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In an article entitled, “The For-Benefit Enterprise,” published in the Harvard Business Review, November 2011 issue, Heerad Sabeti provides an excellent and very interesting overview of recent developments in the emerging “Fourth Sector” of “For-Benefit” enterprises.
As Mr. Sabeti explains, “For-Benefit Enterprise” is a term more and more commonly used to refer to a hybrid form of business enterprise — one that is organized primarily to serve a social benefit purpose, but also generate earned income.
Mr. Sabeti, a co-founder and trustee of the Harvard Business Review.
For more information about the emerging Fourth Sector, visit the
Global Impact Investing Rating System (GIIRS) Promotes Impact Investing in Socially Responsible Companies
B-Lab, an organization in Pennsylvania and New York that promotes the establishment of for-profit “Benefit Corporations” which serve social and public benefit purposes, has established a Global Impact Investing Rating System (GIIRS), which B-Lab says, “aims to drive investment capital toward impactful businesses.”
“GIIRS ratings provide investors with standardized impact metrics for an emerging asset class, helping fund the world’s leading social entrepreneurs. GIIRS ratings are like S&P ratings but for [social] impact instead of risk,” www.giirs.org.”
After a successful Beta launch in the Spring of 2011 with approximately 200 companies and 25 funds, according to the B-Lab Annual Report,
A movement has been building for more than 15 years, both in the U.S. and internationally, to establish and recognize in law a type of hybrid private, for-profit entity organized to serve a public or social benefit.
Entities of this type are referred to variously as a “Benefit Corporation,” “B Corp.,” “Social Enterprise,” “Social Business,” emerging “FourthSector” entity, or in the UK, a “Community Interest Corporation (CIC)”.
This movement has recently gained momentum in the U.S. with the passage of legislation in seven states specifically authorizing the creation of a new, separate form of corporate entity called a
On June 17, 2011, New York’s Legislature became the fifth state legislature in the nation to pass a bill authorizing a new type of corporate entity called a “Benefit Corporation.”
Under the bill, a private, for-profit business would be permitted to incorporate as a “Benefit Corporation,” with the stated corporate purpose of serving a general or specific public benefit (as defined in the bill). The Benefit Corporation is essentially a hybrid form which permits a for-profit corporation to exist for primarily public or social benefit corporate purposes (previously reserved to non-profit entities), rather than exclusively for the purpose of
Additional posts coming soon on: News & Updates on the Emerging Fourth Sector of Social Enterprise
Additional posts coming soon on: Developments in the Non-Profit Sector
Additional posts coming soon on: Corporate Social Responsibility Updates
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