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Reading: “Brand Citizenship Rules” by Allison McGuire

We know branding matters. Companies, non-profits, social enterprises, and all kinds of organizations spend time, resources, and energy building and maintaining a brand.  In these days leading to Super Bowl 2013, professional sports teams are a ripe example of importance of creating team, loyalty, and a brand to believe in.

Reading: “Brand Citizenship Rules” by Allison McGuire
But, as Allison McGuire (of Network for Good) unpacks in her informative post, there is an emerging focus on building a greater mission into the backbone of a brand. In a world of smartphones, tablets, and instant access to information—informed consumerism isn’t something you have to do before or after your shop, but something you do while you are deciding on products and services to add to your shopping cart.
Enter brand citizenship. It is the broader concept of connecting core values into all layers of an organization’s operations. Associating a brand with an experience or aspirational cause that is greater than the sum of what the organization is selling—is what consumers increasingly seek. People want to support the good guys not just with their social media ‘likes’ and ‘shares’ but with their hard-earned dollars.

“So, how can you plug in your audience to your CSR portfolio and brand identity? Start with cause,” suggests Allison, “Your audience feels good about giving to a cause they care about and your brand citizenship gets a lift. Win-win.”

credit: Armchair Advocates
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Understanding Third Party Standards for Benefit Corporations

I had the pleasure and unique opportunity to co-write a guest post for TriplePundit with David Jaber, a Principal at inNative–a full-service consultancy assisting companies and organizations meet their environmental and sustainability goals.

Below are a few excerpts. You can read the entire post here.
What is a third party standard used in Benefit corporations?
Baked into the Benefit corporation (in each of the seven states which have passed the new legal structure) is a commitment to transparency. This includes the requirement that they publish an annual benefit report that assesses performance against a third party standard.
In this context, a third party standard is litmus test by which a company’s social and environmental impact is defined, reported, and assessed. The third party standard is an independent standard that vows to be comprehensive, independent, and credible – in addition to being transparent.
A look at three third party standards:
  • B Corporation – B Lab, the organization behind the B Corp standard, has proven a champion of third party business standards and state legislation.  Their Impact Assessment questionnaire provides the framework, and responses are then weighted to determine whether or not a company has the capacity and ability to be become certified as a B Corp
  • ULE 880 – This manufacturer standard has a rigorous 1000-point scoring system and looks comprehensively across company governance and the web of relationships between suppliers, customers, employees, and the natural world.  The prerequisites approach is reminiscent of LEED rating systems, and should feel comfortable to those who have worked with green building certification.  For the service sector, the ULE 881 standard is said to be underway. TriplePundit reviewed the standard in it’s infancy.
  • GreenSeal – Less known than its product standards is the fact that GreenSeal has a standard for product manufacturers themselves.  ‘GS-C1′ features a Bronze/Silver/Gold certfication structure and clear requirements for policies and actions across an array of CSR issues.  It puts teeth behind a GRI-like framework.
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What is TriplePundit?

TriplePundit.com was founded by Nick Aster in 2006 as a new media platform for the conversation on sustainability in business.  Intended to feature news and editorial blog posts, the focus has been on serving as a catalyst for conversation about social entrepreneurship for a business audience. The site gained momentum in 2011 and merged with Sustainable Industries in October 2011.

The name triple pundit alludes to the triple bottom line concept of assessing a company’s success by a triple bottom line of impact on people, planet, and profits…rather than the traditional bottom line of profits only.

TriplePundit regularly posts on topics related to clean tech, social entrepreneurship, eco-friendly products, micro finance, poverty solutions, impact investing, and issues surrounding water.

QuarterWater’s interview with TriplePundit founder [VIDEO]

Founder of QuarterWaters.com, Dwight Peters interviewed Nick Aster in December 2011 in “Triple Pundit: How to go from 0 to 200,000 viewers a month – with Nick Aster.” In the open discussion, Aster outlined the history of the site, various revenue streams, and how TriplePundit grew from being a side project to being his full-time venture generating six-figure revenue annually, and gaining momentum.

 

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Learning Adaptive Persistence from ‘Life Entrepreneurs’

The new year is swiftly underway and with its first month nearly behind us, an interesting theme seems to be taking hold at the Innov8Social headquarters.
Adaptive persistence. The concept, described by entrepreneurs and leadership experts Christopher Gergen and Gregg Vanourek in their book Life Entrepreneurs, describes a trait social innovators can develop in the face of adversity.
growing through concrete
What is adaptive persistence?
Adaptive persistence is applying flexibility and ingenuity to situations of resistance, rejection, and refusal—all common ends a new social innovator is likely to face.  Specifically Gergen and Vanourek describe it as “hanging in through adversity while creatively tailoring one’s approach the circumstances.”
How does adaptive persistence apply to social innovation?
Social innovation, at its essence, is about finding new connections between existing disciplines, subjects, and concepts. It’s about look at how business can create social impact. Or how a triple bottom line can be integrated in a company’s bookkeeping. It focuses on the entrepreneurial potential of maximizing impact of a non-profit beyond maximizing funding.
It looks at existing societal issues, environmental concerns, and proven solutions with fresh eyes and innovative intention.
All of that, however, is to say that social innovation is about trying, testing, and calculating leaps of faith to achieve new success. And along the way, a social innovator is nearly guaranteed to face some form of resistance–internal, external, and everything in between.
In those situations, the concept of adaptive persistence can provide a respite. It can be a recharging station. The choices are not only to keep doing or stop doing—adaptive persistence creates the option to refine, reframe, and recalibrate efforts continually and consistently so that small failures can be written off and released, making way for new incremental successes.
A new year of Innov8Social
2012 is shaping up to be a bold and interesting year for Innov8Social. While we have spent the past months dipping a toe in the social innovation sea, the new year brings new opportunities for furthering understanding, being able to discern grey areas of the field, and beginning to discriminate nuances of its practice.
You may notice sporadic posting in the early part of the year—the exploration is very much alive and occurring in offline avenues which will be reported on in due time.
As we use concepts like adaptive persistence to navigate the waters, we hope it can provide clarity and support to you in your social innovation exploration.
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Exploring the 10,000 Hour Rule [VIDEO]

“I’m a big believer of the 10,000 hour rule” was what a fellow attendee shared with me at the Global Water Crisis Symposium which was raising awareness and funding for the Global Social Change Film Festival, set for April 2012 in New Orleans.A smile, and a nodNow, to be totally honest, I hadn’t heard of the rule so smiled and nodded at the time. We had been talking about social change film—and she shared that she had recently optioned a script with underlying social themes. Being a writing enthusiast, I was impressed and curious—how do you go from a career of consulting, running a successful business, and serving the nonprofit community to learning how to write successful screenplays! She cited the 10,000 hour rule, classes, and lots of writing as her path of choice.

There are no coincidences

And while I made a mental note to Wikipedia this “10,000” reference later, by (likely no) coincidence I heard the ‘10,000 hour rule’ referenced again the very next morning in a podcast.

Malcolm Gladwell explains 10,000 hour rule

It turns out that Malcolm Gladwell, of Tipping Point and Blink fame, coined the 10,000 Hour Rule in his 2008 book Outliers: The Story of Success. After studying successful, driven, and lucky individuals who have risen to the top of their fields, he noticed a similarity in the number of hours of “deliberate practice” it took for them to achieve greatness. That would be 10,000 hours or approximately 10 years.

Listen to Mr. Gladwell describe the concept and his findings to Charlie Rose here:

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Does the 10,000 hour rule apply to social innovation?

Aligned with my exploration of social innovation–harnessing entrepreneurship for social good, I wondered how the concept applies to emerging fields. Gladwell’s explanation makes sense when considering violinists or basketball players because the fields feature well-established technique and renowned experts.

But does the 10,000 hour rule apply to social innovation? Absolutely. Gladwell describes outliers—those who lived outside of the norm or mainstream–and, by virtue of luck and work, managed to rise to unprecedented ranks in their fields. Essentially, they caught a ride on an emerging field, and dedicated time and effort into understanding it.

Social innovation is ripe for research, understanding, and exploration precisely because it is an emerging and evolving field. Let’s make our mistakes now, formulate best practices, and then be willing to reinvent ourselves at a moment’s notice.

Our dedication to understanding the field and our flexibility and maneuverability could mean not only new opportunities for social change but a mainstream shift in the way business is done and the role of sustainable enterprise on a global scale.

One hour at a time

I feel a sense of excitement and even relief in learning that there is no quick escape or handy shortcut to pursuing the things we find important. Instead of trying to find an easy in, we can focus on choosing the fields we are wildly passionate and intellectually challenged by, and dedicate a perfect 10K to the task, one hour at a time.

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3 Ways Investors Fund Social Entrepreneur Startups

At the Green Startup Legal Discussion on Day 2 of the San Jose Green Business Academy, the attorney panelists covered important legal issues for social entrepreneurs. Topics included approaches to legal structure, options for incorporation, and funding.

Green dollar bill

Attorneys from Starter Law, a law practice focused on helping entrepreneurs launch and grow their businesses, outlined a few common ways investors fund start-ups. Below are overviews of the funding methods along with notes from the panelists.
3 Ways Investors Fund Social Entrepreneur Startups

1. Convertible notes.  Also known as convertible debt, this is money an early-stage start-up raises in the form of a loan. It usually “converts” to equity (i.e. shares) sometime in the future with a discount (so that the angel investor often pays 15-30% less than the sticker price on each share). Depending on the provisions of the convertible note, the debt may automatically convert to equity when the start-up receives its next round of funding. This arrangement may feature a maximum price per share the angel investor will be required to pay if the convertible debt automatically converts to equity.

Notes from the panel: Convertible notes are inexpensive to set up and do not generally require very complex agreements. They are fairly flexible. Notably, investors are not equity-holders, they are creditors (which only convert to equity by provisions of the note).

2. Preferred Stock Financing. As the name suggests, preferred stocks enjoy preferential treatment over common stock. Startup companies issue preferred stocks to investors, giving the company needed financing and giving the investor valuable stake in the company. Preferred stocks are generally valued higher than common stocks, in scenarios of liquidation or acquisition preferred stocks are paid out first, and preferred stocks often include voting and anti-dilution provisions.

 Notes from the panel: This method of funding gives investors equity in the company, a seat on the board of directors, and all the bells and whistles that come with preferred stock. One type of preferred stock financing is Series A.*

3. Series Seed Financing. Similar to preferred stock financing, investors receive preferred stock in exchange for investing in the startup. Series seed financing generally refers to simplified version of preferred stock financing, which streamlines & expedites the purchase of preferred stock by seed capital investors. This mode of financing may not include some of the protective provisions valuable to social entrepreneurs and impact investors.

Notes from the panel: This financing model is not as complex as Series A and gives some, but not all, of the rights as Series A.

*This post has been edited to accurately capture the points made by panelists. 

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What is Social Accounting?

Nope, it’s not accounting with friends. Social accounting has to do with incorporating social and environmental impact into traditional financial accounting. It is related to the triple bottom line that has been espoused by many social entrepreneurs and socially innovative companies.In corporate culture, social accounting is closely connected to corporate social responsibility (CSR).Defining Social Accounting

Social accounting is first and foremost accounting. Similar to traditional accounting, it is a method of quantifying a company’s performance. Only with social accounting, performance is used broadly to include social and environment effects.

Here are definitions from around the web:


SocialAccounting.org defines the term:

“Social Accounting is the process of measuring, monitoring, and reporting to stakeholders the social and environmental effects of an organization’s actions.”

The Social Audit Network (SAN) outlines social accounting as:

“the process whereby the organisation collects, analyses and interprets descriptive, quantitative and qualitative information in order to produce an account of its performance.”

Information Systems Audit and Control Association (ISACA), which provides tools for global enterprise governance for information technology defines it as:

“Social accounting aims to assess the impact of an organisation or company on people-both the internal and external participant environments.”

Accounting Education defines the term on their website and gives an example of its use.
Wikipedia introduces social accounting as:

“the process of communicating the social and environmental effects of organizations’ economic actions to particular interest groups within society and to society at large.”

Wisegeek defines social accounting as:

“Social accounting is a type of accounting that a business performs to place a value on the influence its operations have on society. It requires that enterprises look closely at all that it does and what kind of impact its activities have on people, places, and the environment….[it also] stems from the demand from governments and the public that businesses be more transparent concerning activities and the implications of those activities.”

Beyond Definition

The challenge with social accounting comes at the stage beyond definition. How do you actually factor in environmental and social effect in a traditional accounting scheme? How do you make a particular method of social accounting widely accepted? How do you ensure that it won’t be ‘gamed’ so that companies can appear more socially responsible?

These are questions that will be explored, keep checking back for more.

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Attorney Donald Simon Defines 3 Terms Related to AB 361 (Benefit Corporations) [VIDEO]

Meet Attorney Donald Simon

Attorney Donald Simon explains a few terms related to California’s benefit corporation legislation (AB 361) in the interview below. Simon is a Partner at Wendel Rosen Black & Dean LLP and co-author of AB 361–legislation that would create a new for-profit corporate form in the state for companies wishing to earn a profit while also creating a positive impact on the environment and community.

Watch the Interview

(quick tip, turn the sound all the way up.)

Terms to Know

You can see Innov8Social’s previous interview with Donald Simon–to learn the general features of AB 361 and why social entrepreneurs may choose it as a business structure.  In this interview, he addresses constituency statutes and how they relate to the benefit corporation legislation.
He also explains what the third-party standard is, and the role it will play in assessing a company’s impact on the community and environment. Finally, Simon lays out the supermajority shareholder requirement of AB 361.Simon also offers a few tips and suggestions to social entrepreneurs who are considering incorporating or reincorporating as a benefit corporation.

Shift in Business As UsualWhether you think of the move towards a greener economy as quick turn to consider more than a singular bottom line, or you view it as part of the gradual evolution of the way business is done–you will have noted a shift in business as usual.Former President Bill Clinton recently discussed the changing economy, and interconnected role of private and public sectors in an interview about jobs and the green economy.

And notably, California is not first on the scene of the benefit corporation party. In fact the first state to pass benefit corporation legislation was Maryland, followed by Vermont, Virginia, New Jersey, and Hawaii. Similar bills are proceeding through the legislative process in New York, Pennsylvania, North Carolina, Colorado, and of course, California.

The Update on AB 361

  
Despite the interview’s consideration of terms that will come into effect ‘once’ the bill is passed, in reality, there is no guarantee that AB 361 will become new law. It is currently awaiting Governor Jerry Brown’s review. You can read a full update on AB 361 here, and also learn how to support these efforts to enact legislation supporting social entrepreneurship.Related Posts:

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Social, or Social?

Attending Dreamforce 2011 in San Francisco laid bare a very apparent reality— “social” as commonly used in “social innovation” or “social media” connotes different meanings.

Defining Social

For social innovators and social entrepreneurs “social” in this context relates to a cause or public benefit, as outlined in this definition:

social – “of or relating to human society, the interaction of the individual and the group, or the welfare of human beings as members of society.” <social institutions> (Merriam-Webster definition)

For cloud computing afficianados, “social” refers to dynamic digital, linked online content, as articulated in this definition:

social – “tending to form cooperative and interdependent relationships with others.” (Merriam-Webster definition)

So, Which Is It?

It’s both, of course. The two definitions of social share a major similarity—they both involve connecting.  In the social innovation context, is connecting with communities, the environment, the downtrodden, animal welfare, civil rights, societal ills, education, underrepresented populations, and other causes or communities.

mint leaves in glassesIn the computing context, “social” refers to connecting online, through social networks, social media, and online platforms and networks that enable online exchanges easily and in real-time. It is the ability to voice a concern or praise not on an individual basis or in a vacuum, but in a crowded room, in which you are shoulder-to-shoulder with companies, manufacturers, media, various other constituencies, and other users of the product or service.

While we may try to correct those who confuse the two popular definitions of social—in reality, it may be time to somehow reconcile the connotations and allow enable the definitions to be connected.

Social relates to cause. And in today’s society, championing a cause will effectively call for an effective social content strategy.

So the next time someone asks you, “do you mean social, or social?”

Just say yes. 

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B Corporation and Benefit Corporation: 3 Key Differences

If you are exploring signs of responsible business, you will likely come across the terms “B corporation” and “benefit corporation”…and while they may sound like synonymous buzzwords in social innovation, they are actually distinct concepts.

Here are 3 key differences to help keep them straight:

1. B Corporation is a voluntary certification.  B corporation certification recognizes companies that are purpose-driven and which create benefit for the community, the environment, and employees–as well as for shareholders. B corporation status is conferred on companies that apply with a passing score on the B Rating System and that agree to take steps to legally expand the fiduciary duty beneficiaries beyond shareholders.  The certification is granted by an advisory committee from B Lab–a non-profit organization dedication to B Corporation certification.
2. Benefit Corporation is a legal corporate structure.  You’ve likely heard of corporate structures such as a C corp or an S corp, similarly, benefit corporation is a new class of corporation that serves society and the environment, as well as shareholders. As of June 2011, four states have passed benefit corporation legislation (Maryland, Vermont, New Jersey, Virgina).
3. Becoming a Certified B Corporation is one way to meet statutory requirements for Benefit Corporation status. This is true for states that have passed benefit corporation legislation.
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