Sunday, June 03, 2007

Becoming a B (Corporation)

When I founded Blueprint Research & Design ten years ago, the question I asked myself, and everyone asked me was "why didn't I set it up as a nonprofit?" After all, we provide independent research and strategy advice to philanthropic foundations and individuals - all of our clients are either charitable individuals, philanthropic entities or the charitable arms of commercial enterprises.

The answer I gave then, and the one I give now, is that the company's mission - improving philanthropy - was a few steps removed from the charitable purposes that I believe nonprofits are supposed to serve. The integrity of social purpose entities depends on their being able to show direct benefit to the public. Blueprint's contributions benefit those who benefit the public - a distance I felt was too great to fit comfortably into the nonprofit classification.

I wished then, and now, for a structural option besides the dichotomous "commercial or nonprofit" structure; for a structure that would recognize our commercial nature AND our public benefit.

Today I got my wish. On Friday, June 1, the B Corporation was born. This is a new corporate designation for "purpose-driven [companies that] create benefit for all stakeholders, not just shareholders." I've been waiting and watching for B Corporations to become real for about a year now, since I first learned of the effort from a colleague who manages wealth for one of the world's best known tech-wealthy families. I heard again about the concept from folks at GoodCapital - and got the scoop on the launch at the Investors Circle conference in late May.

I just completed the B Corporation Survey. It asks detailed questions about Blueprint's goods and services, our means of developing and delivering them, the company's governance structure, employee benefits, stakeholder information, environmental commitments, and inclusive reach to under served populations.

The questions are provocative. For example, as a leaseholder can we do more to improve the environmental sustainability of our building? My staff worked with the building managers to improve recycling options, what more can we do since we don't own or manage the facility? Come next workweek, maybe we should try to meet with the building managers and the other tenants to discuss this.

Here's another one: my company is small, with 10 employees. Four members of our staff identify as members of racial/ethnic minority groups; seven are women, two identify as gay. By the standards of the survey this is pretty diverse. But we know we don't reflect the ethnic and racial diversity of our home town - San Francisco (or the state or the nation). We can do more, we know it, we try, and we can use help.

Do we provide a public benefit? To all shareholders in Blueprint's work? This was the key question I asked ten years ago and still ask today. Our work is designed to help philanthropists make more informed and effective decisions with all of their capital (financial, human, intellectual, physical, reputational, and networked). By rough calculation, Blueprint's guidance has directly influenced hundreds of millions of dollars in foundation grants. Indirectly - through speeches, books, panel presentations, articles, and workshops - we have influenced the thinking of individuals and entities who oversee billions of dollars endowed for public benefit. These shareholders benefit from our work - philanthropic, clients, employees, nonprofit partners of our clients, community organizations in San Francisco (we sit on boards, volunteer our time, and give money), corporate owners. Is that broad enough? Is there a greater public benefit we can provide?

We've completed the B Corporation survey (we scored a 62.9). We've submitted papers to file as a B Corporation. We actively participate (as speakers, bloggers, and active learners) in conferences and other learning opportunities for "the Fourth Sector." We're thought leaders on philanthropic capital markets.

There are lots of things Blueprint can do independently. More exciting, there is a real force developing - a community of like-minded entities. Information and peers can be found through Business for Social Responsibility, Social Venture Network, Investors Circle, Schwab Foundation for Social Entrepreneurs,, SocialEdge, BALLE, MIXMarket,, Global Philanthropy Forum. Its exciting, welcome, and time.

No comments: