By David Swan. Originally published in The Australian.

Atlassian co-founder and chief executive Scott Farquhar has ­revealed plans to enable all start-ups to give away 1 per cent of their company to charity and is ­approaching Tony Abbott’s working group on business partnerships for support.

Mr Farquhar said that while many start-ups were keen to donate 1 per cent of their equity, they put it off because the equity was worth little as no tax breaks were available and the philanthropy therefore never eventuated.

His idea would enable staff to donate shares into a trust structure, in a system not unlike superannuation, in which staff would donate shares from day one and then receive a tax deduction once those shares were distributed.

Mr Farquhar, whose software firm Atlassian is valued at $US3.3 billion ($4bn), described the move as a “world first for ­corporate philanthropy.”

“The government I know is looking at ways of increasing ­philanthropy; the Prime Minister’s Community Business Partnerships working group is looking for ideas and I’ll be chatting with them and with Philanthropy Australia,” he told The Australian. “At the moment you don’t donate shares that are worth nothing, because you get no tax deduction, but with this scheme we’d get people like the Macquarie Bank and all sorts of start-ups interested.” Mr Farquhar pointed to recent changes in Employee Share Scheme arrangements as being a sign the government was now taking start-ups seriously.

The changes to Employee Share Schemes announced late last year mean workers will no longer have to pay tax when they receive stock options but only when they’re sold, provided the shares are held for at least three years.

“With these changes everyone will now be handing out stock to staff, and now would be a great time to hand out stock to charities at the same time or put it in a trust,” he said.

Atlassian has a ‘Pledge 1 per cent’ program, which sees it divert 1 per cent of equity, 1 per cent of product, 1 per cent of profit and 1 per cent of employee time to charitable causes.

Mr Farquhar said Pledge 1 per cent had already helped more than 250,000 children in the developing world get access to education through a partnership with the Room to Read foundation, while Atlassian staff also get paid leave days to volunteer. He said most early-stage start-ups didn’t take time to think about philanthropy or what they want their corporate values to be.

“In the first year you need to decide what kind of company you want to be and that comes down to culture and what you want to be known for,” he said.

He said that since initiating the program Atlassian had seen significant benefits internally, with a high number of new recruits listing corporate philanthropy as an important attribute in a technology firm. “People say it’s a big reason they join us,” he said. “Australia has generally donated less than the US across almost every metric and I’d love to see the next generations of Australians coming through having a better rating in corporate philanthropy levels.”

Atlassian’s Pledge 1 per cent program is based largely on a similar initiative from US tech giant Salesforce which pioneered the “1-1-1” philanthropic model.

Salesforce Foundation president Suzanne DiBianca told The Australian later-stage companies had a responsibility to integrate some form of philanthropy no matter how late they were. “It’s not just about start-ups it’s about the later-stage companies too, a couple have missed and they’ve been big misses,” she said.

“Facebook was a big miss for example in their IPO process. I’ve got the list of 20 that are going to likely IPO next year, and we’re highly focused on them. Docusign, Pinterest, for example. Google didn’t do it until pretty later stage. It’s really never too late.”

Mr Farquhar said that while 1 per cent sounded small, in reality it was a meaningful contribution.

“When you aggregate it up it’s a very large amount,” he said. “If you add it up across all start-ups, that’s not small, but you can still give it away without even thinking about it. If you made it 10 per cent, that’s a very different conversation, and across the world you’d have a ­different adoption rate.”