Company Vision

One of the toughest issues facing us globally is the unequal distribution of wealth. The industrialised world generates huge corporate profits but channels them into the hands of the very few. This is almost always at the expense of the larger population.[1] A recent article by Bloomberg highlights that the world’s 85 richest individuals are worth as much as the 3,500,000,000 poorest.[2] We see a select few sitting on billions while many are unable to access basic medical care, adequate nutrition, education, or even fresh water. Even in a comparatively wealthy country like the UK, a significant proportion of the population live in relative poverty.[3]

We believe that successful businesses should show greater social responsibility by voluntarily giving up some of their profits. The additional funds given to international aid charities, such as Oxfam, British Red Cross and Save the Children could improve the lives of millions. Medical research charities like Cancer Research, The British Heart Foundation and Diabetes UK would be able to fund invaluable research, accelerating their progress in finding cures and treatments for life threatening diseases. The future of disadvantaged children will be more certain with the extra resources available to charities such as Children in Need, Comic Relief, NSPCC, UNICEF and Barnardo’s. 

Philanthropy is a growing movement, but it is primarily practiced by individuals.[4] Corporate contributions are typically minuscule when compared to their profitability, suggesting a mere PR exercise, rather than a desire to make a real difference. Total charitable donations by US corporations in 2013 were $16.75 billion, while total US corporate profits in same year were $1,680 billion, so on average, US businesses gave a little under 1% of their profits to charity.[5] If all US businesses had followed our lead and given 10% of their profits, the total contribution to charities and good causes would have been $168,000,000,000 in the USA alone. Not only would these additional funds have helped millions of people to improve their living standards, much of it would have been spent relatively quickly, stimulating demand and economic growth.[6] The contributions made by UK businesses are shamefully much lower than the US contributions. In 2013 the top 418 UK corporate contributors gave on average only 0.4% of their pre-tax profits to good causes.[7] 

Piranha Trading Limited and it's brands take pride in trading ethically and responsibly. We pay full UK taxation on all of our business activities. We will not hold off-shore accounts to avoid tax or adopt other dubious business practices such as zero hour’s contracts for our employees. To truly be motivated we believe that all employees should have a significant interest in the success of a business so our direct employees own shares and all have a profit share incentive. They also get to support their charities of choice. 

By preferring to buy from businesses that trade in this ethically and socially responsible way, you won’t have to spend a penny extra on your goods and services.[8] So now it’s up to you! If you show your support by buying from businesses that operate this way, you will give them a competitive advantage. You will make them more profitable and thereby ensuring that larger contributions are made to your chosen good causes. Even if you have no immediate need of the goods sold by these businesses, please show your support for them by spreading the word on the social media networks.[9]

While we recognise that this model cannot provide a solution to all of the world’s ills, we are certain that if more profitable business contributed significantly[10] to good causes, this would help to redress the massive financial inequalities we see today. Our bold ambition is to change the way the world does business.

 

 
[1] Corporate Profits Grow and Wages Slide http://www.nytimes.com/2014/04/05/business/economy/corporate-profits-grow-ever-larger-as-slice-of-economy-as-wages-slide.html and also Corporate Profits Grew Five Times Faster than Wages in 2013 http://www.businessweek.com/articles/2014-01-24/goldman-2013-corporate-profits-grew-five-times-faster-than-wages 

[2] See http://www.businessweek.com/articles/2014-01-20/the-worlds-85-richest-now-worth-as-much-as-3-dot-5-billion-poorest 

[3] See Oxfam article: http://policy-practice.oxfam.org.uk/our-work/poverty-in-the-uk 

[4] In 2013 the American public gave $240.6 billion, with only $16.75 billion coming from US corporations. That’s over $14 donated by individuals for every $1 donated by businesses in the USA. Source: Giving USA 2014, the annual report on philanthropy. http://www.givingusareports.org/ 

[5] See footnote 4 and http://thinkprogress.org/economy/2014/03/27/3420092/corporate-profits-record-2013/ 

[6] This video explains the multiplier effect in non-economists terms: http://education-portal.com/academy/lesson/the-multiplier-effect-and-the-simple-spending-multiplier-definition-and-examples.html#lesson. 

[7] See: http://www.civilsociety.co.uk/fundraising/news/content/15565/dsc_truly_horrified_by_levels_of_corporate_giving 

[8] This model has no affect on day to day operational costs, and therefore it has no direct affect on selling prices. The contributions are made at the end of the financial year from any available profits made. The only real financial impact on the business would be the amount of profit it has available to plough back for growth. This end of year voluntary tax will be offset by two key factors: 1) where a consumer is faced with a decision to buy the same product or service at the same price from one of two businesses and one of the businesses gives a percentage of profits to good causes and the other doesn’t, the rational consumer will choose to buy from the contributing business. This will give them a competitive advantage, increased market share and if well managed, higher profitability; 2) Investors in businesses that follow this model will generally have lower dividend expectations than traditional investors that are seeking to maximise their returns. They will be willing to sacrifice some personal gain to offset the contributions made to good causes by the business. While the most philanthropic investor may be happy to accept very low dividends while holding shares in a 10% to good causes business, far more investors will be willing to invest in a 10% to good causes business as they will receive higher dividends than the 10% to good causes shareholders. In other words, there will be a trade-off between the percentage given to good causes and the amount of dividends that are paid out to shareholders. For example, where a business gives 15% of profits to good causes, some of that 15% will be taken away from the funds made available for paying dividends to shareholders so that business won’t lose the full 15%. At worst, the slightly lower levels of available profit to plough back into the business will mean the business’s organic growth will be a little slower. This is not a major setback when you consider the competitive advantage outlined above. 

[9] By liking or following businesses you will help to improve their natural search ranking on internet search engines, making it easier for potential buyers who are looking for their types of goods to find them. 

[10] If you are a business reading this and feel that 10% is too much to give up, please don’t discard the idea. Why not start with 5% or perhaps 2%. Even 2% can still really make a difference.