• David E. Henninger

    I agree with Rich Cohen’s comments about the idea that somehow social enterprise is a new way to further surpress the whole scope of why we have a nonprofit sector in this country. The heart and soul of our sector comes out of a tradition of advocacy, commitment to social justice, and playing the role of society’s alter ego when it comes to creating a more equitable playing field for everyone long before the majority of voters are even aware of a given injustice.

    There are some wonderful nonprofits that utilize the ideas of social enterprise to further their mission, but the ongoing need to have government and private sector partnerships in place are just as critical as coming up with social enterprise business models in carrying out most of the critical missions in our social service delivery system. Just as “distance learning” has been a successful tool in educational circles social enterprise can be an excellent adjunct for some nonprofits to consider in their quiver of arrows.

    I agree too that the will of nonprofits to stand up and push back regarding our economic, social and political impact on the whole of this country is critical to our future. All too often I hear the comments about not wanting to offend government/public policy forums for fear that we will be cut off even more in the grant funding game flies in the face of the roots of our sector heritage.

  • robert egger

    WOW….I don’t know which is more shocking to me, Rick… that you are writing about an event that you admittedly missed, or that you are attempting to “spy in the subtext of Egger’s Twitter-reported comments” a call by me to “tell government that nonprofits don’t need as much government money as before, that there’s a new form of nonprofit—the social enterprise, profit-making hybrid—that can alleviate government of some of its funding pressures?”

    Seriously, Rick….I admire you…I dig your keen eye and unflinching call outs…but suggesting subtext, based on tweets made during two different keynote addresses at the Donors Forum gatherings is sloppy reporting (at best) and as silly as Bush suggesting that he could look into Putin’s soul.

    For you readers wondering about this…go to #501CT (the hashtag for the event), or look at my twitter feed @RobertEgger and tell me where you can find me calling for an end to government funding or that social enterprise can (or should) replace nonprofits!

    Dear Lord, Dude….I’ve worked for 24 years in the basement of a shelter trying to insure people are fed, trained, employed and paid….do you think for a second I don’t know the role government MUST play if we are to avoid slipping back into the dark ages?!?!

    I tell you what…I’m in NYC in two weeks, speaking about the same topic at the Human Service Coalitions gathering at Baruch College. Hop on a train, listen to my ideas….THEN write about what you actually hear me say.

  • Laurel O’Sullivan, Vice President of Public Policy, Donors Forum

    Thanks, Rick, for your thoughts. We are sorry that the weather prevented you from joining us. As the association for both nonprofits and philanthropy in Illinois, Donors Forum (at whose Policy Institute and Conference Robert Egger spoke) believes the challenge facing our sector isn’t a Manichean, ‘either/or,’ choice: either traditional nonprofits deliver value and services to our communities OR hybrid organizations deliver them. We know there is more than enough need to go around to deliver the most good, and what faces us is a ‘both/and’ proposition. Both types of organizations, driven by their passion for their missions and a belief that we all connect to something outside of ourselves to improve the quality of life for our fellow man (and woman, and child), have a place within our sector to meet society’s myriad needs.

    While it is tempting to fight one another for diminishing resources, we think we should pay attention to Robert Egger’s larger point: differences between nonprofits must be set aside to see that our missions are met in the most valuable, impactful ways; that our elected officials recognize the scope and breadth of our nonprofit community; and that there is a functioning partnership between the public sector and nonprofits (both hybrid and not) that will serve the public good in a sustainable way. And while we missed having Rick at our Institute, we look forward to this continuing, and energetic, conversation.

  • Holly

    As a Policy Associate for B Lab, a nonprofit that educates people about benefit corporation (described as “B” Corporations by the author) legislation, and works to support mission driven entrepreneurs and investors, I would like to clarify a few points regarding you October 18th article on the challenges facing nonprofits.

    The first point of clarification is regarding your comment that benefit corporations do not do more good than traditional corporations. Traditional corporations are prevented from considering issues other than profit, such as society and the environment if such considerations lower profits. Benefit Corporations are a completely voluntary free market approach that gives directors the freedom to expand their corporate mission to include additional concerns that go beyond solely the maximization of profit. Benefit corporation legislation allows a company and their shareholders to commit to a mission and hold the company accountable while giving social impact investors the clarity and transparency they need to find mission driven companies in a confusing marketplace. Benefit corporations allow C Corps and S Corps to go beyond window dressing regarding their impact on society and the environment and allows them to implement actions such as buying local, paying fair wages and giving higher amounts than average to charities. In fact, rudimentary studies suggest that mission driven companies, such as benefit corporations, donate 10 times more money to nonprofit organizations than the average company.

    Second, to clarify a point of confusion in the article, B Lab, a non-profit itself, is only one of many other third party standards, approximately 12, that benefit corporations can choose to assess their annual qualitative activities. B Lab certifies mostly non-benefit corporations. To clarify, Certified B Corporation is a certification conferred by the nonprofit B Lab. Benefit corporations are the legal entity administered by the state and do not need to be certified or audited by a third party. Additionally, any company is welcome to use B Lab’s B Impact Assessment for free to improve their company’s impact on society and the environment.

    Third, your article suggests that anything not related to profit should be the purview of the nonprofit. However, this point of view only encourages companies to act irresponsibly. It also ignores the fact that equity investors are looking to invest in companies that make money while at the same time do not harm society and the environment. Benefit corporations do not interfere with nonprofits, because they attract equity investments and not philanthropic dollars sought by nonprofits. In fact, the benefit corporation structure is a great model for nonprofit hybrids where an organization has both for-profit and nonprofit components. The for-profit can be structured in a way that attracts equity investment and guarantees all, or a sizable portion of the profits, go to the nonprofit while legally protecting the for-profit arm from shareholder lawsuits. This cannot be done under a traditional corporate structure.

    In conclusion, benefit corporations do not do the work of or replace nonprofits. They are simply for-profit companies that want legal protections to consider society and the environment without fear of a shareholder lawsuit. Benefit corporations can help nonprofits through their tremendous philanthropic giving and through the availability of a new an additional form giving them more methods to sustain their overall mission.

    It is my hope that more nonprofits will look to benefit corporations, as many have already done, as a way to collaborate and improve the world we all share.