So yesterday we documented a bit of the research that we’ve been doing to nail down a proposal for our senior project proposal at school, and today we wanted to talk about the “business for good” space, an alternative to the shareholder capitalism that seems to be the norm in the world today. Socialists and capitalists can both agree that these type of businesses, with a primary responsibility to provide shareholder value, is responsible for both wrecking the environment and causing the type of economic inequality that we see in the world today. One of the things that I’ve been greatly interested in is figuring out ways to create or promote alternative forms of arrangements, both in the way that both capital and worker power is distributed in organizations. Most of my explorations have been around ways to form worker cooperatives or worker owned businesses, or how to implement these types of organizations using decentralized autonomous organizations (DAO), which we talked about yesterday.
Enter the social enterprise. The Social Enterprise Alliance (SEA), founded in 1998, defines this field as a mix of business, government and non-profits, or, as “organizations that address a basic unmet need or solve a social or environmental problem through a market-driven approach.” SEA is a membership organization, and has several chapters throughout the United States.
Things start to get a bit confusing when you add in B Corp and public benefit corporations. While SEA defines social enterprise as a business model, B Corp refers to a paid certification, and public benefit corporation is a “legal incorporation type”. SEA gets into some of the distinctions between the three.
B Corp is a certification from the non-profit B Labs, which is only given to for-profit entities. Confused yet? Social enterprises can apply for B Corp Certification, but not all B Corps are social enterprises. The certification fees are not cheap for someone hoping to start a new organization. B Labs requires one year of prior work for thier $1000 annual certification, although startups can get a provisional certification for half that.
SEA defines a public benefit corporation as one that falls under a specific set of incorporation laws that are available in a limited number of states, 25 plus DC, based on the details over at BenfitCorp.net. Identifying as a public benefit corporation allows business and startups to signal that they have a purpose beyond maximizing shareholder value. I have a feeling that this type of distinction may become very popular in the future.
SEA does a good job of distinguishing between the three of these concepts. Organizations can be all three, although SEA is the only one that allows non-profits and individuals to join. I’ll be taking a further look at their membership offerings and figuring out what else needs to be done to drive these alternatives to exploitive capitalism.
In the meantime, I would encourage you to hop over to B Corp’s directory of certified businesses. I was quite surprised to see the number available in my state, and there were several that I felt the need to reach out to about further information.