The Virginia General Assembly just swung the gate open for social entrepreneurs by approving legislation allowing businesses in Virginia incorporate as “benefit corporations.” HB 2358, introduced by Del. Jennifer McClellan (D-Richmond), at the nudging of Michael Pirron, CEO of Impact Makers, sailed through the House and Senate unopposed and is expected to go into effect July 1st . This makes the Old Dominion among the first states in the U.S. to pass such legislation, joining Vermont and Maryland, plus a handful of others currently considering it. (Learn more about the greater B Corporation movement here.)
A summary of the Virginia version can be found here - but in simpler terms, a B Corp is (kinda) like a business/non-profit hybrid, whereby a profit-making venture formally establishes a social mission into its corporate charter. (I wrote about the LLC version here). Unlike so many CSR initiatives, though – that are often simply veils for compliance or PR – a B Corp registration has teeth. For instance, the company has a fiduciary duty to fulfill its social mission, there are no tax advantages, and they must produce and publicly display an annual report of social impact.
So this isn’t about greenwashing, marketing, or financial loopholes. This is about social enterprise. Doing well by doing good. Triple bottom lines. Granted, that’s not to say someone won’t attempt to game the system – but, in this arena, they won’t last. True social innovators are hardcore, passion-driven folks and will fight to protect their space.
Coincidentally, I’ve been a voracious autodidact of social entrepreneurship for some time. The academic field is still in its infancy, and, for the most part, still sequestered at the MBA-level in elite institutions. Nothing wrong with that – knowledge is emerging, ideas are spreading, coursework is expanding, and social ventures are popping up all around…
…I’m excited to see social entrepreneurship gaining momentum in our fair Commonwealth.
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