Giving Compass' Take:

• Newman's Own Foundation, backed by the salad dressing company of the same name, formed a network of entrepreneurs who share their lessons about grantmaking and equity.

• Will the trend of giving all profits away gain traction as more companies take a socially conscious approach?

• Read about the competitive advantage of social enterprises. 

Newman’s Own pioneered the idea of a philanthropic enterprise. Now, it’s helping to coalesce a new movement.

When the cocktail bar Coup–short for coup d’etat–opened in New York’s East Village last year,  promising to donate 100% of all profits to charities whose missions might be affected by the Trump Administration, it joined the rank of a growing number of companies with a fairly nontraditional business plan:

Rather than simply make a profit, these places are experimenting radical form of conscious capitalism: Cover costs, pay fair wages, and then donate rest in a way that’ll improve society.

There’s no typical corporate structure or preferential tax treatment for this kind of company, meaning that profits, regardless of where they are directed, are still subject to business income tax–and questions about how to manage and grow a business while still giving money away abound.

To help answer those questions, the company that originated this model 35 years ago has launched something of a support group. The Newman’s Own Foundation, backed by the same-named salad dressing company (which since moved into lines of pasta sauces, lemonade, popcorn and frozen pizza, among other many things) hosts its own “philanthropic enterprise program,” a network of about two dozen similarly-minded entrepreneurs.

The giveaway groups began meeting in the summer of 2014. Without a formal consultancy or think tank keeping tabs on this community, the Newman’s Own Foundation and its 25 enterprise members track down other company founders to join the group on their own, largely through word of mouth.

Together, these companies share emerging lessons and strategies around everything from offering free services to growing responsibly, effective grant-making techniques, and how to maximize equity at the point of a sale.

Read the full article about business trends by Ben Paynter at Fast Company