In this course we will take the social business opportunity that you have identified in the first course to a higher level. Specifically, you will develop a business model using the Business Model Canvas. Gradually you will also start writing your business plan. Moreover, you will be able to assess different organizational forms and select the one that is appropriate for your developed business model. By the end of the course you will be able to compare different social impact investment methods and choose the right funding strategy for your social venture. Note: It is highly recommended to have completed Course 1: 'Identifying Social Entrepreneurship Opportunities' before you start with this Course!
New Organizational Forms in the US: L3C & B Corp | Jeffrey Robinson
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來自 Copenhagen Business School 的課程
Social Business Model and Planning for Social Innovation
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從本節課中
Selecting an Organizational Form
In Module 4 you will intensify your knowledge about various organizational forms. In particular new organizational forms, tailor-made for social enterprises, in the US and the UK will be presented and you will be encouraged to scan the legal framework in your own country. Once you have identified a form that matches your expectations you will continue your business plan process by starting to think about funding options in the next Module of this Course.
與講師見面
Kai Hockerts
Centre for Corporate Social Responsibility
I would now like to welcome back Jeffrey Robinson,
Professor of Social entrepreneurship at the Rutgers University, who will talk to
us about the specific organisational forms that exist in the United States.
Jeff, when a social entrepreneur comes to you and asks you about what
organizational form they should select, what is, what is your typical advice?
What alternatives do people in the United States have?
>> So, students ask me all the time, and practitioners ask me as well:
what organizational form should I choose.
And, one of the things we have in the United States, are,
what I'll call hybrid type of organizations.
Where you could have set your,
your social entrepreneurial venture up as, a non-profit.
Or, you could set it up as a for-profit.
But, there are some forms that are in-between.
In the United States, we have, something called, the benefits corporation,
some people call them B-corps, and
we also have another form called the L3C, so let me tell you about those.
The, but the big issue here is how can you find sustainable ways to,
to fund your, your venture.
The, the forms that we call L3C and B Corps in the United States, allow
us to harness the capital markets, in order to do the social good we want to do.
One of the challenges of having a nonprofit is that you can have lots of
people provide donations or go after foundation grants.
But you can't have investors in the traditional sense.
so, if you go with the for- profit model, the for-
profit model allows you to have investors, but sometimes, the social impact
investors want to really understand how you're providing your social impact.
How do they know that you're not just going to,
be more profit-oriented as opposed to having the social motive as well.
So, benefits corporations allow you to have both.
In fact, it allows you, it's an organizational form that is
a corporation but it allows you to prioritize the social benefits.
25 states in the United States have approved this form as
a new form that you an choose to set your, your social venture up as.
In particular it's, the most common elements of
these benefits corporation forms include putting into
your organizational documents that, what your social mission is.
And what the social impact purpose will be for your, your organization.
Secondly, it allows you to have, or to produce, a social impact report,
or social benefits report, that, is designed to explain
to the public what it is that you've actually accomplish in the social sense.
And then thirdly, the other aspect of it is,
it allows you to accept investments from, social impact investors,
that traditional non-profit organizations can't always do.
This solves a problem, a problem that we've seen a lot in the,
in the United States where people are asking,
how do we know what, that you are really a social venture.
By becoming a benefits corporation,
you have, one of the ways is that you can legitimize yourself in this space.
One variation on that, which is called the B Corp.
The B Corp,
that we have in the United States is actually a third party certifying group,
that will assess whether your,
your company is, is truly a triple bottom line company.
And you have to, there's a rating system, and
you have to score more than 80% on the rating system.
And of course, you can find out more about that by doing a search on, on B Corps.
Another organizational form that we have in the United States is called the L3C.
L3C stands for Low Profit Limited Liability Company.
The reason that it's called a low profit limited liability company is we,
we've already had an organizational form called the limited liability company,
which is a great form to set up, a new, for-profit company.
The low profit part related to social ventures,
has to do with what the ventures are going to do with their profits.
So when you set up an L3C, there's a cap on how you
might distribute any profits at the end of the fiscal year.
This limitation, typically around 35%, also legitimizes you,
from, from the social, in a social venture sense.
If, if I'm an, social impact investor and,
I know that I'm going to invest in your company, if I know that you're not
going to redistribute more than 35% back to the owners of the company,
that, that means that the 65% of your profits are going to be
reinvested back into the social purposes of your organization.
There are many social impact investors that, that is a comfort to them,
you might say.
But, in, in, in reality, what it's saying is
that you are, you are truly providing a social benefit,
to, to, communities you're working in.
So those are, those are a couple of forms that we're using.
I know other places in the world have, other types of,
of forms I think through, all have variations on the same theme.
But in essence you're talking about how to provide impact investing,
and how to legitimize your social venture, in the social impact space.
>> Could you give an example of such a B Corp company, what it does, and
what makes it different from a normal company.
>> So there's a company in the New York City area, it's called Ice Stone and
Ice Stone takes recycled glass out of, out of the waste stream and combines it with
concrete and creates these wonderful, these wonderful counter tops.
Which are, now, you know, environmentally, are,
they are sustainable because you are actually taking recycled glass plus this,
this concrete mixture and making what looks like granite but it's not.
Or marble, and it's not.
It's, it's a very great process for creating counter tops that could be used
for bathrooms or bars, or for desks or, or what have you.
What makes this company really,
interesting is that they really think about a triple bottom line.
While they, not only are they doing this with an environmentally sensitive
approach, they also produce the materials inside of a, a, a, a lead certified,
it's a environmentally certified, manufacturing space.
They, they have open, an open floor with,
lots of natural light, in fact they change, [LAUGH] what's interesting is
they change the hours though that they're working during the year due to
the sun because they're using so much of the natural light.
It's, it was, set up in an area of New York City, called Brooklyn and
in the Brooklyn Navy Yard, what we see there is there were lots of,
old factories and manufacture spaces that have gone out of business, but
now were repurposed, for this company.
And then lastly, they hire from the local economy.
They hire from folks who traditionally haven't had a whole lot of
great job opportunities and give them living wage jobs.
You know, not just a basic wage or a minimum wage,
but they give them enough money in salary that they can support their families.
So some of the, all of these things are unusual for
companies in the manufacturing environment and, you know,
I really respect what they're doing, but the proof is, in, in what they do.
They're a certified B corp.
They have been evaluated every year in terms of
what kinds of social and environmental, impact that they're making.
And at the end of their, their processes, you know,
they come up with a really great product.
Since there's a trend for greener products in the United States, this company is
well positioned to not only be able to make a social and
environmental impact, but also to be sustainable in the long run.
