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May 21, 2008

"For most of a century, idealistic people have been encouraged to use anger, protest, lobbying, and legal action in order to make the world a better place. While most certainly some of these behaviors and activities were necessary, we have reached the point at which the social benefit of such behaviors is decreasing. We have reached the point at which creation, rather than attack, ought to be the first obligation of reformers. The social entrepreneurship movement is the first tip of this iceberg." --Michael Strong

The B Corporation

Mike Hannigan and Sean Marx started a company with an unusual mission: donate all profits to charity. As they grew to sales of more than $26 million, Hannigan and Marx often wished for additional capital to help fuel that growth but stayed away from outside investors for fear of undermining their philanthropic mission. Now, they've found a solution to their dilemma -- writing their values into their company's legal structure as something called a "B corporation." B corporations, with the "B" standing for "beneficial", must receive a passing grade on a long scorecard that covers environmental practices, employment practices, purchasing policies and whether their products are beneficial to society. They must also adopt legal language stating that their directors may consider the welfare of outside stakeholders such as employees, customers, their community and the environment, as well as the financial interest of shareholders.