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(B)enefit Corporation West Coast Forum

On April 27, 2012 San Francisco University and B Lab hosted the (B)enefit Corporations West Coast Forum. It was a day of seminars, talks, and networking intended to connect academia with social entrepreneurs, and to provide an overview of the benefit corporation movement.

One of the interesting panel discussions featured three social entrepreneurs who actively pursue triple bottom line results in their companies. It was moderated by San Francisco-based B Lab Director of Business Development, Dermot Hikisch.

Here is a rundown of the speakers and a few of their key points.

Mike Hannigan, President of Give Something Back

Give Something Back (GSB) is the largest business to business office supplier in California, and has been running for around 20 years. What makes the business socially entrepreneurial is that the company pays competitive wages, but invests 100% of its profits to community non-profits.

Hannigan reiterated that the community was the key stakeholder in his company, which is a registered B corporation. (Note: a point of confusion is b corporation v. benefit corporation. They aren’t the same thing! Learn about the differences here). He noted that when the company was launched two decades ago, it represented a new and novel way of doing businesses, but that he is noticing more and more new companies being started with social mission in mind.

Benefit corporation symposium 3He also underscored the concept that his business has been successful because, at its core, it has a strong business model and can beat out its competition. In fulfilling the company’s vision to support the community and environment, employees receive competitive wages and full health benefits.

Hannigan outlined the democratic process the company engages in to decide on where to redistribute profits within the community. GSB polls their 10,000+ customers and clients to decide on the causes and organizations to support.

Kirsten Saenz Tobey, Founder and CEO of Revolution Foods

If the audience wasn’t already wowed by the history, and operations of Give Something Back—Kirsten Saenz Toby’s story about how and why she started Revolution Foods surely inspired the room.

Tobey started the company six years ago after to change the way kids eat at school and with the vision of fundamentally changing the relationship between food and kids.

She outlined her company’s founding value with simplicity: food should be real. Tobey and her team found ways to replace processed foods (with numerous additives and preservatives, high salt content, and too many grams of sugar) with healthy, nourishing alternatives. And they found ways to mass produce and deliver these healthy meals to local schools on a daily basis.

Tobey also spoke about honoring and respecting the workforce, and shared that in addition to providing full health benefits, her business model makes each employee part-owner of the company.

As they say, the proof is in the pudding, or in this case maybe in the fruit and yogurt parfait. The company has grown fast, very fast. Revolution Foods has gone from preparing and delivering 500 meals per day in 2006 to 120,000 meals per day in 2011. And, it is expanding to eight different regions across the country.


Revolution Foods certified as a b corporation (not the same as a benefit corporation) in 2011. Tobey spoke about the certification process, saying that it was valuable in outlining a roadmap for how her company wanted to grow, expand, and operate. She mentioned that as a social entrepreneur, she has often found it her role to educate potential investors about what b corporations are and what the triple bottom line entails.

In answering an audience question about the future of Revolution Foods, she didn’t rule out an exit strategy such as an intial public offering (IPO) or acquisition by a larger company.

Vincent Siciliano, President and CEO of New Resource Bank

Turning to a banking state of mind, the third panelist Vincent Siciliano of New Resource Bank opened his presentation by asking if we knew where our money “spends the night.” He spoke about his company’s goal of ensuring that every dollar of depositor’s funding is invested in building a sustainable community.

Founded in 2006, New Resource Bank has aimed to bring new resources and create new opportunities for sustainable business. Siciliano mentioned that the bank became a certified B Corporation in 2010.

He expanded on the ways his bank evaluates impact for its stakeholders, mentioning a client sustainability assessment that identifies learners, achievers, leaders, and champions in sustainability. New Resource Bank actively practices slow banking because it does not consciously seek an exit strategy, but instead focuses on long term growth and reach, franchising, and creating lasting economic impact in communities.

Answering questions from the audience, Siciliano mentioned foundations as an emerging source of funding social entrepreneurs, in addition to VC funding and crowd sourced funding. For example, Kellogg Foundation became an equity investor in Revolution Foods.

When asked about the academic community’s role in the (b)enefit corporation movement, Siciliano reiterated the need for impact metrics to support data-driven decision-making.

After the passage of benefit corporation legislation in big-hitter states such as California and New York, you may wonder what’s been happening with the policy momentum.Well, the quick update is that it has been forging ahead to new regions and new states.

Lousiana and Illinois, One Step Away

Eric Trojian, Director of B Lab Policy, announced today via social media that benefit corporation legislation passed in both Illinois and Louisiana. As with the other states, this means that it is now bound to the governors of those states for final signing and admission into state law.

You can learn more about the policy and law surrounding benefit corporation legislation on benefitcorp.net and find out the state-by-state breakdown.

Moving Forward in North Carolina Too

Trojian also provided a status update on benefit corporation legislation in North Carolina. There, the bill has passed the House Commerce Committee, with its next stop being the House floor. If it passes vote there, it is on track for approval from the governor.

Stay tuned for more developments on the newly minted benefit corporation law in LA and IL!

A Look at Past Legislation

Here are a few links to help put the legislation process in context:

Carolyn Kaster / Associated Press / April 6, 2012, credit: latimes.com
Carolyn Kaster / Associated Press / April 6, 2012, credit: latimes.com

On Thursday (4/5/12) President Obama signed into law groundbreaking crowdfunding legislation that would open up investment to start-ups to anyone—not just accredited investors.

The bill reached his desk after passing with an overwhelming majority in the U.S. Senate in late March.

The news is huge and Jenny Kassan–President of Community Ventures and Co-Founder of Sustainable Economies Law Center (SELC) had this to say in a recent HuffingtonPost article, “The legislation is remarkable, as it (rightly) reverses more than 90 years of restrictions on raising capital at the grass-roots level.”

Kassan advised student volunteers of SELC when they filed a petition with the Securities and Exchange Commission in 2010 requesting an exemption to the archaic rules that allowed only accredited investors to invest in start-up ventures.

The organization’s perseverance and momentum as key politicians from both sides of the spectrum rallied behind federal legislation changing the existing law.

I had a chance to talk to Jenny about the legislation and her role in the new law in November 2011 and was impressed with her knowledge of the history of the law surrounding crowd sourced investment and her knowledge and familiarity with the bills.

It’s an exciting place to be for social entrepreneurs…with great potential ahead.

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.

 

With the U.S. Senate’s passage of a crowdfunding bill (CROWDFUND Act) that served to amend the House’s parallel bill (JOBS Act) this week, there are a number of insightful articles, blog posts, and online resources discussing the crowdfunding bill and its implications. Here’s a sampling:

  1. Senate Passes Brown-Merkley Bipartisan Crowdfunding Bill (Sen. Scott Brown)
  2. Crowdfunding Bill Passes in U.S. Senate, 73-26 (Innov8Social)
  3. U.S. Senate Votes in Favor of Crowdfunding! (StartUpExemption)
  4. Crowdfund Act (S.2190) (crowdsourcing.org)
  5. Bipartisanship, new businesses and new jobs, with a little help from your friends (Google Public Policy Blog)
  6. Soon Even Your Mom Can Invest: Senate Passes Crowdfunding Bill 73-26 (With Protections) (TechCrunch)
  7. Senate Passes Start-Ups Bill, With Amendments (New York Times)
  8. US Senate passes crowdfunding bill to allow Kickstarter-style investing (TheVerge)
  9. Tech Startups in Line to Benefit from Senate Backed Crowdfunding Bill (PR Newswire)
  10. The legitimate goals — and overblown claims — of the JOBS Act (Washington Post)
  11. Senator Brown’s Crowdfunding Legislation Passes as Part of the JOBS Act, Paving the Way for Increased Entrepreneurship (SF Gate)
  12. How Will the JOBS Act Affect Small Business? (Reuters)
  13. U.S. Entrepreneurs Need Crowdfunding To Create 1.5 Million Jobs (HULIQ)
Feel free to add any others that you have come across in the comments below.
shift forwardThe U.S. Senate passed the CROWDFUND Act, a bill allowing average citizens the ability to invest modest amounts in emerging start-ups, by a vote of 73-26 this past Thursday this (3/22/12).We talked about this bill in earlier posts “What is Crowdfunding?“and “Crowdfunding Bill Goes to the U.S. Senate” on Innov8Social. Those posts outlined the concept of crowdfunding for investment, versus for donation (as online platforms such as Kickstarter successfully facilitate).Under existing law, the SEC only allows accredited investors to easily invest in start-ups. The U.S. House of Representatives passed a version of the crowdfunding bill in December 2011 and again in March 2012. The House’s version is named Jumpstart Our Business Startups–tidily referred to as the JOBS Act. And now the Senate has responded with passage of the CROWDFUND Act, which serves as an amendment to the JOBS Act.

A look at the CROWDFUND Act

Key features of the U.S. Senate’s CROWDFUND Act include:

  • Entrepreneurs can raise up to $1M annually through an SEC-registered crowdfunding portal.
  • Individuals earning less than $100K can invest the greater of $2K or 5% of their income. Those earning more than $100K can invest the greater of $100K or 10%.
  • Crowdfunding portals must provide investor protection, including investor education about risks related to small issuers and liquidity.

Crowdfunding for Investment, the Social Entrepreneur’s New Frontier

It is hard to even begin to assess the potential impact of citizen investment in emerging companies. And, for social innovators, it is an exciting new juncture. We have talked in the past about citizens’ abilities to ‘decide with their wallets’ through buying from socially responsible companies and outlining new policy an legislation that supports social entrepreneurs. This new turn enabling tangible investment in new companies only underscores this concept. It can make each of us impact investors, seeking both financial and social return on our small investments.

Social entrepreneurs, it’s time to get in the know about the specifics of this legislation and become poised to act if it passes and is signed into law by President Obama.

As they say, shift happens. And sometimes, we shift + forward.

Forbes releases a number of enticing lists each year. Popular among them are Forbes 400 (the 400 wealthiest Americans), World’s Billionaires, Celebrity 100, and the Most Powerful People list.  Intriguing individuals, scintillating celebrities, and powerful leaders top the lists, which tabulate based on money, power, and influence.Social innovation, outlier or game-changer? A seeming outlier in this assessment is social innovation—which looks at impact, social accountability, social entrepreneurship, and social change. Well, with the release of their newest list, it looks like Forbes may see social innovation as far more than an outlier standing in the distance.

forbes.com

With ‘Impact 30‘–the first list of it’s kind ever published by Forbes’ in its 94-year history, one may even say that the publication sees social innovators as center field disrupters, team-players, and game-changers.

A look at the team behind Forbes’ Impact 30

Forbes worked with social innovation luminaries such as Ashoka’s Bill Drayton, Nonprofit Finance Fund’s Antony Bugg-Levine, MIT Poverty Action Lab, and ImpactAssets’ Jed Emerson to identify innovators leading the way or forging the path in health, innovative education, impact investment, clean energy, sustainable food production, and social innovation policy.

30 social innovators changing the world, a preview

The list features 30 individuals/groups engaged in social entrepreneurship. Here are a few of the organizations represented in the list.
You can find the full list here.
New B-eginnings
The list represents new beginnings. For Forbes, it marks a beginning of recognizing the emerging field of social innovation alongside traditional sectors of business, finance, and celebrity. For social innovators, the list is a beginning, serving as an introduction and handshake (or high-five) to new consumers, new financiers, and new forms of publicity.
And for policy, legal structure, and business organization supporting and encouraging social innovation, the list not only features the founders of B Lab (Jay Coen Gilbert, Bart Houlahan and Andrew Kassoy) but also recognizes a number of companies that have adopted the “B corporation” certification and have pioneered triple bottom line accounting methods (i.e. GIIRS).
Here are the B corps that were recognized in Forbes’ Impact 30 list:
Special discount from Back to the Roots
Having met the founders of Back to the Roots at the SF Green Festival 2011, I was immediately struck by the social innovation concept and the follow-through of the company’s dedicated founders.
To help Innov8Social celebrate our first 6 months, Back to the Roots is generously offering readers a 10% discount on their gourmet mushroom kits. Curious about how coffee grounds can yield up to 1 1/2 pounds of edible mushrooms in 10 days? Check out this fascinating 19 second time-lapse video….
Get the code on the Innov8Social Facebook pageYou can go to the Innov8Social Facebook page to find out the coupon code.
I had the pleasure of meeting and introducing Alejandro Velez and Nikhil Arora from Back to the Roots when they spoke at Sustainable Home & Organic Gardening stage at the 2011 Green Festival in San Francisco.  And while we worked through a few AV issues before they presented, I looked around to see the audience filling quickly. By the time we started the session I saw every seat filled with tens of people standing or sitting in the aisles to catch the action.I hadn’t heard about their adventures in mushroom farming which I soon came to see put me in a super-minority. As they talked the audience sat in close attention, clapping, laughing, and oohing with delight at their story, their journey, and their amazing and innovative product.Still Wondering, What is Social Innovation?It’s been 6 months since Innov8Social launched and my favorite question to answer (which also happens to be the most frequently asked one) still is so, what is social innovation again?

You can read a post about it here, but you see it in action below. Nikhil and Alejandro’s journey is the shiny example of how social innovation can reuse waste, how gardening and food production can be local, and how social cause can find an entrepreneurial outlet. It is not the story of every social enterprise or social innovator, but it showcases the untapped potential of connecting cause with business.

And as Nikhil and Alejandro emphasize below, you have to have the courage to ask the the unasked questions first….

The Courage to Ask: Alejandro Velez and Nikhil Arora speak at TEDxYSE 

Alejandro Velez and Nikhil Arora are the founders of Back to the Roots. This is their presentation at TEDxYSE:Unleashing Young Social Entrepreneurs on November 13th, 2010

Location, location, location. It is a key factor in deciding where to live, work, and play. And it can also be a telling indicator of where to launch.Introducing: Opportunity Scores by Opportunity IndexHuffington Post overviewed a new tool that enables you to assess the potential of any geographic area in the U.S. based on factors such as education, median income, poverty level, unemployment, and availability of affordable housing. These opportunity scores, part of the Opportunity Index project by Opportunity Nation, give an apples-to-apples comparison of counties and states.



How Can the Opportunity Index Be Useful to Social Innovators?

Understanding opportunity scores can help social innovators and social entrepreneurs decide where to launch, where to expand, and where to engage,  in surprising ways. Social ventures rely on business acumen and compelling social cause and arguably, launching in a place that is known for its economic and social stability and mobility could offer advantage at crucial stages of a social enterprise’s growth and development.

Alternatively, the Index can also help identify communities and region that could benefit most from social enterprise. Not the top-scorers, but the cities, counties, and states that are struggling. Knowing cities that have scored high gives us a learning tool to compare and contrast what has helped these cities succeed and how social innovation and social enterprise and can help rebuild and uplift cities with the greatest need, and the greatest potential.

Perfect 5’s for Opportunity: Method and Findings

The granularity of the information in the Opportunity Index extends to the county level. To find cities, I identified top-performing counties and selected a city within that county for the list. These cities were usually the largest cities or centers for local government.

I was anticipating finding a number of large cities along with medium-sized suburbs. Interestingly, the vast majority of perfect scores went to smaller towns, cities, and townships. These seemly tight-knit communities appear to have been able to weather, withstand, and in some cases, even flourish in the economic downturn–according to the success criteria of the Index.

37 Cities With Top Opportunity Scores

So here they are, in no particular order. Thirty-seven cities that scored an overall perfect 5 for opportunity based on indicators including unemployment, affordable housing, median income, education, and poverty.

  1. Quincy, Massachusetts (Norfolk County)
  2. Edgartown, Massachussetts (Dukes County)
  3. Derry, New Hampshire (Rockingham County)
  4. Burlington, Vermont (Chittenden County)
  5. Yonkers, New York (Westchester County)
  6. Hackensack, New Jersey (Bergen County)
  7. Hempstead, New York (Nassau County)
  8. Franklin Township, New Jersey (Somerset County)
  9. Parsippany-Troy Hills, New Jersey (Morris County)
  10. Raritan Township, New Jersey (Hunterdon County)
  11. Norristown, Pennsylvania (Montgomery County)
  12. West Chester, Pennsylvania (Chester County)
  13. Columbia, Maryland (Howard County)
  14. Rockville, Maryland (Montgomery County)
  15. Ashburn, Virginia (Loudon County)
  16. Fairfax, Virginia (Fairfax County)
  17. Charlottesville, Virginia (Albemarle County)
  18. Ashland, Virginia (Hanover County)
  19. Jamestown, Virginia (James County)
  20. Cumming, Georgia (Forsyth County)
  21. Fayetteville, Georgia (Fayette County)
  22. Franklin, Tennessee (Williamson County)
  23. Delaware, Ohio (Delaware County)
  24. Troy, Michigan (Oakland County)
  25. Mequon, Wisconsin (Ozaukee County)
  26. Waukesha, Wisconsin (Waukesha County)
  27. Naperville, Illinois (DuPage County)
  28. Carmel, Indiana (Hamilton County)
  29. Fredricksburg, Texas (Gillespie County)
  30. Overland Park, Kansas (Johnson County)
  31. Castle Rock, Colorado (Douglas County)
  32. Boulder, Colorado (Boulder County)
  33. Grandby, Colorado (Grand County)
  34. Silverthorne, Colorado (Summit County)
  35. Los Alamos, New Mexico (Los Alamos County)
  36. Park City, Utah (Summit County)
  37. San Rafael, California (Marin County)