It has been a little over three years since Vermont became the first state in the country to recognize the low-profit limited liability company (L3C) as an official legal structure on April 30, 2008. Since then, other legal forms such as the Benefit Corporation and the Flexible Purpose Corporation...
SOCIAL ENTERPRISE
Social enterprises are businesses whose primary purpose is the common good. They use the methods and disciplines of business and the power of the marketplace to advance their social, environmental and human justice agendas. … In its early days, the social enterprise movement was identified mainly with nonprofits that used business models and earned income strategies to pursue their mission. Today, it also encompasses for-profits whose driving purpose is social. Mission is primary and fundamental; organizational form is a strategic question of what will best advance the social mission. – Social Enterprise Alliance
Entrepreneurs with social goals must consider many factors in determining the appropriate structure – whether it involves a nonprofit organization, a for-profit entity (including the so-called hybrid entities—B corporations, benefit corporations, flexible purpose corporations, and L3Cs), or both. Understanding the different forms and utilizing the appropriate ones may be critical in the implementation of the social/business plan.
Pursuing Profit and Purpose: The Debate in California’s Statehouse and What it Means for Us
Emily and I just returned from a panel discussion at The HUB San Francisco on Pursuing Profit and Purpose: The Debate in California's Statehouse and What it Means for Us presented by The Aspen Institute and Omidyar Network. The focus was on two bills going through California's legislature that could...
L3C Program – Thursday, July 7, noon – 1:15 pm – San Francisco
Emily and I will be presenting "Understanding the L3C" for the Bar Association of San Francisco's Business Law Section this Thursday from noon to 1:15 pm. Attendance is open to anyone who is interested (not just lawyers). You can register online here or just show up at the door...
The Profitable Side of Nonprofits – Part II: Different Legal Structures
What begins as a revenue generating idea for a nonprofit can sometimes develop into a larger endeavor, possibly requiring consideration of a subsidiary to house the planned activities. Many times, these are activities that mix social and business purposes, and the programs or entities that operate them are often...
Corporate Flexibility Act of 2011
On February 8, California Sen. Mark DeSaulnier introduced the Corporate Flexibility Act of 2011 (SB 201) which would authorize and regulate the formation and operation of a new form of corporate entity known as a flexible purpose corporation. As stated in the Legislative Counsel’s Digest: The bill would specify the required and permitted...
Incubating a Nonprofit Social Enterprise
How can we incubate an innovative, profit-making nonprofit project? As covered in our last post, Starting a Self-Sustainable Nonprofit, it may be possible and advantageous to operate a sustainable, profit-making, charitable project as a nonprofit organization. If this route is chosen, the leaders should ensure that the organizational,...
Fiscal Sponsorship is Maturing as a Field
There is a terrific article on fiscal sponsorship written by Melanie Beene, President and CEO of Community Initiatives*, in the Fall 2010 issue of GIAreader (published by Grantmakers in the Arts). In "Fiscal Sponsorship is Maturing as a Field," Beene describes the evolution of the practice of fiscal sponsorship...
Opportunity Collaboration 2010
I had the pleasure of being invited to, and attending, the second annual Opportunity Collaboration in Zihuatanejo, Mexico. The “OppCollab” is self-described as a poverty alleviation unconference and is held over 4 full and 2 part days. Unlike traditional conferences, the substance of OppCollab is not presentations, but discussions...
SOCAP10: At the Intersection of Money and Meaning – Updated 10/09/10
SOCAP10: "Now in its third year, SOCAP10 is the largest interdisciplinary gathering of individuals and institutions at the intersection of money and meaning. Impact Investors, social entrepreneurs, funders, and other innovators come to SOCAP to build a movement. SOCAP 10 will seek to answer the question ‘What’s Next?’ for...
Maryland’s Benefit Corporation
On April 13, 2010, Maryland became the first state to recognize a new corporate form called a “benefit corporation” (not to be confused with a “Certified B Corporation”) when Governor Martin O’Malley signed into law, Senate Bill 690, which allows corporations to pursue socially responsible purposes in addition to...