Social Entrepreneurship · Social networking

Where are YOU creating Social Impact?

Frankie Picasso Social Impact Champion, Founder & Radio Host, The Good Radio Network

February 20th, 2016

I am interested to know if there are any B corporations in here.Social entrepreneurship has become trendy. Where does your organization meet in the  social impact space? Would you like to?

Shel com I help organizations thrive by building social transformation into your products, your services, and your marketing

February 21st, 2016

I'd thought until recently that B Corp was only open to chartered corporations--so as a sole proprietor, I never tried to go near the process. I chose to get validation in other ways. For instance, my green and transformational business consultancy was the first business ever to be certified at the Gold level by Green America (and that was a fair bit of work on my part).

However, I found out recently that B Labs allows any company to take a scaled down version of its assessment, without charge. I went through the process and was pleased that out of 22 categories relevant to me as a solopreneur with no employees, I scored Above Average on 15. (Hint: if you are also a solopreneur with no employees, make sure to select Zero for the number of employees. If you count yourself and select one employee, you'll be faced with a barrage of questions designed for companies that have a staff.)

Stephen G. Barr

February 20th, 2016

Sure Frankie the following paragraph is the major reason none of my startups have opted to do so since they are generally seeking venture capital:

"Benefit corporations may face difficulty in raising investor capital. Most laws require benefit corporations to be partially charitable, with shareholder valueonly being one of the many priorities of the company. This in turn disincentivizes venture capitalists from investing. As such, most benefit corporations start with an alternative legal structure, and register as a benefit corporation once their financial situation is more certain. To mitigate this detriment for startups, some states have allowed companies to incorporate as flexible purpose corporations."

Michael Barnathan

February 20th, 2016

Although we considered a B corp structure for Mountaintop, we didn't see any benefit to organizing this way that were sufficient to offset the additional constraints and fundraising challenges it imposed. You still can't go after the funding streams a 501(c)(3) would pursue, and you're shut out from many of the ones a traditional for-profit would seek - seems like the sort of thing where you should just pick one or the other instead of being halfway in each camp.

Jim Bowes Promoting and producing sustainable natural-media techniques

February 21st, 2016

Dear Frankie,
For the sake of this post, I am going to refer to being B Corp certified not being a B Corporation which is different as it is the legal structure of the company.
It takes a special person or company leader to certify their company as a B Corp. These people are able to see beyond the traditional business model which for the most part is all about the money. They look at their businesses as a tool to help make things better for not only the environment but also the people inside and outside of the company. Shareholders and stakeholders. In short, they are a very forward thinking and special breed. 
What I don't see in the other posts is much discussion about how B Corp companies define success in ways other than the single bottom line. B Corps generate value for their shareholder and stakeholders in many ways and thanks to the ability to measure these, B Corp companies can act differently. 
It also takes a special investor to see beyond the current model of money in money out. There are more reasons for an investor to invest other than financial return on investment. Perhaps one of the reason investors are investing in B Corps is to reduce risk. The chances of a B Corp doing something stupid, using "creative accounting", having their products manufactured in alarming ways with questionable labour, having labour disputes on and on is far lower than a traditional  company whose sole goal is to maximise their profits often at all costs.
There is over a trillion dollars of impact funds that are waiting to find companies to invest in. The problem at this point is there is far more money then there are "suitable" companies to invest in. This is mostly because to date, social companies have not had a standard or a way to measure their impact leaving too much open to interpretation of both the entrepreneurs who may well over state their impact and the investors who have no way to make a real comparison. In my opinion being a B Corp actually increases your chances of getting investment though those channels may not be the standard go to VC funds.
B Corp companies measure their success in many ways. For instance, looking at how much money they saved by being a B Corp, how much marketing value they got from their actions, the cost of attracting and retaining top talent. Young talent are looking for companies who they want to work for as part of their purpose in life not just the money and goodies they will earn. While the fortune 500 companies have to work hard to attract the best and the brightest, B Corp companies are saddened that they have to turn some incredible talent away at the doors. 
B Corp is not for everyone and that is a good thing. It is best suited for sustainably minded businesses who are already dedicated to a new way of doing business but may not be able leverage their actions by being able to prove to an often cynical audience how they are different than their competitors who are not dedicated to a new way.
Though B Corp is for companies of all sizes, as an entrepreneur, I see great value for start-up and young entrepreneurs. Most innovative people and entrepreneurs are not experienced business people actually usually the opposite. By following the assessment, young business can learn how to set up solid foundations that they can build their businesses upon from day one. There is a vast amount of information, tools and resources available in one place that young companies can use that will ensure their companies are not only following an idea but are actually documenting it as a practice, providing consistency and clarity. It helps companies prioritise which processes to document first. It also helps them insure that the original vision and mission of their company remains in tact and not in motion constantly changing due to the ever changing business environment, investors or new partners who may join the company with their own visions. 
There are costs involved. However, if you look at the savings and value in other areas that are gained it is a pretty solid investment in your business. 
B Corp is best for people/companies who can see value in their company in more ways than reading their financials. Anyone who is basing their decision to become a B Corp on the costs involved would be best advised to give the movement a few years to provide the reduction in risk these people will need to jump on board. Those who believe that they will become less attractive to investors may want to think about that long and hard. Do they want an investor who is going to want to see them maximising profits at all costs or do they want an investor who is going to work with them to increase the value of their company in ways that are not measured by the almighty dollar. I often think entrepreneurs think VC are like angel investors. They are not. Most are out to make as much money as quickly as possible and put tremendous pressure on the founders to generate profits quickly. If your focus is mostly on earning, it will leave you little time to work on the fundamentals. You will find yourself frantically working in your business to meet financial goals instead or working on your business to reach your company goals. You may even find that you have to operate in a way you don't like just to keep the investors off your back. Not the kind of key partner I would want in my company. Perfect for many traditional businesses. It has worked for decades. 
B Corp is not your usual business model but then again B Corp companies are not your usual companies. This is what makes them special, poises them for long term success and gives them the upper hand when it comes to providing products and services to the fast growing number of consumers who do care about how those behind what they buy act.
It's easy to remain cynical about business. I think if you look around, consumers are highly critical of the way business is being done. We are fed up with what appears to be sheer greed that benefits a very few key people at the expense to everyone else. A certified B Corp by its very nature is above the old ways of doing business. The certification relieves companies of having to defend their actions and finally their is a way to measure the impact of social companies in a way that allows them to be compared with other companies. Apples to apples not apples to oranges and this is why I think B Corp will continue to grow and those who have made the investment in themselves continue to reap the many rewards including financial success. 
It's only for the brave and devoted at this point. As times goes on like any new innovation, it will be adopted by more and more companies. Now it is the early adopters who often make decisions from the hearts and their heads and enjoy taking risks as well as reaping the rewards of being first. New innovations are not for everyone and B Corps is an innovative new business model. It will take time for it to be adopted just as any innovation is. The iPhone and most innovations go through exactly the same process of adoption. It's not for everyone at this point. It will prove its worth and therefore reduce the risks associated with using it as time goes by. 
That's my humble opinion not based on any kind of authority on the subject just a lot of research into B Corp as someone whose business would have thrived had it become a B Corp instead of it going bankrupt because it was nearly impossible to differentiate ourselves from the low cost competition who were able to copy our sustainable techniques without having to invest in what it takes to be sustainable businesses yet still be seen by companies as sustainable which in fact they were not. Standards that allow proper comparison are very important for those taking the extra steps needed to change the way business profits our society as a whole not just a few. 

Michael Barnathan

February 21st, 2016

You should edit the post; the body doesn't match the title and people are latching onto the B corp piece in the ambiguity.

I have to remind people seeking social impact that the social impact of a failure is very close to zero (not precisely zero, but not that far above). So first and foremost, you owe it to yourself and the people you'd like to serve to give your venture the best chance possible. Yes, failure is a learning opportunity, etc, etc, but you're in this to create change, not just learn :). Whatever structure is going to get in your way least as you build your organization, that's what you should adopt. You can always change it later if you want to emphasize something else and feel that the structure is getting in the way of the organization expressing its values or similar, but entrepreneurship is hard enough without imposing any additional handicaps during the early stages.

Ajax Greene Providing expertise to emerging social entreprenuers

February 21st, 2016

As a founding B Corp and NYS benefit corporation the 30+ year trend is way past being a fad. Post COP21 in Paris, the vast majority of major global corporations saw the writing on the wall when 195 leaders of the planets countries agreed that global warming is real and collectively agreed to begin to move beyond fossil fuels.
Consumers are on board with between 40-50% of consumers are shopping their values over price. They demand more more companies than simple a healthy bottom line. Traditional capitalism is failing us on many levels. Fortunately there are many good solutions being brouht forward and in my mind being a B Corp puts companies in a leadership role in the New Economy.

Melissa Skehan Passionate, Mission Driven, Strategy, Growth & Impact Leader - Founder, CEO, President, Executive Management

February 22nd, 2016

There seems to be some confusion in this trail regarding the difference between becoming B Certified (going though a rigorous certification process sponsored by the non profit B Lab) and becoming a certified Benefit Corporation which involves registering an additional legal corp structure with your state (if the state supports it.) (Note that registration as a Benefit Corporation is complementary to registering as a C Corp, S Corp or LLC - not instead of).  There is a very strong community of certified B Corps throughout the country (and especially here in the Bay Area).  Many of these organizations are also registered as Benefit Corporations, though many choose only the certification. My company chose certification, but did not register as a Benefit Corporation. I have not heard complaints that either path has been a barrier to raising funds, but perhaps these organizations are more clear than others about where their ideal funding will come from and they target sources that appreciate these certifications/structures.  I agree with the moderator, there have been numerous conversations posted on FD around the BCorp movement.  Its is definitely one that is gaining momentum and some would argue brings benefits to organizations that choose to go down one or both of these paths.   Like many decisions in startups/small business/big business - the answer is: "it depends."  I will share that I have never met a group of more likeminded business owners than I did amongst my Bay Area peers involved in the BCorp (certification) community and for that alone, I am grateful. 

Stephen G. Barr

February 20th, 2016

Good question Frankie. I have been encouraging startups I advise to register as B corps but none have yet. I don't see many doing so and will be interested in following this thread.

http://benefitcorp.net/

Frankie Picasso Social Impact Champion, Founder & Radio Host, The Good Radio Network

February 20th, 2016

Thank you Stephen! Perhaps you could share your reasoning for the advice to register as a B Corp.

Frankie Picasso Social Impact Champion, Founder & Radio Host, The Good Radio Network

February 20th, 2016

Thank you. While the paragraph states that Benefit Corps "MAY" face difficulty raising capital,  is that truly the case?  I think there are socially conscious investors who love the idea of helping a Toms Shoes, or Change.org or Care2 .
I know that Ben Rattray went to Kickstarter and did brilliantly!