For-Profit Social Ventures

1. For-Profit Social Ventures What are they – How do they create social value?

2. What is a For-Profit Social Venture? Social Venture: Organization designed to create positive environmental or social value for a community. For-Profit Social Venture: Organization designed to create positive environmental or social value for a community while creating financial value for its shareholders and owners For-Profit Venture: Organization designed to create financial value for its shareholders and owners.

3. Common Features of FPSVs • Firm is designed to create a specific social or environmental benefit/value • Firm leverages specific operational practices to create social value • Firm adheres to double or triple bottom line in decision making • Firm measures success in terms of social value creation as well as financial valuation using explicit metrics • Firm defines social/environmental aims in fundamental documents • Firm cultivates a culture of social priorities

4. Varieties of FPSVs • Activist • Firm uses its brand to promote a social cause and is driven primarily by social value creation Change Agent Firm is focused on creating a social/environmental benefit but doesn’t use its brand to promote the cause Market Pioneer Firm is driven by financial incentives but promotes a social cause through business dealings or “corporate responsibility” leadership Market Influencer Firm is primarily financially oriented and doesn’t explicitly promote a cause but generally adheres to strong social or environmental standards and practices

5. Terminology • B-Corp: Benefit Corporation - FPSV • Social Enterprise*: Social Venture - FPSV and SV • 501(c)3: Legal Non-Profit - SV • LLC: Limited Liability Corporation or C-Corp - FPV • L3C: Limited Liability Low-Profit Corporation – FPV and FPSV • Hybrid Venture: combination of for-profit and social venture – FPSV

6. Creating Social and Environmental Value • Product or Service is intrinsically beneficial • Supply Chain Interventions • Internal Operations • Advocacy and Philanthropy • Ethics

7. Product or Service • The product or service offered by the company is intrinsically beneficial to the community

8. Supply Chain • Selecting Vendors by social/environmental value • Encouraging lower prices to reach underserved communities • Establishing relationships with minority or women-owned vendors and suppliers • Using purchasing power to encourage social values in suppliers and vendors

9. Internal Operations • Encouraging pro-social company management (women or minority management) • Encouraging pro-social employment • Engaging pro-social employment • Encouraging pro-social company location • Paying living wages

10. Advocacy and Philanthropy • Using company brand and advertising space to promote a cause • Management spearheading social cause • Use corporate profits to make philanthropic donations • Use corporate foundation to make regular philanthropic donations • Encouraging a culture of volunteerism and philanthropy amongst employees

11. Ethics • Creating statements, committees or policies to articulate and act upon ethical behavior • Creating an internal culture of ethical standards by engaging in regular discussion with employees and management

12. For-profit social Ventures What are they – How do they create social value? Sources: RiseProject.org “For-Profit Social Entrepreneur Report.” Clark, Catherine: Ucak, Selen. March 2006 Cause Capitalism “15 Social Venture Capital Firms That You Should Know About.” April 2010 “For-Profit Social Ventures” Dees, Gregory: Andreson, Beth; Social Entrepreneurship. 2003