Non-profit organizations grew out of early social welfare roots. People driven primarily by moral beliefs fed the poor, took care of the sick, and took in orphans. These groups became more specialized and structured and eventually the non-profit organization was born from legal tax classifications. The mission was the seed and still comes first. Conversely, business is rooted in the ability to make a profit; to earn a living by providing goods and services to customers. There was even a possibility of striking it rich with the next big idea. The financial bottom line was the seed and is still the common metric by which all businesses are measured by.
Despite very different roots, business and mission have always shared a symbiotic relationship. Mission-driven organizations create desirable communities, providing medical care and hospitals, animal welfare and clean-up services, safety nets and religion. Ultimately, non-profits lay the foundation for a dependable workforce for employers. Businesses in turn provide financial support, in-kind donations, and leadership for non-profit governing boards.
Over the years the boundaries between business and mission have blurred. Businesses have increasingly integrated sustainability into their models and more and more non-profits are being managed by experienced business leaders. More recently, the intermingling has spurred hybrids, creating for-profit organizations with a mission.
Social enterprises have been cropping up for years, but have only recently become recognized in their ability to apply business strategies to tackle social and environmental challenges in just the past few years. The low-profit limited liability corporation, or "L3C", was first created out of Vermont legislation in 2008. Nine states has since adopted similar legislation, allowing business with a purpose to take advantage of flexible LLC laws while also qualifying for "program-related investments" from private foundations.
The benefit corporation, or "B-corp", was born in 2010 when Maryland first passed legislation recognizing this pairing of business with community impact. Unlike traditional business, benefit corporations have a formal purpose to have a "material positive impact" on society and the environment. Their hands are not tied to make decisions that deliver the greatest financial return for the shareholder. As of this writing, 19 states have passed B-corp legislation.
These new models represent giant steps toward solving pressing social challenges...if we work together. Because regardless of how smart, creative or passionate any one of us is, together we create synergy that takes advantage of diverse strengths, expertise, and experience.
Share your best practices. Start a think tank on a shared goal. Reach out to potential partners. Invite new, crazy ideas. Just don't stick your head in the sand and plow forward with the ways you've always done things, or conversely blaze what you think is a brand new trail based out of entrepreneurial ego. Cause collaboration and innovation has never been more accessible or fruitful.