Fast Lane: Would you give away 1% of your business to charity?

Atlassian co-founders Scott Farquhar and Mike Cannon-Brookes made a decision a long time ago which now has huge ramifications.

The pair decided to set aside 1% of the equity in their fledgling business for a charitable foundation. 

It didn’t seem much at the time, but on the latest valuation of Atlassian, that decision means the foundation is now worth $35 million.

Farquhar and Cannon-Brookes’ decision is more noteworthy as Australian entrepreneurs are not known for giving away their wealth in comparison to America where philanthropy is more ingrained in the business community.

According to the latest figures available from the Australian Tax Office, about 38% of taxpayers – 4.79 million – gave an average of $461 each to charity in the last year.

But it is at the wealthiest people who are not giving as much, in Australia more than 30% of those who earn more than $1 million don’t claim a charitable tax donation whereas America’s millionaires give away, on average, 15% of their wealth.

The lead set by Atlassian in pledging a charitable donation at an early stage makes sense on a number of levels.

It sets up a culture of giving at an early stage and makes it clear that for Atlassian giving back to the community is as much a part of its makeup as making a profit.

Clients, employees and the community expect businesses to take their community responsibilities seriously.

Farquhar told me he wants other entrepreneurs to get on board and pledge 1% of the equity in their company to charity.   

Would you take his 1% challenge?