ONE SCOOP OF ICE CREAM AT A TIME.
The goals are divided into equally powerful areas. Business--It aspire to develop Taharka
Brothers into the next power play, the next Ben and Jerry's of Baltimore, and to fight the
other giants of the market. Community--The company's community aspirations are no less
lofty. It believes in using business as a platform to learn the qualities of leadership that make
all of our lives better!
For some people, the thought of a corporation working to help benefit society might
seem like an oxymoron. Businesses, large companies in particular, are sometimes
considered soulless slaves striving to maximize profits for the benefit of their investors
alone. Maryland's new Benefit Corporation Law, which went into effect on Oct. 1,
aims to change that.
The law, the first of its kind in the nation, creates an additional option for entrepreneurs
The law, the first of its kind in the nation, creates an additional option for entrepreneurs
who previously had only two choices when incorporating their business -- for-profit
or non-profit. Sponsored by State Sen. Jamie Raskin (D-Montgomery), the law creates
a new class of corporation, one that is concerned as much about benefiting society as
it is about the bottom line. It also opens an avenue of funding for social entrepreneurs
to seek investment capital.
"Businesses will be for-profit but have a public purpose cemented in at the launch of
"Businesses will be for-profit but have a public purpose cemented in at the launch of
the company," explains Raskin. "This struck me as a very attractive evolution of the
corporate form. Right now a normal corporation must act exclusively to advance
shareholder value and enrich the company."
The additional choice ensures that companies will no longer be faced with sacrificing
The additional choice ensures that companies will no longer be faced with sacrificing
their socially-beneficial goals when confronted with an acquisition offer that, under
traditional corporation laws, it couldn't refuse without risking a shareholder lawsuit.
"There have been a number of socially-conscious companies that have been forced to
"There have been a number of socially-conscious companies that have been forced to
sell out to large corporations and end up sacrificing the public side of the equation,"
says Raskin. "Ben & Jerry's is an excellent example. The directors of the corporation were required to accept a handsome buyout offer even though they knew the business would
lose its soul."
Benefit corporations can pursue any goal that will have a "general public benefit." In
Benefit corporations can pursue any goal that will have a "general public benefit." In
other words, it has to be something that will have a measurable positive impact on
society and the environment, like going totally "green," offering literacy or work training programs, or hosting activities that will promote the arts and sciences. Companies
incorporated under the law will have to submit an annual report detailing not only
their financials, but also their good works.
According to Ida Cheinman, a board member of the Chesapeake Sustainable Business
According to Ida Cheinman, a board member of the Chesapeake Sustainable Business
Alliance (CSBA), the law will create a network of locally-owned triple bottom line (TBL) businesses, companies equally concerned about their social, environmental, and
economic performance.
"The time is right for this. There are a lot of businesses who have, perhaps unofficially,
"The time is right for this. There are a lot of businesses who have, perhaps unofficially,
been operating based on the triple bottom line. Especially in this economy, everyone
is looking for a way to differentiate themselves," Cheinman says.
"From a pure marketing standpoint," she continues, "consumers, customers, clients want
"From a pure marketing standpoint," she continues, "consumers, customers, clients want
to do business with companies they like and feel good about their choices. Sustainability is such a hot topic and larger corporations are greening their supply chain, becoming more environmentally responsible with reporting guidelines they have to live by, they will expect their vendors and service providers to be sustainable companies. Being formally incorporated as a benefit corporation is really a quick, legitimate way of saying 'I am exactly what you're looking for.'"
Investors will also take note, says Cheinman. "More and more investors are increasingly looking at the triple bottom line, whether a company is financially viable but is it also environmentally and socially responsible."
B-Lab, the group widely credited with driving the benefit corporation movement and getting legislation on the agenda in multiple states across the country, approached CSBA about holding information sessions, one of several groups holding similar meetings around Maryland about the new law. Response, says Cheinman, has been greater than expected, with meetings packed with entrepreneurs interested in the new law.
Sean Smeeton, president of Taharka Brothers, a locally-owned ice cream company with a social mission, had already made the decision to transition from a non-profit to a for-profit company. The benefit corporation law was a perfect match that "allowed the company to make a statement."
The company, named after a local basketball team, works to help young men from Baltimore's underserved communities gain work experience, leadership skills, and the opportunity to become stockholders in Taharka Brothers, and dispel the negative image of young men that is so pervasive in Baltimore.
"I believe strongly in the power of business to help solve social problems. As a non-profit it's hard to get people to help you do things. But now that social entrepreneurship has become much more popular, this will help start a movement to help change things," Smeeton says.
Looking forward, Raskin says he hopes that the Maryland law will not only make the state a lodestone for social entrepreneurs but that it will also lead to a sea change in the way that corporations view their contributions to social welfare.
"Larger corporations will probably be the last to come around, but looking forward 20 to 30 years I hope we will have a dominate corporate model that obligates businesses to look out not just for profits but for people and the benefits of the community," he says.
Walaika Haskins is editor-at-large of Bmore Media. She has lived and worked in Baltimore City for 25 years, taking occasional breaks to live in Paris, New Orleans and New York City, but she always comes back to Baltimore.
Investors will also take note, says Cheinman. "More and more investors are increasingly looking at the triple bottom line, whether a company is financially viable but is it also environmentally and socially responsible."
B-Lab, the group widely credited with driving the benefit corporation movement and getting legislation on the agenda in multiple states across the country, approached CSBA about holding information sessions, one of several groups holding similar meetings around Maryland about the new law. Response, says Cheinman, has been greater than expected, with meetings packed with entrepreneurs interested in the new law.
Sean Smeeton, president of Taharka Brothers, a locally-owned ice cream company with a social mission, had already made the decision to transition from a non-profit to a for-profit company. The benefit corporation law was a perfect match that "allowed the company to make a statement."
The company, named after a local basketball team, works to help young men from Baltimore's underserved communities gain work experience, leadership skills, and the opportunity to become stockholders in Taharka Brothers, and dispel the negative image of young men that is so pervasive in Baltimore.
"I believe strongly in the power of business to help solve social problems. As a non-profit it's hard to get people to help you do things. But now that social entrepreneurship has become much more popular, this will help start a movement to help change things," Smeeton says.
Looking forward, Raskin says he hopes that the Maryland law will not only make the state a lodestone for social entrepreneurs but that it will also lead to a sea change in the way that corporations view their contributions to social welfare.
"Larger corporations will probably be the last to come around, but looking forward 20 to 30 years I hope we will have a dominate corporate model that obligates businesses to look out not just for profits but for people and the benefits of the community," he says.
Walaika Haskins is editor-at-large of Bmore Media. She has lived and worked in Baltimore City for 25 years, taking occasional breaks to live in Paris, New Orleans and New York City, but she always comes back to Baltimore.
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