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Jun 28, 2009

B CorporationWhen I started Care2 over 11 years ago, my goal was literally to create an engine for good – an organization whose output was “goodness” -  so that the more good it did for the world, the more income it would make.. and that, in turn, would pay for a bigger/more powerful engine for doing more good – in a truly virtuous cycle.

I’m pleased to report, so far so good!   With 11 million members, Care2 is now the largest online community for good, we partner with over 400 nonprofit organizations, and we employee about 50 people plus a large and growing blogger network.  As more people use the Care2 platform to make the world a better place, the more our sponsors pay, and the more content and services we’re able to add.

At the time of incorporation, I chose the structure of a “C Corporation” – the standard, multi-shareholder corporation.  There were many benefits to this model:  I could get investors, attract and motivate the best employees with stock options, and have the freedom to operate and refine the model free from restrictive grants and funding cycles that most nonprofits face.  From my perspective, the for-profit model had nothing to do with greed or ethics – it was simply the best vehicle for doing good, given the platform we were building.

In fact, the for-profit model was attractive to me for another reason:  I strongly believe that Business needs to be a driving force for good if we’re to get the world out of the mess we’re in.  Business is an incredibly powerful force – so if we can harness that power for good, we can change the world. I wanted Care2 to be the shining light to show others it’s possible to “do well while doing good.”

To date, there are painfully few examples of financially successful social enterprises… which means investors are (generally rightfully) wary of investing in startups that aim to make a positive social and environmental impact.  I was fortunate enough to find a few investors that believed in me, but most folks still believe they should invest their money for profit, and *donate* their money for good – and they don’t believe it’s possible to do well while doing good.  And that’s a shame.

The problem with being a C Corporation though, is that a lot of people inherently distrust corporations. “You’re for profit? Then you’re not for real. Clearly you’re doing something devious” is the message I’ve been told directly or indirectly time and time again.  Basically, “Nonprofits good. For-profits bad”.  That’s rubbish, and old-school thinking, but I know it’s still a wide-spread misperception.

Of course, the only real difference between a for-profit and nonprofit organization is a tax code – there are plenty of nonprofits that aren’t exactly making the world a better place, and there are some for-profit companies that are.  I was out to prove the doubters wrong, and show the world that a C Corporation really could do good… but even I didn’t like the label of being a “for profit” company.  It just sounds a bit crass, and it’s too simplistic.  Sure, to be a sustainable force for good we need to generate profits, but Care2 is about so much more than that – after all, we don’t put profits above all else – we do well because we treat our employees, customers, partners and other stakeholders well.  Which is why I was attracted to the concept of the “B Corporation.”

B Corporations are a new kind of company which use the power of business to solve social and environmental problems.   Think: “For Benefit” Corporation.    To be eligible for B Corp status, a company must pass a social and environmental screen, and modify its articles of incorporation. Essentially, the B Corp structure gives companies the right to consider all their key stakeholders if the company is purchased.   In contrast, a standard C Corporation has a legal obligation to sell to the highest bidder – even if that is to the detriment of employees, local service providers, the environment, or other stakeholders.  I’m confident no company would ever buy Care2 if they weren’t committed to our mission (they’d have to be crazy not to, because if they violate our mission our members would leave, and there would be no value left).  That said, if Care2 were to be acquired someday, I want to be able to consider more than just the share price, and I’m pleased to say our Board of Directors has voted unanimously to adopt the B Corp principles.

When we became a B-Corp last December, there were just over a hundred B Corporations. Today,  there are 190, representing $1 billion in sales in 31 industries.   B Corporations include an impressive list of socially responsible leaders:  Seventh Generation, Method Products, CleanFish, ShoreBank, GoodCapital, BetterWorldBooks, Numi Organic Tea, New Leaf Paper, and many other social enterprise pioneers.

Visibility: Everyone
Posted: Sunday June 28, 2009, 10:52 pm
Tags: srb bcorp bcorporation [add/edit tags]

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The Real Donna F. (732)
Monday June 29, 2009, 3:01 pm
Thumbs up on the B!

Carmel Meyer (43)
Monday June 29, 2009, 4:52 pm
I am sure you have the business savvy to make the right choices for us on Care2, Randy!

Jamie L. (195)
Monday June 29, 2009, 5:19 pm
I'm glad it's a "B". I hope you aren't hinting of selling care2 any time soon... I'd hate to see what would happen. I've seen what happens. I hope positive things continue to happen, and with the success of Care2 improvements to existing features. I hope if that were to happen we could get back some of the members that are fed up and have left... I miss many of them. That being said, Great job Randy and crew.

Mary G. (46)
Monday June 29, 2009, 5:42 pm
I found your latest blog very informative. After going to all the links and reading the information about the B Lab, it sounds like an ideal situation. However, I am wondering if this is a consideration for the near future of Care2--selling it?



I belonged to care2 when it was an infant and did not have the widespread notoriety it now enjoys. There were no groups per se like we have now. I lost touch with the site for several years and it was just in 2006 that I rediscovered it and became a member again. The changes just keep happening. Some of them are just plain uncomfortable to think about: becoming another Facebook does not sound like a good idea. But for the most part, glitches and growing pains and all, I enjoy being a part of this place and hope that selling is not in the immediate offing. Just because I am not an economics or business person and am curious, under what circumstances or why would you consider putting Care2 on the selling block?

Anna G. (0)
Monday June 29, 2009, 11:26 pm
A great articulation of the B Corporation. Thanks for inspiring all of the would-be social entrepreneurs out there.

JSun GateKeeper (514)
Tuesday June 30, 2009, 6:18 am
Congratulations on the B Corporation, and thanks for explaining it to all of us. The world IS a better place because of the things you do Randy. I'm certain somedays it isn't easy having your job, but the world needs more people like you to help inspire us all to care2 make a difference.

Past Member (0)
Tuesday June 30, 2009, 6:28 am
Thank you Randy for this. There is no other place like care 2, the main reason I come here everyday.

The thought of helping others through your click to donates, petitions and the self-help/support groups, I don't know of any other place that could be better.

Congrats on the B title. I notice you are on the list now with a few companies I recognize from my own State Pa.

Past Member (0)
Tuesday June 30, 2009, 8:23 am
Thomas Jefferson was wrong about a lot of things but right on about the banking system and corporations. I don't like or trust any of them, regardless of their intentions. Any profit made is always at the expense of something else. Do what you will, but I don't buy it.

Randy Paynter (948)
Tuesday June 30, 2009, 10:25 am
Thanks for all the great feedback!

Re “are we planning on selling Care2?” We currently have no plans to sell Care2. We feel there is still a lot of good we can do in the world as an independent organization, and we’re managing things carefully to weather the economic challenges. We’ve got a fantastic team, we love what we do, and we’re all fired up about making Care2 an even more powerful platform for good.

That said, at some point down the line it may make sense to either do a large partnership or possibly even merge with a larger company. With the challenges facing the world, we feel an urgent need to get a lot more people involved in good causes - and there are quite a few large web companies that could help us rapidly extend our reach/impact. For a variety of reasons, we’re trying to make that impact independently, but at the end of the day we’re going to do what we think is going to have the best results over the long run.

In addition, as I stated above, I think it’s important to get our investors a good return. That could happen via an acquisition, but there are other ways (such as stock buy backs) to get investors their money. If we can inspire other investors to put their money into sustainable engines for good, then we’ve truly had a systemic impact. The financial markets shouldn’t have to decide between “doing good” and “making a good financial return”. Today, pension funds and mutual funds have to invest for a good financial return, or the fund managers are going to lose their jobs. We need to give them more options to invest in companies that are making the world a better place – and, a lot of those companies are going to start as small startups that need seed funding… but if investors don’t think “do gooder” companies can make them good returns, those companies aren’t ever going to get off the ground in the first place. So, we’d like to help prove it’s possible to do well while doing good.

Randy Paynter (948)
Tuesday June 30, 2009, 10:48 am
Jonathan Seagull (loved your book btw!;) I want to respond to your statement, “Any profit made is always at the expense of something else.”

On the surface, that sounds good, but it flies in the face of thousands of years of progress. Most of us would say that there has been a lot of good created through innovation and competition over the years. Along with that good, has come a lot of bad, no doubt, but the bad is not a necessary outcome.

There’s actually lots of good in profit. You work hard, you earn a paycheck, and hopefully you have enough leftover (profit) to invest for a rainy day, retirement or donating to charity. Likewise, if companies are efficient and can provide more value than it costs to create their product, then they end up with profit. They can then use that profit to create new products, weather the economic storms such as we’ve seen recently, or reward investors who put the money in to help build the business in the first place. In addition, profits those companies make pay for retirement benefits, government budgets, and the growth of Foundation assets that support many nonprofit organizations.

Past Member (0)
Tuesday June 30, 2009, 12:29 pm
I'm not here to argue, Randy; clearly you are successful at what you do and have a clear vision of where you want to go. I applaud that and you; I wish you well in all your endeavors. I just don't like corporations/companies, something the CIA has referred to itself for years. In my view, they are inherently evil for the most part and tend to stifle small business enterprise, as witness how Microsoft has destroyed much of its competition under the guise of "innovation." Our country has evolved into an entity whose motives are suspect in most of the world, driven by corporations such as Haliburton, Exxon, Blackwater, and Dupont, to name a few. I think the folks over at reclaimdemocracy.org largely have it right. Be a corporation/company if you must and I'll say God bless you, but I'd prefer that you were a small business networked with other small businesses and individuals rather than corporations with their profit-motivated stockholders. Peace and blessings to you and your endeavors for good.

Good H. (3827)
Friday July 3, 2009, 10:33 pm
What is the difference between a B Corp and an S Corp? S Corps, such as the one Paul Newman started, seem to have a similar flavor to the B Corp you describe.

Cathi Hartline (248)
Wednesday July 8, 2009, 5:39 pm
thank You so much for Care2, Randy! i appreciate the opportunity, and I too am experiencing the loss of valued friends here, who are "giving up" out of the stresses they have here and at home, some do not handle change well, or loss, and it tears My heart out seeing them go, and or be overwhelmed, so many of the ones I deal with have no money and barely survive, with keeping their comp.s running, paying their internet fees, and sustain their homes, and families, agree with Johnathan seagulls ideas some why could You not tap the creative ones who need to increase their incomes to continue to be able to be here, by some kind of consignment? for their recycle projects/small (at least to start with) operations? that way a small percentage could help fund care2,in return the individuals could continue to improve their economical lives (which would also ease the stress their families have on them about them spending so much "time" here? especially if their ventures are in line with care2's ideologies? like recycling artists? ones who grow herbs for healing, or health?(like dandelion tea) for an example? would this be too complicated? just a thought, bless You for all You do! I love care2!!....Cathi

Mi Robson (7)
Thursday July 23, 2009, 11:53 pm
Hello, just wanted to say "thanks" for steering this wonderful website into a new section of corporations. I've always advised friends, acquaintances, co-workers, etc. to use this site and this change to B Corp. gives more reason to keep talking about Care2.

Ala Butterfly (232)
Friday August 14, 2009, 10:21 pm
Good to know...sounds great to me! Good you had the foresight to get on another new wave. Congrats!

Kelly H. (0)
Monday August 17, 2009, 10:18 am
Hello Randy,

I've long been skeptical of online petitions. I recently read an article on Snopes about the inefficacy of this form of activism - what some call slacktivism.

I wrote to your customer service asking for official records or any information about the success (or not) of these petitions you host. I also wrote to an owner of a petition that had already gotten more than the number of signatures it was asking for. I wanted to blog about this, but wanted to hear the other side too, not just Snopes.

Well, no one wrote me back.

I'm still in the dark about this topic.

Will you please help?
My email is gipsy7 (at) gmail (dot) com

Thanks!

Elm Morrison (357)
Friday October 30, 2009, 1:24 pm
Randy, thank you for your vision. If anyone thinks that manna falls from heaven to support a site like this I consider them naive. Investors want to see a return, and they are entitled to it. It is the same as 'investing' in a pension fund. And without profit (note I do not use the word 'greed') the world would be in a pretty bad shape. Socialism and Communism has never improved the lot of everybody. The guys at the top still skim off the guys below.... If Care2 is self-supportive via investments (and advertising bringing the return on investment) this site can do so much good. There is nothing like it on the internet.

I have a question though. The constant claim of having over a million members seems farfetched. If one goes through the profiles of people who have e.g. animal rights as an interest and one then sees how many actually sign petitions or note stories, the picture is grim indeed.

The bulk of the signatures for the FireBull campaign did not come from Care2. We have had contact a great many other animal rights organisations across the world to get signatures. If a 'tenth' of the signatures on this petition came from Care2 I would be over-stating the support of Care2 members and by implication their direct involvement in this site.

This leads me to the question: Is the advertising purchases on this site really paying back investors? If the lack of activity here and the huge amount of 'dead' profiles and groups are any indication then I, as an accountant and an IT specialist I cannot see you turning a 'profit'.

This state of affairs is very sad, and the lack of participation on petition signing and news noted drives me crazy - sometimes to total rage.

Just my two cents' worth..... Again, thank you for your vision. If ever you have a job for me - I would jump at it!

Juta Semmel (39)
Saturday October 31, 2009, 3:48 am
I just want to thank you so much for creating such a wonderful site--yes, it is for goodness; I was hoping I could donate to your site if that is ok..however, couldn't find a way to do it..if you can, please get back to me and let me know; God bless you for your view on life--it is a very good one, Juta Semmel

Mi H. (10)
Wednesday June 30, 2010, 5:14 pm
omg.. I'm so'so glad I finally read this Randy|Care2 heroes!

Must admit utter ignorance of the entire new Bcorp option. My business has a new goal here!

NOT 2 MENTION fact you provided a 'preferred vendors list ;]]' or Bcorps I can follow and honor with my dollars; if not use as a model for my B2B SMB's new corporate model goals!

Indeed, since the day my little brother referred me to Care2 to sign a petition, I was impressed with fact that Care2 is such a model of good whilst accomplishing this with modern web tech & marketing synergy and presence that bests many billion dollar retailers and/or their brick-n-mortor combinations thereof!

Since the day I first visited Randy|Care2 Team, this site's whole premise instantly brought to mind one of my decade+ technology/web related favorite quotes:

“If there is technological advance without social advance, there is, almost automatically, an increase in human misery”

(Michael Harrington quotes; American Activist and Writer wrote The Other America , 1928-1989)

..quite Care2.com apropos, no? ;]]]]

kudos for Randy|Care2 Team!

rosemary weston (1)
Tuesday February 7, 2012, 8:13 am
how does one go about investing in care2 stock?

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