Finnegans has donated over $1 million to alleviating hunger since its founding in 2000, while Binary Bridge has served more than 60,000 people at dozens of remote medical outposts across the globe. BackpackEMR’s peer-to-peer technology enables users to update medical records without an internet connection—making it essential in some of the world’s poorest places. Please consult with your attorney for legal advice or accountant for tax and financial advice. But the King Arthur Flour Company is different from its major competitors, and not just because of its baking qualities. “I think consumers and employees are pretty savvy,” says Duniway. Casey Helbling, the CEO and founder of Software for Good, jokes that they want their business to “disrupt” the normal flow of money. Beneath all the talk of values and benefitting society, benefit corporations are hinged upon the belief that making money and making an impact are aligned, not contradictory. For example, Twin Cities-based Sunrise Banks posts annual impact reports online. Some famous benefit corporations are: Kickstarter; Method; Plum Organics; Patagonia “We need to find a different solution.”. We didn’t get in the … When a company becomes a Benefit Corporation, it can choose to make further commitments. ... (The company also became a Benefit Corporation last year). Sierra Club 4. “There’s authenticity with what we do,” says Berglund, “I think people see that. B Lab just announced the 2014 B Corp Best for the World List with the 92 top-rated certified B corporations. Within five years of this adoption, 31 other states passed legislation created PBC (each state with its own unique variation). It uses recycled paper and renewable energy and gives food scraps to a local farmer. These Shareholders entrust the Directors to act in their interests; in the past the courts have defined shareholder interest as profit maximizing – Director decisions should be purely financial decisions. “We’re doing what TurboTax did for taxes and Airbnb did for hospitality, but we’re doing it for Section 8 housing,” explains Liz Tupper, director of product strategy. World Wildlife Fund 9. Boy Scouts and Girl Scouts 6. For workers who want to do good and pay their bills, a benefit corporation job is an increasingly attractive career move. Consider this mission when making decisions (note, this doesn’t mean they need to. Adopt a third-party standard. When the Minnesota Public Benefit Corporation Act was passed in 2014, it was called an overlay of the traditional corporation model. King Arthur is 100 percent owned by its employees, who share in profits and receive 40 hours of paid volunteer time each year. Susan G. Komen Breast Cancer Foundation On a smaller, more local level, home owners associations and little leagues can also be non-profit organizations. For other requirements, see the Public Benefit Corporation Act of Colorado … She has worked with benefit corporations in the past and penned an op-ed about the legal structure for Star Tribune. As previously discussed on this blog, a few companies have gone public as “Certified B Corporations,” but now we apparently have the first company to file for its IPO as an actual Delaware “public benefit corporation” (PBC). Minnesota examples: Finnegans Brew Co., Sunrise Banks Social by Selling are corporations that sell services or products that benefit specific underserved communities. 3. Nationally, “benevolent businesses” like Patagonia, Seventh Generation, and Kickstarter are taking extra steps to hold themselves to high standards. Patagonia is an example of a corporation that sought the PBC structure. Some examples of successful non-profit corporations are: 1. The public benefit corporation must be intended to produce a public benefit and to operate in a responsible and sustainable manner. by Cydney Posner. There is a distinction between a Public Benefit Corporation (PBC) and a B Corp. “Nonprofits are really difficult,” says Most. So, how does one determine if a benefit corporation is truly doing good work? Software for Good also designed the app for Minneapolis’ Pride Month. Minnesota examples: Software for Good, Binary Bridge, the Data Bank. A benefit corporation is a Virginia stock corporation whose articles of incorporation provide that it is a benefit corporation and that has, as one of its purposes, the purpose of creating a general public benefit on society and/or the environment. Patagonia long wanted support issues around social and environmental causes, but had difficulty balancing this mission with retaining a Corporate status. In Colorado, a Public Benefit Corporation is organized as a for-profit corporation or domestic cooperative. Smithsonian Institute 7. for ages, and the younger generations are really seeing that you can have both a good job and a meaningful role in the community.”, In practice, Software for Good’s social impact is in web-based apps. In other words: to not just make rich white men richer. A PBC is a for-profit institution that provides some sort of benefit to the environment or public. This new entity is catching on fast in different states, and serves to fill a unique niche in the suite of entities. Could a company tout a flimsy social purpose to produce advantageous marketing? A benefit corporation is responsible for creating an annual benefit report, which Subtitle 6C(8)(A) requires must include: A description of the way the benefit corporation pursued a general public benefit during the year and the extent to which the general public benefit was created; A nonprofit public benefit corporation refers to a charitable organization that is advantageous to the general public, meaning that anybody can benefit from its actions. Yes, benefit corporations could be another tool for greenwashing [deceptive PR], but that’s not the case for most of these businesses.”. She explains how much of her time during those initial years was spent chasing money: “We had had to go look for funding. “You can totally change the model. Binary Bridge was formed initially as a 501(c)3 back in 2015 but reformed as an LLC in 2016, then as a benefit corporation in 2018. That’s fine, they just have to say it,” explains Sarah Duniway, principal at local corporate law firm Gray Plant Mooty. Jacquie Berglund, Finnegans’ CEO and co-founder, was one of the first locally to evangelize this business model. At this point, it’s not the government’s job.”. A B Corp is not necessarily a PBC, and a PBC is not necessarily a B Corp. Skeptics of this model point to the potential for diminished shareholder returns. It could be really general. Likewise. If throwing the money you have left at the end of the month at a charity feels like putting a Band-Aid on a gaping wound, why not add “working to solve your community’s systemic problems” to your job description? One of the best examples of social impact through financial success is Finnegans Brew Co., the longtime beer maker that opened its downtown Minneapolis megabrewery in 2018. A benefit corporation differs from a typical for-profit corporation by allowing the entity to consider how it can provide a greater good for the public, otherwise known as a public benefit. We’ve been going on 18 years and there have been some very lean times, and now people seem happy to support us because they know what we’ve done.”, Lori Most echoes Berglund’s beliefs that a good business will lead to larger social impact. “A lot of people say it’s good enough to make my money here and then I’ll donate there, but that idea is beginning to fade.”, One need only read today’s headlines to find examples of for-profit businesses detrimentally impacting culture, the environment, and employees. Board members agreed with the investors: “If we bring this to U.S. markets, we could be making a lot more money,” Most recalls. Finnegans donates 100 percent of its profits, as well as financial and food donations, to food bank partners, to supply food shelves with fresh produce and feed families across the Upper Midwest. Other states may call these "benefit corporations." Prepare an annual benefit report identifying: The actions and methods used to provide a general or specific public benefit. Almost nine in 10 millennials said they would work for less pay if it meant their company’s values aligned with their own, according to a 2018 LinkedIn report. The entity’s name can include the words "public benefit corporation" or the abbreviations "Pub. Marc Andreessen, Netscape founder and venture capitalist, infamously compared the dual-motivation business structure to a houseboat: “It’s not a great house and not a great boat.”, Jeff Ochs puts it a little differently. 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