Michael Pirron is the cofounder and CEO of Impact Makers. His company is a management consulting firm much like any other, but for one extreme distinguishing feature: It donates 100% of its after-tax profits to charity. We caught up with Pirron to ask him why he would do such a thing.
FAST COMPANY: What led you to cofound Impact Makers?
MICHAEL PIRRON: I worked in management consulting for years, and it paid the bills, but it wasn’t resonating with my values. But I couldn’t really afford to take a third or half of my salary to go work in the non-profit world. I wanted to pay my mortgage and do something meaningful at the same time. So I came up with this idea, selfishly, to be able to pay my mortgage and give back.
What’s the scope of Impact Makers?
We’re headed towards $5 million in revenues. Last year we put $100,000 into the community, and a little over 200 hours of pro bono consulting. Our goal for next year is to do $8 million in revenues, and put half a million dollars into the community. That would be a real game-changer in the philanthropy space in central Virginia: a group of middle-class professionals, doing the same work they would do at any other firm but structuring it differently and collectively making the same community impact as some of the large family foundations in town.
You and your colleagues still draw healthy salaries. How are "profits" defined? How is this all governed?
We have no shareholders and are governed by a volunteer Board of Directors that has fiduciary responsibility to ensure we are maximizing profits. They approve major capital expenditures, set executive compensation, and also review all compensation to ensure it is market-aligned. All employees, including executives, made under $200,000 last year even with performance bonuses. They ensure we are not bonusing out all profits to employees, not taking extravagant trips or other unnecessary expenses to "expense" out those profits. The Board can decide to retain some of the profits year-to-year for future growth, but the Board has to approve this, otherwise all profits from the year go to our charitable partners.
You’re a B Corp, like Warby Parker. It’s a stringent certification of ethical business.
We’re actually the most unique B Corp, since we’re the only certified B Corp that has no shareholders whatsoever. We’re going from the shareholder capitalism of the last century to stakeholder capitalism, focused on maximizing profits and being good stewards of the community and the environment.
Do you ever feel like Robin Hood?
He’s stealing from the rich and giving to the poor. We’re not stealing from our corporate clients to support the community. It’s a better model than Robin Hood’s model. We’re adding value for our corporate clients the same way as all other firms out there, but we’re double leveraging that value by turning it into community impact.
Is your business model a selling point when you pitch potential clients?
We’ve never sold on, “We’re a company that gives away its profits.” We’ve always sold on capabilities and price. I would say our model has been a tie-breaker on competitive bids. Our model and story gets us in the door to talk to CEOs, since it ties in with their corporate social responsibility goals.
When you tell people about your model, how do they react?
A normal reaction when I tell people in the business community what our model is, is, “You’re nuts! Why would you do that?” But I’m making more money now than in any other position in my career, and I’m passionate about what I’m doing. I’m living my values, and that’s more meaningful. My kids see me making an income through living my values.
This interview has been condensed and edited.
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[Image: Flickr user Seema Krishnakumar]