Four Ways to Profit, for Good
Columbus Startup Week 2016 was a wonderful opportunity for both startups and aspiring entrepreneurs to connect and learn tips of the trade essential for sustaining a successful for-profit business. The panel discussion “Benefit Corporations—Becoming an Official Social Enterprise,” focused on the four ways a for-profit entity can express its social orientation. In this quick reference guide, we’ve outlined the paths described by panel moderator Allen Proctor, president and CEO of the Center for Social Enterprise Development (CSED).
A Benefit Corporation is a formal legal structure mandated to operate for the public benefit. This includes increased transparency and accountability, providing beneficial products or services, and promoting economic opportunities beyond job creation, health and environmental preservation and arts/sciences. Each year, Benefit Corporations issue an annual report of successes and failures and undergo an assessment by a third party. A Benefit Corporation can also be a social enterprise.
A Certified B Corporation is a voluntary certification through the nonprofit B Lab. To become a Certified B Corporation, a business must go through B Lab’s rigorous assessment process and score 80 points out of 200. Businesses must undergo periodic recertification as well. A B Corp also must incorporate triple bottom line accounting principles into their business model, meaning the organization must prove that their business practices and processes result in positive social, environmental and financial impact.
A Social Enterprise has a measurable social impact and can be structured as a nonprofit or for-profit. It may take a number of legal forms, including but not limited to: cooperative, benefit corporation, low-profit limited liability company (L3C), LLC, or a subsidiary of an existing organization. Many nonprofits choose social enterprise as a means to elevate their mission and bridge the gap in funding from philanthropy, or to increase unrestricted funding.
Conscious Capitalism chapters act as forums to meet other socially minded businesses. Conscious Capitalism, Inc. is a nonprofit organization dedicated to cultivating the theory and practice of Conscious Capitalism through events, presentations, publications and social media. There is an emerging network of local Conscious Capitalism chapters, which serve as communities of inquiry for business leaders, entrepreneurs, coaches and consultants and others.
Still hung up on the differences? Check out Profit + Purpose: Structuring Social Enterprise for Impact, a presentation on LinkedIn, for more information.