act on conviction alone, without weighing the financial impact on shareholders should they take a stand. Meanwhile, public companies must “[net] the costs of blowback against the benefits of speaking out,” writes Thomas A. Cole in the Harvard Law School Forum on Corporate Governance.
Socially responsible businesses investing their profits directly into social impact may increase the public’s already growing trust in the industry. In fact, public trust in most businesses and industries is growing, while trust in other institutions in the U.S. is declining.
As the circle of companies owned by nonprofit organizations expands, we at Mozilla are eager to share our 25 years of experience in leading this type of social enterprise. Like LEGO's and IKEA's structure, all of our corporate entities are owned by our nonprofit, the Mozilla Foundation. This includes the Mozilla Corporation (maker of Firefox and other consumer tech products) and the newer Mozilla.ai and Mozilla Ventures.
Based on my experience as the vice president of global advocacy at the Mozilla Foundation, here are three ways this legal structure can advance social causes while also benefiting the businesses they own.
Connecting Markets And Movements
Confronting the most pressing global challenges requires commitment, innovation and action by both social movements and market forces. Advocates lead the effort to identify issues of concern, build public support for solutions and call for effective public policies. Through innovation, building and mass distribution, companies can bring beneficial solutions to scale.
The potential benefits of the movement-market partnership are perhaps most clear in the context of climate change. For decades, advocates have named and proven the existence and mounting threat that climate change presents to humankind. These tireless efforts have transformed global public opinion and sparked intergovernmental and national policymaking. Companies (notably, after decades of denial) are now innovating solutions such as solar power, electric vehicles and desalination, and deploying these products swiftly, both bringing down the prices and achieving impact more quickly.
Mozilla captures this shared mission by ensuring that our products, as well as our philanthropic work, are guided by the Mozilla Manifesto. In this way, each of our efforts is aligned. For example, the Firefox browser consistently develops new, privacy-focused features while our *Privacy Not Included buyer’s guide researches products to help consumers pick consumer technology that matches their values. Together, both efforts align to improve global access to private consumer technologies.
Growing Customers And Causes
A nonprofit-owned business doesn’t have to choose between growing its cause and its customer base. A company owned by a nonprofit has a unique and compelling selling point for potential customers. Increasingly, consumers expect and value companies that have a social mission. A recent Gallup poll revealed that a majority of Americans between the ages of 18 and 44 believe businesses should take a public stance on social issues. Companies that wish to be relevant to this younger generation of customers should seek to clarify and commit to social responsibility—and nonprofit ownership is the strongest commitment possible.
This dynamic is at play frequently at our company. Our nonprofit conducts research and runs campaigns to hold tech platforms accountable for issues like misinformation and harassment. Consumers see these actions—in our emails and in the press—and are then drawn to our products.
Accelerating Social Innovation And Impact
It’s no secret that nonprofit organizations spend a considerable amount of time fundraising and often diverge from their core mission in order to secure needed resources. This approach robs us of our most precious resources for effective change: experimentation and innovation. Nonprofit organizations that have all or a significant portion of their funding provided through corporate ownership can launch experimental work, measure their impact honestly and change course if they aren’t successful—without repercussions from external funders.
About half of our foundation's yearly budget comes from trademark revenues from the Mozilla Corporation, with the remaining funds coming from grassroots supporters and other philanthropic foundations. Not only are nonprofit organizations with diverse sources of funding more resilient and protected from economic jolts, but these institutions also can invest in projects most mission-aligned rather than donor-driven work.
While gifting a company to a charitable organization is hardly a "trend" quite yet, it’s not surprising that socially responsible business owners are looking for innovative and impactful ways to secure their philanthropic commitments.
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