Public Benefit Corporations

[Lucusfoundation]

Companies with profit-only purposes have been the rule for the XX century.

With the rise of the XXI century, we are seeing a growing number of Public Benefit Corporations (PBCs) in the US or Community Interest Companies in the UK.

By constitution, they are FOR PROFIT but they MUST have public benefit (social/environmental) impact goals or objectives and be compliant with them.
In case they don't fulfill their Public Benefit Statements, they can get sued and fined both by clients as shareholders in the same way they can get sued if they DON'T address the PROFIT purposes.

The goal is to create a purpose based capitalism where profits and sustainable growth both socially as environmentally are achieved.

Examples of PBCs are:
Patagonia: One of the biggest clothing brands in the world, that address environmental issues.
Grameen Bank: One of the biggest and most profitable banks in the world, that address social issues.
Triodos Bank: One of the biggest and most profitable banks in Europe, that address social issues.
Kickstarter: One of the biggest fundraising/crowdfunding platforms.
Etsy: One of the biggest e-commerce and public (Gone through IPO) platforms.


Do you believe they are important to build a sustainable economy? Yes? No? Why?

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[crwth]

I think it has been still about profit with the shareholders. The traditional corporations were built to have maximized profits and also dependent on what the government stated/signed in that public benefit. It has always been to seek profits whether it's private or public entities.

I think they are essential to the economy on the fact that it serves the public and benefitted by the public. Additional work can also be generated, employing those who don't have a job.

[Hydrogen]

I think the concept of zero profit is founded upon legal loopholes and public misinformation.

There are many "zero profit" charities, religious enterprises and business organizations whose founders are millionaires / billionaires. I don't think there are many in the world who would be happy investing virtually all of their precious time and energy into something without being rewarded for it. The idea that large private enterprises are "working for free" for the "public benefit" and not being monetarily rewarded in the process is more a marketing campaign than something a person is likely to encounter in the real world imo.

This observation holds true not only for capitalism but socialism as well. People all over the world generally want to be paid and have something to show for their efforts.

Perhaps an exception to this rule may be found in volunteer efforts like doctors without borders as well as humanitarian or environmental activism like greenpeace which are manned by volunteers to a good degree. Everyone else wants to get paid.

[romero121]

End of the day everyone expect something for the efforts put forth to support development of a system. As in the Opening Thread very few companies operate as public benefit corporations. This is purely possible with the support from governments and other organizations that have got financial freedom earning big revenue from the public who are the key people for any success. As in the above quote volunteering falls under this and this isn't found in large number these days as the mentality of humans have shrunk.

[Lucusfoundation]

I think the concept of zero profit is founded upon legal loopholes and public misinformation.

There are many "zero profit" charities, religious enterprises and business organizations whose founders are millionaires / billionaires. I don't think there are many in the world who would be happy investing virtually all of their precious time and energy into something without being rewarded for it. The idea that large private enterprises are "working for free" for the "public benefit" and not being monetarily rewarded in the process is more a marketing campaign than something a person is likely to encounter in the real world imo.

This observation holds true not only for capitalism but socialism as well. People all over the world generally want to be paid and have something to show for their efforts.

Perhaps an exception to this rule may be found in volunteer efforts like doctors without borders as well as humanitarian or environmental activism like greenpeace which are manned by volunteers to a good degree. Everyone else wants to get paid.

PBCs are not zero profit businesses.

They are businesses that by constitution seek both for profit as for social/environmental impact.

Patagonia is one of the biggest, most profitable clothing companies in the world and they are a PBC.

Grameen bank is one of the biggest, most profitable and with highest payback rate bank in the world and its a PBC.

It's important that we don't confuse a PBC with a not for profit or NGO.

PBCs MUST seek for profit AND commit to positive change/impact.

End of the day everyone expect something for the efforts put forth to support development of a system. As in the Opening Thread very few companies operate as public benefit corporations. This is purely possible with the support from governments and other organizations that have got financial freedom earning big revenue from the public who are the key people for any success. As in the above quote volunteering falls under this and this isn't found in large number these days as the mentality of humans have shrunk.

Same as above

[hugeblack]

Do you believe they are important to build a sustainable economy? Yes? No? Why?

There is no such thing as zero-profit or profit-only businesses, but everyone tries to make gains using glamorous slogans such as community development, renewable resources, the ozone layer, and other things.
Cooperative companies create for benefit and benefit.
I believe that the personal motivations towards issues we are experiencing are stronger than the companies' offers or innovative ideas.

[mrdeposit]

Governments themselves instilled us that not thinking other things than earnings, the money is everything, and now I do not think anything will change about public benefit. Because capitalism is here for it and wants it from us. What do you expect from people who kills seal and rhino for money today? 

[moynul2050]

Governments themselves instilled us that not thinking other things than earnings, the money is everything, and now I do not think anything will change about public benefit. Because capitalism is here for it and wants it from us. What do you expect from people who kills seal and rhino for money today? 

You mentioned that income is everything and money is the thing you are most looking for. then how do you think about the economic sustainability intended by the OP?
do you agree that it must still be done?

[Jating]

I'm not sure about the impact in the economy as well, I think there might be cases that PBC has somewhat has a positive effect, but its not that huge, perhaps.

I read that Delaware is a good use case as they are more friendly to PBC's, but I can't find any study that says the impact is drastic, so for now we don't have any data to gauge, or if there are data, if might be too small at PBC is still in its infancy, I believed.

[BitBustah]

A lot of these "non profits" are still scams because they give themselves millions in salary and use very little of the actual funds for charity.  They are quick to pull on people's heartstrings.  We have many psychopaths running companies like this.

[Lucusfoundation]

A lot of these "non profits" are still scams because they give themselves millions in salary and use very little of the actual funds for charity.  They are quick to pull on people's heartstrings.  We have many psychopaths running companies like this.

BitBustah, thanks for the reply!

A correction must be made, we're not talking about non profits, none of the mentioned companies are non profits and this is not a non profit scheme.

They are for profit for impact businesses.

Patagonia is not a non profit, Kickstarter is not a non profit, Etsy is not a non profit, etc.

They are all for profit for purpose companies that have both profit as impact goals at their business core.

Do we need more of these in the economy? Yes? No? Why?

[bangkit tri]

Governments themselves instilled us that not thinking other things than earnings, the money is everything, and now I do not think anything will change about public benefit. Because capitalism is here for it and wants it from us. What do you expect from people who kills seal and rhino for money today? 

You mentioned that income is everything and money is the thing you are most looking for. then how do you think about the economic sustainability intended by the OP?
do you agree that it must still be done?

of course that is not included in logic it can be abandoned. because it is certainly fraudulent, where the tip ends scam. therefore we must be careful to determine the steps. because the business can run continuously is the main thing

[dothebeats]

Do you believe they are important to build a sustainable economy? Yes? No? Why?

Yes, considering that this world is trying to slip up on chaos and disarray everyday, we need more companies that not only take profits for their own benefit but also give back to the people and the environment as well. There really isn't much you can do about money when you have an environment with irreparable damage and people constantly making rounds spreading fear and causing trouble everywhere. It's about time that companies do something for the world, not just one-time charity works and fund raising events that would only benefit a handful of people with short-term effects. We need more of these PCBs; economy would still grow and thrive even if companies are allocating some resources to help build a better world.

[TheCoinGrabber]

Wait, sued? This is the first time I've heard about PBCs. Not a thing in my country I suppose. I've heard about Patagonia before and their environmental advocacy but I had no idea that they are compelled by law to pursue that.

This is interesting nonetheless though I don't think it can apply to most type of businesses.

[Supercrypt]

I think they do serve a proper purpose to the world, they are not the norm and neither they will ever be but they are definitely a new thing people tend to like. Look at things like gofundme as well, they are basically making money off other peoples misery but they are still needed and loved because at least it gives a reason for us to donate directly instead of using a charity.

Basically all I am saying is they are not a "must" in business but they are getting their place in the world as a needed thing. I do not see them get any bigger and they are definitely good to have category but its just not enough for a business to be a billion dollar business. Something like instagram that barely makes money can go for billions of dollars on a startup exit while kickstarter can't because it requires to trust for people to keep on funding stuff.

[bdlflt]

Patagonia is a great example of what PBC's can be and accomplish, but very few companies (and founders) are as successful for profits and the stated benefit.

One aspect here that I believe will be impactful but is hard to measure is how this type of signal - being a Public Benefit Corp instead of a standard S Corp or C Corp - can impact employee productivity. For one, it should make it very clear, from the top, what are some of the additional goals of the company beyond profit, and this can help in recruiting like-minded individuals and provide additional intrinsic motivation for them, especially if it's a grand goal like Patagonia's environmental aims. The passion a potential candidate would have for the stated goal could be the difference-maker if that candidate is trying to choose between multiple companies/job offers, and that type of selection from an employee I believe will improve their productivity at their chosen company (I chose this over that, so I'm going to try to confirm I made the right choice by working harder and believing I'm enjoying my work more).

There are other nuances at play too, but having the benefit codified in this manner I believe will help overall productivity.

[merchantofzeny]

We've been talking about benefits to the public but is there any benefit for the shareholders in addition to what they might have got from being in a regular corporation? I tried looking up the subject but can't seem to find any, either I must have missed something or this is because this is uncommon and not usually written about. I'm assuming there's a perk for going through the trouble. Maybe additional government assistance?

[Lucusfoundation]

Do you believe they are important to build a sustainable economy? Yes? No? Why?

Yes, considering that this world is trying to slip up on chaos and disarray everyday, we need more companies that not only take profits for their own benefit but also give back to the people and the environment as well. There really isn't much you can do about money when you have an environment with irreparable damage and people constantly making rounds spreading fear and causing trouble everywhere. It's about time that companies do something for the world, not just one-time charity works and fund raising events that would only benefit a handful of people with short-term effects. We need more of these PCBs; economy would still grow and thrive even if companies are allocating some resources to help build a better world.

Thanks for the reply Dothebeats.

Following your line, how do you think we could bring this approach you are talking about to the industry? Is it necessary for our sector? Yes? No? Why?

Wait, sued? This is the first time I've heard about PBCs. Not a thing in my country I suppose. I've heard about Patagonia before and their environmental advocacy but I had no idea that they are compelled by law to pursue that.

This is interesting nonetheless though I don't think it can apply to most type of businesses.

Thanks TheCoinGrabber for your answer.
Yes, sued indeed. The same way a normal C-Corp can get sued if they start misusing the money, which is not good according to for profit purposes.
The PBCs have a great PRO, the intrinsic value they provide to their customers and partners.
But they have a downside; they need to attend for profit and for purpose goals.

Patagonia is a great example of what PBC's can be and accomplish, but very few companies (and founders) are as successful for profits and the stated benefit.

One aspect here that I believe will be impactful but is hard to measure is how this type of signal - being a Public Benefit Corp instead of a standard S Corp or C Corp - can impact employee productivity. For one, it should make it very clear, from the top, what are some of the additional goals of the company beyond profit, and this can help in recruiting like-minded individuals and provide additional intrinsic motivation for them, especially if it's a grand goal like Patagonia's environmental aims. The passion a potential candidate would have for the stated goal could be the difference-maker if that candidate is trying to choose between multiple companies/job offers, and that type of selection from an employee I believe will improve their productivity at their chosen company (I chose this over that, so I'm going to try to confirm I made the right choice by working harder and believing I'm enjoying my work more).

There are other nuances at play too, but having the benefit codified in this manner I believe will help overall productivity.

Thank you Bdlflt for your answer.
Indeed Patagonia is an incredible example of what this kind of entreprises/corporations can achieve.
Following in the line of your argumentation, do you believe this like something necessary or that it should be taken into consideration amongst the crypto space? If yes, how do you imagine it and why do you think it's important? If no, Why?

We've been talking about benefits to the public but is there any benefit for the shareholders in addition to what they might have got from being in a regular corporation? I tried looking up the subject but can't seem to find any, either I must have missed something or this is because this is uncommon and not usually written about. I'm assuming there's a perk for going through the trouble. Maybe additional government assistance?

Thanks Merchantofzeny for the reply.
It's sad or weird, you put the name, but Public Benefit Corporations get no type of special benefit. They stand under the same regulations and taxations as normal C-corps, with the only difference that they have impact purposes at the core of their business which they need to attend. This is not a minor detail as if normal C-Corps took this kind of approach, they could get sued by stakeholders for going against the for profit purposes.

The incentive for investors is nothing more than create a more sustainable value and bring real benefits to future generations and the environment. What is money for if to be spent in ethic, money making but also impact creating businesses? There's a whole movement of for purpose/philanthropic/impact investors movement.
People are tired of just having money, they want to create real change in the world. It's the ultimate way to feel like you're actually doing something for humanity.

Let's not even talk about the new generations starting from Millenials!

[gantez]

Unfortunately, I don't seem to understand vividly what OP means but from response, I think we are talking about social benefits from corporations to locals if I'm correct.

In other words, I would briefly submit that it is nice for corporatios to perform their duties to locals as signed in the memorandum of understanding (MOU).

[MakeMoneyBtc]

I think it's absolutely normal for any company to seek for profits as high as possible because thats in the first place why most people open businesses, but in the same time also aim to help the environment to grow and modernize. Also this kind of companies need to create as many work places as possible to make sure they are helping the community even more while their profits grow.