What Would Adam Smith Say?
The headline reads:
The NonProfit Quarterly’s Nonprofit Headlines goes on to report that Unilever’s Ben and Jerry’s Ice Cream Company is the first sub of a publicly traded corporation to be certified as a B corporation.
And what is a B Corporation?
The B Corporation website is quite explicit: “B Corp certification is to sustainable business what Fair Trade certification is to coffee or USDA Organic certification is to milk. B Corps are certified by the nonprofit B Lab to meet rigorous standards of social and environmental performance, accountability, and transparency.”
We learn that over 600 businesses in 8 countries have been certified, with the revenue from these corporations totaling over $4 billion. Eleven states have passed legislation giving legal status to B Corps.
Social and environmental performance? Accountability and transparency? Sounds somewhat like Charity Navigator’s standards for their rating system of nonprofit organizations.
And the Shareholders?
But where does shareholder interest come in? It still counts, although it is now joined by these other factors in defining success. B Corps voluntarily meet these high standards creating “higher quality jobs” and improving quality of life.
Taking somewhat of a shot at the other societal sectors, the B’s say: “Government and the nonprofit sector are necessary but insufficient to address society’s greatest challenges. Business, the most powerful man-made force on the planet, must create value for society, not just shareholders. Systemic challenges require systemic solutions and the B Corp movement offers a concrete, market-based and scalable solution.”
And what is behind this blasphemy?
A non-profit corporation, to confuse matters even more.
B Lab, the nonprofit, serves this movement of entrepreneurs “using the power of business to solve social and environmental problems.” The nonprofit has interrelated programs providing legal infrastructure, customers, personnel and capital.
Some big names are behind B Labs, including the omnipresent Rockefeller Foundation, Deloitte LLP, Halloran Philanthropies, The Prudential Foundation, US AID, and the B Lab co-founders, who themselves gave over $1,000,000 to start the organization.
Many of the boundary lines between for-profits and non-profits are blurring, thus confusing the roles that we in the nonprofit world hold as exclusively our turf. Should we be moving closer to this progressive for profit model as well?
This will be one of the major themes explored in the Resource Lab, and a look at the website will give a more expansive view of the related topics covered.