Robert Wexler, Principal
Rules of Engagement in the New Social Economy: Imagining a New Operating Model
•
Moderator: Deborah Alvarez-Rodriguez, President and CEO, Seam Innovation
•
Speakers: Robert Wexler, Principal, Adler & Colvin @AdlerColvinSF | @eowexler | adlercolvin.com
Sara Brenner, President, Community Wealth Partners @WeDreamForward | communitywealth.com
Bill Strathmann, CEO, Network for Good @Network4Good | @bstrathmann | www1.networkforgood.org
Rebecca Masisak, CEO, TechSoup Global @TechSoup | @rmasrmas | techsoupglobal.org
Legal Models for Social Enterprise Robert Wexler @AdlerColvinSF | @eowexler
In the Beginning ...
•
You have one nonprofit corporation
•
It is tax-exempt under 501(c)(3)
•
Call this organization “Charity”
Charity has an idea •
Let’s start a new revenue generating social enterprise activity.
•
Let’s call it NEW-SE
Where do we put NEW-SE??? •
We can keep it within Charity
•
We can form a new nonprofit affiliate
•
We can form a for-profit affiliate or subsidiary, which can be: •
LLC
•
Corporation
•
Coop
So ....
How do we decide?
Three Key Legal Issues 1.
Is the NEW-SE related to Charity’s tax-exempt purpose? If yes, could keep within Charity.
2.
If not, does the activity jeopardize the tax-exempt status of Charity? If yes, need a for-profit.
3.
Is there significant liability associated with the new activity to warrant a separate legal entity no matter what? (could lead to nonprofit or for-profit sub)
Three Key Business Issues 1.
Capital for NEW-SE: •
Don’t need much
•
Coming from Charity
•
Coming from new grants and gifts
•
Coming from investors (need a for-profit)
2.
Are there administrative reasons to separate out board and staff.
3.
Do we want to create employee stock options?
If Charity Picks a For-Profit, Consider New For-Profit Toys L3C since 2008 • Benefit corporation since 2010 • Social (formerly flexible) purpose corporation since 2012 • Delaware Public Benefit Corporation since 2013 •
•
B corporation certification is also available (not a legal form)
All New Corporate Forms Have:
•
A business purpose PLUS: One or more charitable or social benefit purposes Reporting to shareholders Limits on ability to undo the social/benefit purpose Accountability Transparency Limited liability Taxed like regular for-profits
•
See the handout for the differences between forms.
•
• • •
• • •
The Community Wealth Partners Model Sara Brenner @WeDreamForward
Our goal is to help change agents solve social problems at the magnitude at which they exist. • •
• • •
For-profit subsidiary C-Corp and B-Corp Certified Single shareholder Aligned mission and governance Debt capitalized
The Network for Good Model Bill Strathmann @Network4Good | @bstrathmann
The TechSoup Model Rebecca Masisak @TechSoup | @rmasrmas
•
Moderator: Deborah Alvarez-Rodriguez, President and CEO, Seam Innovation
•
Speakers: Robert Wexler, Principal, Adler & Colvin @AdlerColvinSF | @eowexler | adlercolvin.com
Sara Brenner, President, Community Wealth Partners @WeDreamForward | communitywealth.com
Bill Strathmann, CEO, Network for Good @Network4Good | @bstrathmann | www1.networkforgood.org
Rebecca Masisak, CEO, TechSoup Global @TechSoup | @rmasrmas | techsoupglobal.org
NEXT UP: 10:30 am: Coffee Break, courtesy of Public Interest Registry in the Innovations Pavilion, Willow Room 11:00 am: Mid-Day Plenary
• SPEAKER: Diana Aviv, Independent Sector • PERFORMER: Miri BenAri, Grammy-Winning violinist and Humanitarian
•
Moderator: Deborah Alvarez-Rodriguez, President and CEO, Seam Innovation
•
Speakers: Robert Wexler, Principal, Adler & Colvin @AdlerColvinSF | @eowexler | adlercolvin.com
Sara Brenner, President, Community Wealth Partners @WeDreamForward | communitywealth.com
Bill Strathmann, CEO, Network for Good @Network4Good | @bstrathmann | www1.networkforgood.org
Rebecca Masisak, CEO, TechSoup Global @TechSoup | @rmasrmas | techsoupglobal.org
Legal Models for Social Enterprise Robert Wexler @AdlerColvinSF | @eowexler
In the Beginning ...
•
You have one nonprofit corporation
•
It is tax-exempt under 501(c)(3)
•
Call this organization “Charity”
Charity has an idea •
Let’s start a new revenue generating social enterprise activity.
•
Let’s call it NEW-SE
Where do we put NEW-SE??? •
We can keep it within Charity
•
We can form a new nonprofit affiliate
•
We can form a for-profit affiliate or subsidiary, which can be: •
LLC
•
Corporation
•
Coop
So ....
How do we decide?
Three Key Legal Issues 1.
Is the NEW-SE related to Charity’s tax-exempt purpose? If yes, could keep within Charity.
2.
If not, does the activity jeopardize the tax-exempt status of Charity? If yes, need a for-profit.
3.
Is there significant liability associated with the new activity to warrant a separate legal entity no matter what? (could lead to nonprofit or for-profit sub)
Three Key Business Issues 1.
Capital for NEW-SE: •
Don’t need much
•
Coming from Charity
•
Coming from new grants and gifts
•
Coming from investors (need a for-profit)
2.
Are there administrative reasons to separate out board and staff.
3.
Do we want to create employee stock options?
If Charity Picks a For-Profit, Consider New For-Profit Toys L3C since 2008 • Benefit corporation since 2010 • Social (formerly flexible) purpose corporation since 2012 • Delaware Public Benefit Corporation since 2013 •
•
B corporation certification is also available (not a legal form)
All New Corporate Forms Have:
•
A business purpose PLUS: One or more charitable or social benefit purposes Reporting to shareholders Limits on ability to undo the social/benefit purpose Accountability Transparency Limited liability Taxed like regular for-profits
•
See the handout for the differences between forms.
•
• • •
• • •
The Community Wealth Partners Model Sara Brenner @WeDreamForward
Our goal is to help change agents solve social problems at the magnitude at which they exist. • •
• • •
For-profit subsidiary C-Corp and B-Corp Certified Single shareholder Aligned mission and governance Debt capitalized
The Network for Good Model Bill Strathmann @Network4Good | @bstrathmann
The TechSoup Model Rebecca Masisak @TechSoup | @rmasrmas
•
Moderator: Deborah Alvarez-Rodriguez, President and CEO, Seam Innovation
•
Speakers: Robert Wexler, Principal, Adler & Colvin @AdlerColvinSF | @eowexler | adlercolvin.com
Sara Brenner, President, Community Wealth Partners @WeDreamForward | communitywealth.com
Bill Strathmann, CEO, Network for Good @Network4Good | @bstrathmann | www1.networkforgood.org
Rebecca Masisak, CEO, TechSoup Global @TechSoup | @rmasrmas | techsoupglobal.org
NEXT UP: 10:30 am: Coffee Break, courtesy of Public Interest Registry in the Innovations Pavilion, Willow Room 11:00 am: Mid-Day Plenary
• SPEAKER: Diana Aviv, Independent Sector • PERFORMER: Miri BenAri, Grammy-Winning violinist and Humanitarian
