Giving Compass' Take: 

• Benefit Corporations, social enterprises, and nonprofit organizations all function and find success differently. Tom Frick explains how 1% for the Planet, a Vermont based nonprofit, follows a business model that helps advance philanthropy instead of hinder progress. 

• What are the main differences between B Corporations, social enterprises, and non-profits? Is there one model for these entities that sees more success?

• Read about how social enterprises are part of larger social circular innovation models. 

1% for the Planet is a Vermont-based nonprofit started by the folks at Patagonia, another B Corp. Member companies donate 1% of their annual revenue to a list of vetted environmental nonprofits and can the organizations they want to support.

As a Benefit Corporation, we are required by law to provide a “public benefit” to society alongside the standard business goal of generating profit. No easy feat. Without profit, we cannot achieve our philanthropic goals. For us, being a 1% for the Planet member is not only imperative because of the sorry state of our planet, but it’s also important to the long-term survival of our company.

When we became a B Corp, Mightybytes began offering discounts to nonprofits and mission-aligned organizations that wanted to work with us. It felt good to support other social enterprises and use our skills for world-changing social impact and environmental justice projects. Over time, unfortunately, that came at great cost to the company.We ran into a few recurring problems with these discounts, which negatively impacted our ability to operate sustainably and profitably.

While we loved and believed in their missions, it wasn’t a smart business decision to hamstring our financial prosperity in the name of their cause, which happened in a few unfortunate cases.

With our 1% for the Planet membership, philanthropy becomes a company-wide conversation that isn’t directly tied to any one project. The philanthropy conversation dovetails with those about overall profitability so everyone understands that our ability to make donations is directly tied to our ability to operate sustainably and profitably. Whether we make $10,000 in a year or $10 million, 1% of that is coming directly off the top to support environmental nonprofits.

Read the full article about business goals and social goals by Tom Frick at Medium.