Who’s Saving America? The Promise of the B-Corp

We’ve had enough of cheaters for a while. Today let’s look at someone (or something) with the potential for saving America, or at least one corner of it.

Ladies and Gentlemen, the B Corporation!

What’s a B Corporation (or “B Corp”), you ask? It’s a new type of business that aims to benefit the community and turn a profit. These entities have a much broader mission than traditional companies and as such are rebooting the idea of business success. But they’re only one aspect of what I consider to be a trend among intrepid millennials – a new economic movement I’ll call Indie Capitalism.

The quote comes from an article by Kathleen Sharp, who (probably at her editors’ request) frames this in terms of Baby Boomers vs. Millennials, a sideshow that she herself winds up contradicting. Put that aside. This is a story worth reading!

While some may argue that B Corporations run counter to the free market system, I don’t see it that way. Rather, they look to me like an attempt to fill a hole. Most corporations are required by law to maximize profits. If you, as the head of the corporation, want the freedom to pursue other goals as well (such as doing good for the community or helping the environment), you are out of luck.

Well, that’s not exactly true. You can own the business yourself and do whatever you want. But if you want access to capital, you will probably need to buy into the profit-maximization plan.(Let’s leave not-for-profits for another day.)

That’s all fine. Investing stockholders, for the most part, like the system of maximizing profits. The last thing you’d want is to invest in some company that fritters away money on some pet cause. But what if investors also want to help the environment or do good for the community? Can’t they invest in responsible companies with a well-defined broader mission? Probably not, at least in the traditional model. The law doesn’t really allow companies that freedom.

Enter the B Corporation. A legal entity, available in some states, that embraces the concept of broader-mission corporations—and in so doing increases the freedom of corporations and investors who want to see their time and money spent in advancing these goals.

Here we go, America! Long live the B Corporation! Let’s start saving America from the cheaters!

And…onward and upward!

Who’s Cheating America? The Highly Profitable Nonprofit!

Ah yes, here we are, in the week of one of our great secular holidays. Maybe the great secular holiday in America. Except that the NFL is, perhaps, closer to a religion than we care to admit. Don’t we worship our teams? Aren’t these gods we scream for? Isn’t this sweaty, feverish feeling something akin to devotion? The agony and ecstasy?

Let’s set that aside and look at some cheaters. In particular, a nonprofit organization that is doing rather well for itself:

[The organization’s] most recent Form 990 filed with the IRS ended on March 31, 2012. They claimed revenue of $255 million, up from $240 million in 2011. So, if you were concerned, things are good. [The organization] has assets of over $822 million.

Does it pay taxes on that money? Well, of course not. As a charitable, nonprofit organization, there’s no need.

Which nonprofit would we like to see bring in all that revenue? UNICEF? American Cancer Society? The Red Cross?

How about… the NFL!!!

The NFL, if you didn’t realize it, exists as a 501 c 6 organization. It’s not for profit!

Aha, you say. This is a trick. The NFL is fairly run as a nonprofit organization. They’re basically a shell, a collection of thirty or so for-profit entities (the teams). All the NFL does is look out for their interests, conduct their joint marketing efforts, hire referees, put in place some rules… this is probably how all the professional sports leagues, do it. Right?

And if you’re wondering, neither Major League Baseball nor the National Basketball Association is registered as a charity, foundation or trade organization. They each gave up their tax-free status years ago.

Okay, okay. So they have a lot of money. They probably need to spend it on things – like healthcare and pensions for former players. Right?

[I]n 2012, NFL commissioner Roger Goodell was paid $29.5 million to run the organization.

Wait, what? How can Gooddell earn that much? Is that comparable to the heads of other nonprofit organizations? Well… not really.

So this guy, this fatcat, earns $29.5 million per year? And the organization who pays it to him doesn’t have to pay any taxes on its earnings? What can possibly justify this?

In order to have that status, the NFL must be run as a charitable foundation.

Maybe I spoke too soon! They’re probably giving it all away. Back to the kids, the kids in hospitals, the ones with leukemia, the many, many kids who idolize them. The selflessness of the NFL brings a tear to the eye…

Charitable Organization Head Roger Goodell (Image Credit: si.com)

In 2012, they gave away a meager $2.3 million.

That’s it? That would barely cover Gooddell’s parking space. What did they spend the two point three million on? (Please say the kids, please say the kids…)

Almost all of it–$2.1 million– went to the NFL Hall of Fame.

For running their own damn hall of fame? That’s it? No taxes because of one of their marketing tools… I do have a tear in my eye. I weep for America. The Greatest Cheated Country in the History of the World.

Previously in Who’s Cheating America: