We strongly believe that successful companies can share with the Community and the environment a portion of its profits. Some advocates of the State, prefer that companies pay taxes instead of giving money to non profit causes. Their argument is that politicians may decide better than us where to allocate resources collected from taxes.
Donations from persons and companies to non profit causes had recently in Chile a major reform, making simpler to donate. Depending to whom you donate, there are some tax breaks.
Anyway all the Chilean companies pay a 20% income annual tax, which can be used by owners as a deduction to their personal taxation. However, it is expected a major reform on this issue for year 2014, as the new government started by President Michel Bachelet in March 10th of this year, wants to raise taxation to companies to fund her educational reform.
I believe that company owners can commit from the creation of the company the purpose to donate part of their profits to the society independently of the taxes paid. It is a simple decision: to share part of what you will gain. When this decision is made right from the start of the company, all future shareholders may decide not to enter to this type of corporation. Others instead, may prefer this pro-community companies.
How much to share? It depends from each company and the percentage of profits over cost they may have. Some are too tight, others are more abundant. When to give? It is also a decision of the company owners. Some may start giving right from the first year. Others may need to get blue numbers before, or pay some liabilities first. But I suggest to put in writing the goals on this matter.
INCORPORATE A FOUNDATION AT THE START OF A CORPORATION
To avoid arguing over this issue, an alternative is to donate from the very beginning a percentage of the initial shares of the business to a foundation or to any non profit, so these entities, like any other share holder, will receive dividends whenever they may happen. Some of the larger fortunes of the world, like Bill Gates, Warren Buffet, etc., are giving away their wealth after decades of accumulating it. I suggest to do it differently: donate part of your company when it is worth little or near to nothing. Why? Because you are deciding to share your life with others, independently of the final outcome of your business. You are making a donation when you are poor, or weak or have little resources, or you have plenty of them. You take this step, because in your philosophy of life, you are including concern about other people. You don't wait until you are a rich person, or get very old to donate. You do it because you are happy for doing so.
When you donate a percentage of the shares at the start, or directly invite a foundation to be part of the opening of the new corporation, there aren't taxes consequences for the future donations of profits. The foundation simple receives dividends for being a share holder.
EMPLOYEES ARE ATTRACTED BY BENEFIT CORPORATIONS
This strong commitment to mankind it is also a powerful motivation for employees to work hard and to stay in a company having this philosophy. It may be a turning point to retain and to attract employees and partners having at the same time hard skills as soft skills. These people are a great asset for any organization because they are balanced human beings.
Beyond those inner benefits, a company having as shareholder a foundation, may be well perceived by the consumers, the government and the public. This is a permanent proof of social leadership and responsible management.
THE TRIPLE BOTTOM LINE PURSUIT
Some have extended this call for helping mankind, creating BENEFIT CORPORATIONS, or B CORPORATIONS, donating at least a 10% of the profits. There is a serie of requirements. However, I think that every entrepreneur can customize his vision and organize a company the most suitable to his personal philosophy. It is not as relevant the type of legal organization you create, as the intention and the practical steps to pursue a global goal beyond the legitimate personal profit. Here and there you listen about foundations not complying well with their purposes, or foundations that are a employment tank for relatives related to the main owners of a company. Or that they gain big wages on this foundation. On the other side, you find businessmen that donate a big amount of their wealth to causes from which he will never receive a monetary retribution. So, what really matters is to share part of your life with mankind trough the organization or trough people you estimate worth to receive your energy.
THE TRIPLE UPPER LINE: THE INNER BENEFIT FOR THE ENTREPRENEUR AND INVESTOR.
Above all, when the light of our candle of life, may not have enough matter to keep illuminating, it becomes more and more important for a human being, the inner balance built trough our life. Businessmen spent their life studying and delivering to other parties, reports and reports of financial information. We produce many Balances of the companies, but at the end of our life, we discover that through pursuing the Triple Bottom Line, we may reach the Triple Upper Line of our Spirit, of our Soul and of our Consciousness. This is a wonderful return for a life committed to sharing Company Benefits with our fellow members of society. This Triple Upper Line, it is a path linking our ground commitment to mankind with our universal vision of the Common Good. Should be called for simplicity a Path to a Responsible Consciousness, wherever we may end, that was built as citizens of the world, step by step. A path to wisdom, not given by any church or organization, but discovered and gained by ourselves.
I must highlight that Businessmen sharing their abundance with mankind, clearly have a spiritual path open in front of them, because generosity, solidarity and kindness are the same essence of being a human being and being a member of Mankind.
Teofilo
businessinchile@gmail.com
www.socium.cl
Santiago, Chile, March 21, 2014
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