Pledge 1% got start-ups to give $3 billion. Can it win over AI companies?

The software company Okta has been giving to charity since shortly after its 2017 initial public offering. A chart on its website shows a steady upward progression at the Okta for Good Fund, with grant making growing from $3.8 million in fiscal 2022 to $8.4 million in 2026.

But how? The company, which makes login and security software, wasn’t profitable until 2024. Where were the funds for philanthropy coming from?

The answer comes from a movement, called Pledge 1%, to get start-up companies and entrepreneurs to focus on philanthropy and supporting the nonprofit sector. The effort, started in 2014 by a high-profile group of tech CEOs that included Salesforce’s Marc Benioff and Atlassian’s Scott Farquhar, offers a broad and flexible framework for companies that want to sign up. They can pledge 1 percent of equity, 1 percent of employees’ time for volunteerism, 1 percent of their product, or 1 percent of profits — or some combination of the four.

Over the past 12 years, Pledge 1%’s biggest achievement by far has been in the first bucket — persuading start-up companies like Okta to set aside equity (a small slice of ownership shares) for philanthropy. Today, the value of shares set aside by Pledge 1% members is estimated to top $3 billion. But as the nonprofit world waits to see if the latest generation of AI-focused tech companies carries through on collective philanthropic potential that some say could go as high as $100 billion per year, Pledge 1% is still trying to connect with those corporate leaders and identify its role.

Okta reserved 300,000 shares for philanthropy before its public offering in 2017. Those shares were steadily sold — and donated to philanthropy — for years before the company earned a profit. Once it became profitable in 2024, Okta expanded its commitment, pledging $50 million over five years for cybersecurity at nonprofits, job training, and climate-resilience projects.

“It’s a little bit like that initial pledge gave us the starter pack for what we were trying to do with our philanthropy,” says Erin Baudo Felter, who leads Okta for Good.

When Pledge 1% was conceived in 2014, its founders hoped to have 500 companies sign on within the year. Since then, that number has surpassed 20,000. But growth in numbers can be deceptive. Many of the newly enrolled companies were very small, says Farquhar, who serves as Pledge 1%’s board chair. They may have been eager to signal their good intentions, but many weren’t yet in a position to give a meaningful amount to charity.

By 2020, Pledge 1% had raised about $250 million in equity pledges for philanthropy. That’s the year it deepened its commitment to working with companies on the verge of a public offering, setting the stage for the growth in shares for philanthropy worth billions today. Tech companies that have signed on to the movement include Airbnb, Chime, Dropbox, Reddit, and Twilio.

“When we first started, having a boardroom conversation where you say, ‘Hey, we’re about to go public, and we’re going to give 1 percent of billions of dollars away to not-for-profits and make the world a better place’ wouldn’t be a conversation that anyone would enter into,” says Farquhar. “But over the past decade, we’ve changed what is normal — and what it means to be a good corporate citizen.”

Even so, Pledge 1% is at a crossroads. Despite impressive growth, it has no rigorous method for measuring its impact. Some of its members have worried they’ll have to scale back some forms of grant making, as corporate giving becomes politically perilous under the Trump administration. And it’s still trying to figure out how best to connect to AI companies.

Pledge 1%

The organization hopes its new CEO, Josh Jarrett, who has experience building an AI business at the publisher Wiley, will help.

“Pledge 1% has the track record, the history, and the unique presence as a neutral nonprofit,” says Jarrett, who started in the role this month. “That signals that we’re going to be able to be part of a really important conversation that’s going to play out over the next couple years.” 

A playbook for founders 

Pledge 1% became an independent nonprofit in 2025 after a decade as a fiscally sponsored program under the Tides Foundation. Today, it has 23 employees and an annual budget of roughly $10 million. Companies from more than 130 countries have joined Pledge 1%. 

Farquhar is among the effort’s biggest donors, and some of its most engaged companies, which participate in a program called Builders, also contribute financial support.

Okta’s experience illustrates how the Pledge 1% movement can pay off for the nonprofit sector. Its shares pledged for philanthropy are transferred to a donor-advised fund housed at the Tides Foundation. In turn, those equity shares — and now a small percentage of company profits — fuel grant making.

One beneficiary is the Center for Long-Term Cybersecurity at the University of California at Berkeley. Okta started with a $25,000 grant to the center a few years ago and has increased its support. The company’s latest grant — $500,000 over three years — supports the growth of a consortium of more than 70 cybersecurity clinics at universities around the world that help nonprofits and small businesses.

Ann Cleaveland, the center’s executive director, says Okta’s substantial financial commitment and clear focus on cybersecurity helped the center identify early on that it was worth going through the trouble of pursuing a grant.

“That kind of communication is so valuable in a world where some companies make pledges, but you don’t know what the time frame is,” Cleaveland says.

Recognizing the need to focus on fast-growing companies that might set aside shares for philanthropy, Pledge 1% hired Jan D’Alessandro in 2020. A former corporate lawyer, she had helped arrange financing for tech start-ups, and at one point led the AOL Foundation.

With D’Alessandro’s guidance, Pledge 1% built a network of 100 venture capitalists — an initiative it calls Boardroom Allies — who committed to supporting entrepreneurs hoping to set aside equity to fund social impact. D’Alessandro also helped develop financial frameworks through which start-ups could set aside shares for philanthropy. 

The most popular model takes a tempered approach: reserve the shares before a public offering and pay them out over 10 years so that the dilution to other investors in any one year isn’t too noticeable. Setting aside shares for philanthropy wasn’t a new idea — eBay, Google, and Salesforce had all done that before their public offerings. But Pledge 1% helped systematize the process, offering free guidance to philanthropically inclined companies.  

“It is by far the most impactful way to fund this work,” D’Alessandro says. “If you think about it, if a company has a down year and they’re funding their social impact work as a line item in their operating budget, that’s often the first thing to get cut.”

Today, young companies looking to become philanthropic don’t just sign on with Pledge 1%; they turn to it for help.

Elisabeth Carpenter is the second longest serving executive at Circle, best known as the company behind the stablecoin USDC. As Circle prepared for an initial public offering of stock in spring 2025, Carpenter envisioned a corporate foundation that would someday be worth $100 million. 

Viscera Studios

Pledge 1%’s playbook — setting aside equity and paying it out over 10 years  — made perfect sense to her.

“What a shareholder in anything doesn’t want is surprises,” says Carpenter, now the company’s chief strategic engagement officer.

Pledge 1% taught her how to approach the company’s board with the idea, and what to include in public filings. It also connected her to other companies that had already taken the pledge.

This month, the Circle Foundation made one of its first grants to Pacific Community Ventures, a community development finance institution that focuses on California. It will use part of the grant to couple AI with its inclusive lending philosophy and try to get more loans approved for small businesses in low-income communities.

“All the stars aligned as I learned more about Pledge 1%,” Carpenter says. 

Inspiration, not accountability 

How much impact is Pledge 1% really having? That’s hard to say. Unlike other efforts to inspire corporate giving — notably, 1% for the Planet — Pledge 1% has no hard numbers documenting impact. It doesn’t conduct audits or ask for company reports.

Photography courtesy of Nasdaq, Inc.

“Our goal is to inspire, educate ,and empower rather than certify or regulate,” Pledge 1% says on its website.

The $3 billion that Pledge 1% says has been set aside for philanthropy is just an estimate, Farquhar admits.

“It’s a reasonable vanity number,” Farquhar says. “It’s in the ballpark  — it could be twice that. It could be half.”

Even within that wide range, he says it’s clear that Pledge 1% is making a difference. A few years ago, Farquhar recalls, the movement calculated that every dollar put into Pledge 1% had resulted in more than $100 in corporate pledges.

If Pledge 1%’s approach — focusing on inspiration rather than tracking impact  —sounds familiar, that’s because it resembles the better-known Giving Pledge. That effort, to get the world’s richest people to give half their money to charity, takes a similar hands-off approach. 

Some experts are skeptical it works.

“There’s the same amount of accountability here as there is with the Giving Pledge, which is to say, not much,”  says Laura MacDonald, founder of the fundraising consultancy Benefactor Group.

Tracking isn’t impossible. 1% for the Planet certifies companies that give 1 percent of revenue or more to environmental nonprofits. More than $900 million has been donated since its 2002 founding, and the effort expects to surpass $1 billion early next year. When companies fail to provide adequate documentation for their donations, they get booted out of the program.

“Certification is the foundation of 1% for the Planet,” says Elizabeth Limbach, a spokesperson for the membership organization. 

Pledge 1% is slowly moving toward more documentation. Some members of its Builders cohort — an invite-only group of around 50 of its most engaged companies — are voluntarily sharing data that will be used for collective metrics and insights. And Jarrett, Pledge 1%’s new CEO, says he thinks that AI can eventually give the movement “specificity and depth around impact.” 

Headwinds for corporate giving 

Relative to all philanthropic giving, the efforts at both Pledge 1% and 1% for the Planet –— and arguably, giving by corporations writ large –— is small. Companies gave $43.7 billion to charity last year, just 7 percent of the $617 billion total.

Chief Executives for Corporate Purpose, a nonprofit that encourages social responsibility at corporations, would like to see companies give at least 1 percent of their pre-tax profits — either in cash or through product donations.

Many companies lag behind that goal. The median contribution in 2025 was just 0.78 percent, says Kate Stobbe, CECP’s director of corporate insights and research. Tech companies contributed a median of 0.52 percent of pre-tax profit.

Meanwhile, a new tax law approved last year by Congress could reduce giving by companies. It sets a floor on corporate giving — meaning companies get no tax benefit from the first 1 percent of profits they give to charity. If companies give less to maintain their same after-tax cost, that could lead to a $4.6 billion drop in 2026, according to an estimate by MacDonald.

Another challenge for Pledge 1% is the wariness among companies that their corporate-giving programs could land them on the wrong side of the Trump administration. Trump has attacked the nonprofit sector from multiple angles –—including cutting federal funding, gutting climate action, and trying to stamp out diversity and inclusion programs. Some of the biggest companies in the world have quietly fallen in line.

Pledge 1% doesn’t take political stances, but it provided space for social-impact leaders from its Builders group to meet in person twice during 2025 and discuss how they could adapt their strategies and continue supporting nonprofit partners.

“When people went into the convening, they were pretty down and wondering, ‘What’s the point of my job?’” says Min Yoo, a Pledge 1% spokesperson who led one of the sessions. “But after having conversations and seeing how everybody is facing the same things, people came out of it feeling a lot better.”

Yet another challenge awaiting Jarrett: Outside of the tech world, Pledge 1% still has little name recognition. But some fundraising consultants say that provides an edge for charities that are in the know.

“If you ask fundraisers what the Giving Pledge is, at least 90 to 95 percent of them would have some familiarity with it,” says Melissa Bank Stepno, CEO of the Helen Brown Group, a prospect-development consulting firm. “But if you asked, ‘What about Pledge 1%?’ maybe it’s in the 40s.”

In a blog post, Stepno encouraged fundraisers to scan the Pledge 1% site for new companies, then dig deeper on company websites and even Securities and Exchange Commission filings for more detail on their giving programs.

“It really is an untapped market,” she says.

Courting AI

The most pressing challenge for Pledge 1% may also be its biggest opportunity –—figuring out how to connect with the AI companies that dominate today’s start-up landscape. Although the biggest AI companies have indicated plenty of interest in philanthropy, none have joined Pledge 1%. Meanwhile, plenty of smaller companies connected to the growth of AI will have public offerings in the next few years, providing Pledge 1% with a shot at securing more pre-IPO shares for charity. This year, 7 percent of the new pledges identify as AI companies. 

“The opportunity for us is, what’s the standard going forward for AI companies?” Farquhar says. “And not just the hyperscalers but also the data centers and others.”

Pledge 1% is in talks with AI companies big and small, Jarrett says, and his connections from focusing on AI at Wiley will help.

“Pledge 1% is really well positioned to help catalyze some of this conversation,” he says, “and figure out the new tools and services and approaches that people need for corporate impact in this AI era.”

Reporting for this article was underwritten by a Lilly Endowment grant to enhance public understanding of philanthropy. The Chronicle is solely responsible for the content. See more about the Chronicle, the grant, how our foundation-supported journalism works, and our gift-acceptance policy.