Mission Alignment Working Group
Profit-with-Purpose
Businesses
Working Group Chair: Cliff Prior [email protected] www.unltd.org.uk
B Lab UK: James Perry [email protected]
www.bcorporation.uk
1
The most relevant
Taskforce recommendations
7. Give profit-with-purpose businesses the ability
to lock-in mission:
governments to provide appropriate legal forms or
provisions for entrepreneurs & investors who wish to
secure social mission into future
Taskforce recommendations as Market Steward:
• Create legal forms or regulations that protect the
social mission of impact-driven organisations
• Relax regulations that prevent social sector
organisations from generating revenues
2
What’s the problem to solve?
What’s the opportunity to tap?
•
•
•
•
Many social start ups, but so few achieve scale
Critical bottlenecks at the early growth stages
High risk: equity investment is relevant
Asset/profit locked social ventures eg non-profits and
social enterprises cannot easily take equity investment
• There is a huge wave of entrepreneurs who want to go
social: eg 1 in 5 of all aspiring to startup in the UK
• Early stage “angel” investors are prepared to invest in
social ventures if they can see a realistic return
• Solution: a model for social ventures which
distribute profit and lock in social mission in other
ways: profit with purpose business
3
Characteristics that define a
profit-with-purpose business
A Profit-with-Purpose Business is
one that seeks, commits to, creates
and shows social impact
4
Activities in the UK
• Using the momentum: building confidence
in the idea of profit-with-purpose business
• Standardising legals: model Articles for
profit-with-purpose companies limited by
shares
• Improved regulation and tax: Community
Interest Company rules relaxed; new Social
Investment Tax Relief
• Reporting: B Lab UK launching September
• UK exemplars: UnLtd’s Big Venture
Challenge has supported PWP business
• Case studies: success stories to achieve
confidence of all stakeholders
Oomph! Wellness:
498 care staff trained
16,100 classes delivered
278,200 attendances
98% of staff recommend
Significant or very
significant impact on:
- physical mobility 59%
- social interaction 81%
- mental stimulation 71%
Quality of life up 10%
A profit with purpose
business for improving
lives of older people
£300k equity investment
Telefonica’s Wayra UnLtd tech accelerator for social impact has outperformed all
12 of their commercial accelerators in terms of investment, mainly through profit
with purpose business candidates.
5
Other country activities
• Canada, France, Italy, Japan: legislative changes under
underway, allowing for social & enterprise combinations
• USA: continuing growth in number of States allowing Benefit
Corporations
• Germany: growing interest, Award for exemplar, NAB
• EU: EUSEF standard for social investment funds,
GECES work on social impact reporting
• B Corp expansion: into Europe, Australia, Canada, Africa
• Informing the lawyers: published legal analysis of 8 countries
by Orrick; outreach to lawyers through
Thomson Reuters Foundation, raising awareness
• Beyond G7: UnLtd provided materials and support to the 52
countries with GSEN members.
• Examples of progress in Australia, Taiwan, Thailand,
6
Colombia, Chile …
The Challenges and Solutions
• Cultural challenges: “profit and purpose don’t mix”
• Vested interest challenges: “we don’t need this”
• Sceptical challenges: “it won’t work” “there will be
mission drift” “it just slows down the entrepreneurs”
• Awareness challenges: it has taken decades for social
enterprise to be recognised even in pioneer countries
• Connect to population level interest: start from where
the entrepreneurs and investors are, engage those
already doing it, build a movement
• Demonstrate the reality: focus on real enterprises, real
impact, showcase their work, don’t focus on the plumbing
• Create the permissions: legal permission, accreditation
7
G8 Social Impact Investment Taskforce
The UK context: Where’s the social business frontier?
8
What is a B Corporation?
Before
Regular Business
No Asset Lock
No Social Mission
No Social Performance Test
Social Sector Organisations
Asset Lock
Social Mission Lock
No Social Performance Test
global movement of people using business as a force for good
What is a B Corporation?
Before
Regular Business
No Asset Lock
No Social Mission
No Social Performance Test
Social Sector Organisations
Asset Lock
Social Mission Lock
No Social Performance Test
After
Regular Business
No Asset Lock
No Social Mission
No Social Performance Test
B Corporations
No Asset Lock
Social Mission Lock
Social Performance Test
Social Sector Organisations
Asset Lock
Social Mission Lock
No Social Performance Test
global movement of people using business as a force for good
What is a B Corporation?
Before
Regular Business
No Asset Lock
No Social Mission
No Social Performance Test
Social Sector Organisations
Asset Lock
Social Mission Lock
No Social Performance Test
After
Regular Business
No Asset Lock
No Social Mission
No Social Performance Test
B Corporations
No Asset Lock
Social Mission Lock
Social Performance Test
Social Sector Organisations
Asset Lock
Social Mission Lock
No Social Performance Test
global movement of people using business as a force for good
B Corporations are a global movement
1,307 B Corporations 121 Industries 41 Countries 1 Unifying Goal
425 B Corps
(35%)
outside the
U.S.
In 2014,
more new
B Corps
outside the
U.S. than
inside
global movement of people using business as a force for good
This global movement is growing
2012
2013
2014
2014
2015
global movement of people using business as a force for good
B Corporations will launch in the UK in Sept 2015
•
The UK has a long and
distinguished history of
social businesses
•
Effort led by experienced
entrepreneurs who lead UK B
Corporations
•
Target launch September
2015 with over 50
companies
•
More demand from business
to change than capacity to
respond to this desire
global movement of people using business as a force for good
The UK will launch B Corps and pilot a ‘Mission Locked’ B Corp
•
Launch inspired by the work of the G8 Social Impact
Investment Taskforce
•
Also working with the UK National Advisory Board to pilot a
new variant, with a guardian shareholder to lock-in mission
•
Based on the concept of a Golden Share
global movement of people using business as a force for good
Building a new sector of the economy
1,307 B Corporations
121 Industries
41 Countries
1 Unifying Goal
global movement of people using business as a force for good