May 02, 2019
Sharing Best Practice within the Social-purpose World
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As benefit corporations become more popular, their social entrepreneur leaders have a source of wisdom --- those who manage 501c3s (aka nonprofits). Benefit corp leaders can learn about impact measurement; the statutes in most of the states allowing the formation of benefit corporations require some kind annual publication of impact. Nonprofits know all about that -- things like what metrics work for which kind of impact and systems and processes that can be used to track impact over time. And don't be fooled by the "nonprofit" title - they also need to have income exceed expenses.
The other area nonprofits are ahead on is governance. Nonprofit leaders are used to interfacing with a board and know the work that it entails to keep their board informed and engaged for the long-term. It is still relatively rare for private companies to think about a board. And boards do take time to build well. A "real" board is one with more than a few of your relatives on it. Real boards meet multiple times a year and have at least 5 independent directors who bring insights from beyond the CEO's sightline. Having a real board makes the claim of benefit to society much stronger and verifiable. Indeed, some state statutes require that there be a specific board director designated as responsible for oversight of the benefit and its reporting.
So try reaching out to another part of the social-purpose world. For social entrepreneurs, try going into Guidestar to find nonprofits who work in the area you do and use the IRS's NTEE codes to search. The sector is huge with tremendous variety. For nonprofits who want to get connected to these benefit corporations, or those who want to learn more about benefit corps, go to Benefit corp.
Comments? You can contact me directly via my AdvisoryCloud profile.
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