June 2013 - socentlaw


I have updated my benefit corporation state statute chart here.  A number of states (Arizona, Arkansas, Colorado, Nevada, and Oregon) have passed benefit corporation statutes recently, but those are not effective yet and therefore have not yet been included.  Washington D.C.’s statute went effective in May, and is in this version of the chart.  D.C. seemed to follow the January 26, 2012 version of the model legislation without much deviation.

Also, I added and updated some of the more recent versions of the model legislation.  The changes in the model legislation have been quite interesting to me.  The most interesting recent change was moving from a fairly detailed definition of “independence” for the third party standard provider to simply ““[d]eveloped by an entity that is not controlled by the benefit corporation.”

As always, please feel free to contact me with any suggestions or potential corrections.


The following professors will be presenting on Crowdfunding Social Enterprise at a conference hosted by Leeds School of Business at University of Colorado-Boulder and the Ewing Marion Kauffman Foundation (July 12 to 13, 2013 in Boulder, CO):

Deborah Burand (Michigan)

Steven Dean (Brooklyn)

Joan Heminway (Tennessee)

Christine Hurt (Illinois)

Haskell Murray (Regent moving to Belmont August 2013)

Dana Brakman Reiser (Brooklyn)

The panel is scheduled for 2:30 p.m. to 3:45 p.m. on July 13, 2013.  The abstract of the panel is below:

Crowdfunding and social enterprise both grow from populist roots. In the eyes of proponents, the emergent legalization of crowdfund investing in the United States (through, e.g., the 2012 enactment of the Jumpstart Our Business Startups Act) and the increasing examination and adoption of separate forms of social enterprise entity (including, e.g., Delaware’s current consideration of benefit corporation legislation) hold promise to bring the benefits of capital finance and commercial enterprise to the masses. Given the common foundations of the crowdfunding and social enterprise movements, it seems logical to consider funding social enterprise by reaching out to the crowd.  Is a marriage of the two upstart phenomena—namely, the use of crowdfunding to finance social enterprise—a match made in heaven or an ill-fated pairing? This panel features five papers, each of which explores topics at the intersection of crowdfunding (including crowdfund investing) and social enterprise as a means of teasing out some of the relevant considerations.


Robert T. Esposito’s article The Social Enterprise Revolution in Corporate Law: A Primer on Emerging Corporate Entities in Europe and the United States and the Case for the Benefit Corporation is available here.

Next month, Robert will begin his time at NYU Law as a recipient of the Jacobson Fellowship in Social Entrepreneurship.

His article is well worth reading.  The abstract is below:

Remarkably, in the face of a global recession, the social enterprise sector continued to experience extraordinary growth in both financial support and the number of newly authorized corporate entities aimed at social entrepreneurs who seek to use the power of business to simultaneously achieve profit and social or environmental benefits. This Article highlights recent developments in the social enterprise movement in Europe and the United States and focuses on the emergence of a surprisingly broad range of newly authorized corporate entities on both continents in response to the needs of social entrepreneurs. These include social cooperatives and the community interest company in Europe, as well as the L3C, the flexible purpose corporation, the social purpose corporation, and the benefit corporation in the United States. In so doing, this Article emphasizes the truly international scope of the social enterprise movement and explains the growing divergence in approaches to social enterprise between continental Europe and the United States. This Article suggests that the benefit corporation, which imposes a new duty to consider stakeholder interests, is currently the most effective vehicle through which social entrepreneurs can ensure their blended value goals are being considered and achieved. This Article concludes by responding to critiques of profit-distribution in social enterprise, making the case for the benefit corporation, and suggesting some statutory and tax reforms to further foster the social enterprise revolution.


Last month I blogged about the collaboration between students at Georgetown Law and Ashoka to prepare legal case studies of two social enterprises. The legal case studies can now be found on the Social Enterprise & Nonprofit Law Clinic’s website here (links to the case studies are about three-quarters down the page as “examples of social enterprise”). The first legal case study examines innovative capital raising models undertaken by a social enterprise that provides solar power to communities in developing countries. Topics discussed include:
• Crowdfunding
• Securities Regulation
• Joining an Accelerator

The second legal case study explores the organizational structure and governance mechanisms employed by a wind farm social enterprise that partners with communities to facilitate their direct participation in the development of renewable energy from their collective community assets. Topics discussed include:
• Anchoring Social Missions with Legal Tools
• U.K. Community Interest Companies
• Avoiding Mission Drift Through Corporate Governance
• Engaging Communities and Mobilizing Community Assets



GreenChoice Bank is a thrift institution owned by an Illinois benefit corporation and claims to be the first bank organized under a benefit corporation. Read more about this bank here and here.

In reading the profile on GreenChoice Bank, nothing much struck me as unusual for a socially-responsible business or social enterprise — it pays a living wage, health insurance premiums, includes employees in management decisions, recycles, has LEED certified buildings, offers E-statements to customers, etc. All this is becoming rather standard in the social enterprise sector. But then one particular business strategy jumped out at me — GreenChoice provides better rates to green builders that are incorporating sustainability strategies into their building methods. GreenChoice is rewarding and encouraging “doing good.” While many may claim that the benefit corporation or social enterprise in general is just about branding, it seems that GreenChoice proves that theory wrong with its rewards strategy. Indeed, many social enterprises attempt to encourage customers to “do good” but most strategies that I’ve seen do so through psychic, not tangible rewards — e.g., customers of Better World Books can feel better about buying books from a company that recycles books and donates to literacy and educational programs. But the GreenChoice strategy goes beyond psychic rewards and offers tangible rewards (i.e., better deals on small business loans). I’m interested to hear of other social enterprises that offer tangible rewards to customers or clients in return for “doing good.” Of course, trying to make the world a less polluted, healthier, and equitable world is also a pretty tangible benefit, so maybe I should cabin my inquiry to direct and immediate tangible rewards.


And another call for papers. . .

Hybrid Organizations: Origins, Strategies, Impacts and Implications

The goal of this special issue is to stimulate authors to consider the rise of hybrid organizations, the ways in which they create and track the shared value to which they aspire, and the degree to which these models are sustainable over the long term.

More info here.


Just received in my inbox. . .

DEADLINE: September 1st, 2013


November 6, 7 & 8, 2013

Our annual NYU-Stern Conference on Social Entrepreneurship is dedicated to the ongoing development of theory and research on social entrepreneurship and its impact on global communities. The aim of the two-day academic conference is to bring together scholars in social entrepreneurship to discuss emerging concepts and themes in social entrepreneurship research. Conceptual papers, research papers presenting quantitative and/or qualitative data are welcome, as well as case studies and practitioner contributions. Our previous conference can be viewed here.

Conference Themes

Here are several research suggestions that may be interesting and highly provocative, although abstracts that address other relevant and timely themes of social entrepreneurship but are not covered below are also welcome:

  • Social entrepreneurship process involving opportunity recognition and evaluation
  • Organizational forms of social enterprises
  • Challenges of scaling and measuring social impact
  • Emerging themes in social entrepreneurship education
  • Cross-cultural comparative studies in social entrepreneurship
  • Research challenges in social entrepreneurship

Abstract and Paper Submission and Review Process

Authors who wish to present their papers at the conference should submit electronically a three-page abstract (double-spaced, times new roman font, size 12) by Sunday September 1st, 2013 to the conference co-Directors, Dr. Jill Kickul, Director of the NYU-Stern Program in Social Entrepreneurship, and Dr. Sophie Bacq, Assistant Professor of Social Entrepreneurship at Northeastern University: [email protected] and [email protected]

Abstracts will be selected and authors will be notified and invited by September 15th, 2013 to submit a full paper due on Monday October 28th, 2013.

We hope to see you here in November!

Jill and Sophie