More and more, people are thinking about how
for-profit business can be used to make a social impact in the world, and some are even considering
how starting a business that focuses on making a social impact could even be a better path for
them than starting a non-profit organization. Now, one result in this shift in thinking about how
for-profit businesses can make an impact is the rise of the B Corporation. These are businesses
that are required to make a positive impact on people and the
environment while they generate
a profit! But how exactly do b corporations work? And why would anyone want to start one?
That is what I will cover in the rest of this video with the help of a special friend of mine
who might be familiar to some of you - so keep watching for that. Welcome or welcome back!
Once again, I'm Amber Melanie Smith. I am a non-profit founder and executive director of the
nonprofit that i started, and i make these videos here on YouTube to help folks on their socia
l
impact journey - whether that involves starting a non-profit or social enterprise, or in this
case, we're talking about B Corporations. Just how you get out there and make an impact in
the world in a world that needs it so much. So check out some of my other videos on these
topics, don't forget to hit that like button, and subscribe to my channel for more videos. And
as I've mentioned in the past if you need a little bit of help or guidance or resources check out my
website, FounderToFul
lTime.com where I've got some great trainings and resources up there for folks
especially starting a non-profit organization. B corporations have sprung into existence and
have been just growing over the past decade. According to the Harvard Business Review, the
first wave of b corporations were officially certified in 2007 - so not that long ago.
And according to B Lab, the organization that certifies the corporations, there are over 3
500 certified b corporations in over 70 countries as o
f today. B corporations can be various sizes
there are some that are very small some that are large but here are a couple that you might have
heard of before - Patagonia, Ben and Jerry's, Cabot Cheese - one of my personal favorites - and
Seventh Generation cleaning products. And as i mentioned before, starting a for-profit business
and getting it certified as a b corporation could potentially be a viable alternative for
those who want to make an impact in the world somehow but are not quite
sure that starting
a non-profit or the nonprofit structure is the right fit for them. To talk through some more
of these basics about what b corporations are and how they work we're going to revisit one of my
old friends, Richard Bobholz from Law Plus Plus. You might remember him from a couple of videos
i recently did around legal questions when you're starting a non-profit so let's go have
a chat with Richard. Okay, what exactly does b corporation stand for and what is a b corporation
su
re b corporation is a for-profit entity it's called a benefit corporation so it is a hybrid
vehicle that's halfway between a non-profit and a for-profit it has the non-profit aspect of
you are liable to the community as a whole to your employees to the environment as well as profits
whereas there's only a duty to profits inside of a for-profit business and you can see why some
people would want the other stuff added in as well right so b corporations are still all about
making a positive im
pact in the world just like non-profits except their for-profit businesses
yep yep they are they're a formally created social enterprise so they actually have a
legal standing in most states and for the states that don't have a legal standing they have
a oversight board that's a b labs bcorporation.net so let's say someone wants to start a b corp what
are what are the requirements sure the first step is going on to be corporation.net and filling out
the assessment the assessment is going to
tell you whether you need to focus more on your employees
the environment the community as a whole to make sure that you actually meet the minimum threshold
for a benefit corporation what do you mean by the minimum threshold so you have to like make a
minimum amount of do do a minimum amount of good in the world basically um yeah so they give you
a score uh and then you need to get at least 80 on that score so you can do really good in
employees you can do really good environment but if yo
u're not also doing pretty good inside
a community then you're not going to be able to reach that threshold and it's going to tell you
that and you're going to get this assessment and it's going to tell you before you spend any money
and there and it's going to tell you where to address and how to make your company just
that much better to meet that threshold so it's measuring the various ways that you perform
ethically and do good in the world so things like how well you treat your employe
es how good your
business is for the environment stuff like that so you mentioned paying something how do folks
register how do you become a b corporation sure after you do the assessment you uh you get to the
end and it says would you like to schedule your your one-on-one so you'll get someone at the
organization to work with you to make sure to verify the information you put in and work
with you on the areas that you could improve and so that initial step i believe is 150 just to
get tha
t one-on-one with the person once you get everything done and you qualify the registration
is a thousand dollars so it's a lot of up-front work it takes several months to get there but
then once you're there you're in you have a reassessment every two years i believe
and you have to pay the annual fee each year and the benefit would be you obviously
are doing good in the world like a non-profit but unlike a non-profit do you have a
little bit more control do you have a little bit more abili
ty to generate profit
yeah yeah absolutely um so one of the criteria is uh that's going to limit you the only one that
they have is really the amount you make versus the amount that the lowest employee makes so there's
actually a ratio they make sure you stay within but aside from that you have total control over
your company as you would any for-profit company you just want to stay within their parameters and
it's a totally legitimate way to do some good in the world even if it's not throu
gh a non-profit
entity yeah okay so now i am curious what do you think of b corporations do you feel like they
could be something you'd be interested in starting or is starting a non-profit definitely the way
for you or some other alternative that i didn't discuss in this video share in the comments below
and as i mentioned before for any of those who know that they're interested in the non-profit
path specifically check out my website founder to fulltime.com and some of the resources
and
trainings i have there on the process of starting a non-profit and developing a sustainable
fundraising plan if you're looking for just general resources and tips and information about
social impact and nonprofits and other types of creating that social impact i've got a great
newsletter for non-profit leaders and change makers of all kinds i will leave the link to that
in the description below the video as well but i send that out regularly it's got articles tips and
sometimes even funding
opportunities that i come across so definitely you'll want to subscribe
to check those out one more thing i promise if you are on facebook i have a awesome group it's
called change the world or bust we've got a couple thousand people in there now from all over the
world trying to create a social impact somehow so come and join my community there and i hope to see
you thanks for watching that's all i got for today don't forget to like this video and subscribe to
my channel and i hope to see
you next time bye you
Comments
What do you think of the B Corporation concept / model?
I’m currently researching more options to see what resonates with my core values and vision. Thank you so much.
Great video Amber! New subscriber to your channel. Learning all about starting a non-profit organization. My wife currently works for a B corporation and now I understand much more clearly what they are all about. Thanks for the helpful and practical content.
More one very good video here. Are you helping a lot. Thanks. 😀
Great topic. It’s but a lot of lawyers and accountants don’t even know there is such a thing as a B corporation. After I started my company, I considered a B corporation designation. And, I elected to stick with a standard C corporation because it is really all about what you actually do and not your designation. One day I may revisit it but knowing myself, I doubt it.
Tuning innnn
I’m still doing some research on my organizations needs and qualifications for being a B corporation, but what I have learned from you, and a very few others, I feel my fit is in the nonprofit sector of business. I do think this is a good way to be beneficial to the community and I may still consider this as being a way to help support a bee corpse, target, nonprofit assistance.
Well. This is something great.
Great info
thanks for the video, not for profit will do for me. A B corp might actually work for someone running developmental sporting programms in the community.
Have you considered doing a video on worker cooperative non profits?
Hello and thanks for all your fantastic videos. What advice do you offer for a nonprofit organization with a 501c3 status with the irs.(original established in 2003 reinstated 2020) wanting to apply for Grant funding for our nonprofit organization. Please assist me if you can
I'm currently in college, getting my business/accounting BBA, with intentions eventually of buying rental properties for the purpose of using them to fund an animal rescue (ideally on the actual property). So, I'm trying to figure out if a B-corp or a nonprofit would be the best model. I have no interest in taking any donations to fund the project, and I would rather not be beholden to anyone who is going to demand profits or dividends, since all of the profits will be going to feed/shelter/neuter animals or expand the project. Any advice?
I just thought of something Amber. If I were to be a founder of one said B-Corporation and striving for a certification, my new found standards would need to meet in the middle by using the non-profit "adage" (if you will) religion being the social topic, my concept is to allow only 45% shareholder, to me, the founder, as opposed to 45% for the conglomerate shareholders with the middle 10% going to the church, all as shareholders. Kinda like giving it to God. This way we as the complete shareholders have equal responsibilty to create performance requirements and in end establish the unwavering standards like bequethed upon a church. What do you think of tis Amber?
With the B corporation are you able to give a tax deduction for donations?
I have a B corportation and love it.
Are B Corporations possible in the UAE (where I am based) or are they limited to only some countries? Can you please find out (if possible).. Many thanks again Amber !
I am curious to understand if people find B corporations easier to become sustainable than non-profits?
Non-profits still make a profit, they have to to stay alive. Why can't an LLC for example or a "for profit" company still have an element of social impact or a "do good" cause, or can they? I think the real reasons for these different corps are for tax purposes and not to validate your ability to "do good". So what if I am "for profit" but still have a social cause? I didn't know about B corps, thank you! Are B corps easier to start than a non-profit? What about ownership and company control, is that different as well? Many thanks!
It kind of makes me feel like a company is trying to use Environmental conscientiousness as a selling point to generate more money for themselves. How do they cheaply maintain good reputations without coming across as two faced about the profits portion?