Remember the first time you saw a TV and VCR combo or the all-in-one machine that can print, copy, and fax? Or maybe the first time you were able to access the Internet on your mobile phone? It was obvious that combining these multiple functions into one device made our lives better. The new benefit corporation is today’s obvious all-in-one corporate device. Forming a benefit corporation—or working for one—allows you to earn a living while serving your community in a meaningful way.
Benefit Corporation Defined
Most people have never heard of a benefit corporation. So what is it? A benefit corporation is a legal entity that is required to create a material positive impact on society and the environment and to meet higher standards of accountability and transparency through an annual benefits report. This general legal definition is based on the Model Benefit Corporation Legislation, so expect some variations in the states that have passed such a law.
In nonlegalese, a benefit corporation is a company engaged in a win-win-win endeavor. It is a win for the company, because that company is first and foremost financially sustainable, and it is also able to make a meaningful impact on society and the environment in areas that are aligned with its core values. It is a win for the patrons or clients of the company because they are buying more than just the company’s products or services—they are also supporting a worthy cause. And it is a win for the community that benefits from the company’s commitment. Unlike the current prevailing idea that businesses should be concerned only with maximizing shareholder profit, the central idea of this model is that all stakeholders win.