Corporate Entity of the People

Corporate Entity of the People

Do you have a desire to positively impact society and the environment but luck funding? Maybe incorporating as a B Corp is the solution.

We talk a great deal about entrepreneurship here at Rich Dad. It’s because of Robert and Kim’s journey from excessive debt into the stratosphere of success that showed Lisa and I it’s not only possible, but provided a roadmap with their Choose to Be Rich product.

Implementing the lessons we learned paved the way to success first, with our Journey Healing Centers and then with our Warriors Heart addiction and treatment centers. Doing so has allowed us the opportunity to help thousands of families struggling with addiction climb out from the depths of despair into the safety and security they now enjoy.

A Little Help from... the Government?

Lisa previously wrote about a new form of corporate identity, the B Corp. To summarize, a B Corp is different from other corporate structures in the following ways:

  1. it must have a mission to positively impact society and the environment;

  2. it must have a fiduciary duty to consider all interests of its workers, communities and shareholders;

  3. and it must submit an annual report describing its performance and social and environmental efforts.

Some excellent examples of companies that have implemented this entity include Ben & Jerry’s, Kickstarter, and Hootsuite, to name a few.

Unfortunate Fad?

Bill Drayton, CEO, and founder of Ashoka Innovators, started his organization on the idea that the most effective way to promote positive social change is to invest in social entrepreneurs with big, innovative solutions.

He has been at the forefront of this movement since the 1980s. He’s seen businesses continue to find ways to collaborate with NGOs (non-government organizations) and other nonprofit organizations to leverage the benefits of capitalism.

Why?

Because citizens—people who care and take action to serve others and force needed change when necessary—are vital to the sector.

Bill discussed this important connection with citizen-sector organizations (or CSOs) in his 2009 article “ A New Alliance for Global Change for the Harvard Business Review.

Unfortunately, Bill believes the current interest will wane over time.

“...We’re in the middle of a fashion wave. They come every four to seven years. Investors see this seemingly new thing happening, and who wouldn’t want to invest in something where you make money and you’re doing good? You can point to examples of this throughout time. However, the newly discovered idea becomes ‘hot’ and ‘in,’ and then many good people come in with money. But the number of opportunities doesn’t suddenly multiply. Eventually, many of the funds dry up because they can’t find the deals. Business/social collaborations are both important and growing, but these episodic in and out tides of investors do not help.”

Even now, almost four decades after Bill saw this new cooperation emerge, there still appear to be walls separating the CSOs and business.

Is all hope lost?

Absolutely not.

The solution: social entrepreneurs. It’s social entrepreneurs that continue to bridge the CSOs and businesses they so desperately need.

(To be clear, I’m not implying that businesses don’t care about people, they very often do. In fact, many businesses take part in corporate philanthropy.)

Corporate Philanthropy

Many American companies have a storied history of giving back to their communities. In doing so, they often assist causes like the United Way or local symphonies through sponsorships, table purchases at fundraising dinners, or through employee-raised donations.

Corporate philanthropy, then, is a bit like business sending an envoy over the wall to support society.

What about your business? How can you work with social entrepreneurs to improve the lives of those around you?

If would like to learn more about social entrepreneurship, check out our contribution at WarriorsHeart.com

If you’re interested in learning more about social entrepreneurship, grab a copy of our book The Social Capitalist

Original publish date: December 09, 2019