When 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.

1. it’s better to stay "pure" and not sell to a big company
2. it’s more effective to be part of a larger company that can rapidly increase distribution and get far more people using the product/service.