Tag Archives: L3C

Moringa Production as a sustainable agricultural model by Ray Dinning, social venture lawyer

In March/April, 2012, I had the opportunity to work with and interview the agricultural social entrepreneurs in the sustainable farming model for Moringa Production in Africa.  The social entrepreneurs at IRDI, a Zambian-based NGO which helps local communities reach the proverbial first rung of the economic ladder to sustainability through Moringa (superfood) production.  Hailed as one of  the most nutritious super foods in the world, Moringa production can aid in fighting malnutrition and other ailments in Africa while providing an economic windfall to rural communities.

IRDI spokesperson, Jacqui Wintle, introduced me to local schoolchildren, rural communities and farmers who were creating sustainability in their sphere of influence with Moringa farming.  This is truly one sustainable agricultural model and product that can aid Africa now and in the future.



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Social Entrepreneurship in Africa named Top 30 Social Entreprenuership Blogs for 2012

Ray Dinning, social venture lawyer, and his blog “Social Entrepreneurship in Africa” have been named One of the Top Social Blogs to Watch in 2012.  See http://www.socialentrepreneurshipinafrica.com.

To view the article, please click on the link below:



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Virginia lawmakers unanimously pass “social venture” legislation with B Corporation by Ray Dinning tax lawyer

Passing unanimously in the Virginia House of Delegates is the new “social venture” vehicle called the “B Corporation” or “Benefit Corporation” which is a vehicle designed to promote the social ventures that I and others have been promoting in Africa and elsewhere around the world.  With the structure of a corporation and some unique characteristics of tax exempt charitable organizations, this is the wave of the future with six States adopting similar legislation and up to 18 other states with laws in the works.

Interestingly, this movement stems back to a lot of original work by nonprofit guru, Michael I. Sanders.  In helping him with research on “Partnerships and Joint Ventures Involving Tax Exempt Organizations (Wiley & Sons 1994), I learned the foundational work on social ventures which has culminated in the need for structures like Virginia’s B Corporation.

Please read the exempt from the Squire Sanders law firm website below:

As of July 1, 2011, Virginia becomes one of the early adopters among states that will permit social entrepreneurs to legally create a new corporate form known as a “benefit corporation.” This new form of corporate entity is intended to permit social entrepreneurs to codify their missions in their corporate charters. This permits the board of directors and management of a benefit corporation to pursue and take societal benefits and social goals into account in exercising their fiduciary discretion instead of being required to act strictly in the best interest of shareholders, a change that eliminates concerns over liability for breach of fiduciary duty under existing corporate law.

Pursuing Public Benefit

The law is modeled on a similar statute enacted by Maryland in 2010, and similar proposals are pending in a number of other states. Virginia’s legislation improves upon Maryland’s statute and makes Virginia the preferred jurisdiction for social entrepreneurs. Virginia’s benefit corporation statute, which is codified as Sections 13.1-782 to -791 of the Virginia Stock Corporation Act, requires that the corporation’s purpose include pursuit of “general public benefit.” The legislation broadly defines “general public benefit” to mean “a material positive impact on society and the environment taken as a whole, as measured by a third-party standard, from the business and operations of a benefit corporation.” However, it also allows benefit corporations to pursue specific public good purposes, including any benefit that serves one or more public welfare, religious, charitable, scientific, literary or educational purposes, or another purpose or benefit beyond the strict interest of the shareholders of the benefit corporation, such as:

Providing low-income or underserved individuals or communities with beneficial products or services;
Promoting economic opportunity for individuals or communities beyond the creation of jobs in the normal course of business;
Preserving or improving the environment;
Improving human health;
Promoting the arts, sciences or advancement of knowledge; or
Increasing the flow of capital to entities with a public benefit purpose.

The statute allows entrepreneurs to commit their for-profit ventures to a specific public good, requires directors and officers to take specified public good interest into account in corporate decisions and actions, and requires them to report on contributions to that goal and submit to auditing of their impact. The statute includes remedial provisions for shareholders to take action against directors and officers who fail to consider the specific public benefit in their decision making and actions. Having official “benefit corporation” status allows entrepreneurs to consider stakeholders such as employees, communities or the environment in business decisions.

Eliminating Risk of Lawsuits and Reducing Costs

Under existing corporate law, company directors may face lawsuits for acting on social objectives if contrary to the financial interest of shareholders, but this statute eliminates that risk. Social entrepreneurs have often faced difficulty fitting their hybrid missions of making money and doing good into existing business entity forms. The variety of arrangements historically utilized (e.g., nonprofits controlling for-profits) can be costly to set up and operate, and often limit the ability to raise money from outside investors. By allowing for the adoption of the “benefit corporation” form of entity, Virginia has permitted its economic institutions – in this case the laws that govern corporations – to keep up with the growing interest in the social enterprise sector.

Many expect that the new legal designation will unlock new capital for social ventures from investors who want to park their money in mission-driven companies.

Enacting the Law

Virginia Gov. Bob McDonnell (R.) signed the bill on March 26, 2011 at the end of Virginia’s legislative session. The bill, sponsored by Democratic state delegate Jennifer McClellan, passed Virginia’s Senate unanimously and passed the House of Delegates by a vote of 97-0.

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Green Power by making “steel industry fuel” by Ray Dinning, lawyer

Congress in expanding Section 45 Federal Income Tax Credits for the production of “steel industry fuel” has opened the door for many coal companies in Pennsylvania, West Virginia and elsewhere to claim valuable and sellable Federal Income Tax Credits.  The credits are available for the production of “steel industry fuel” which is a very specific defined product.  “Steel industry fuel” is produced by recycling coal pond fines or waste coal or coal tar sludge and blending it or spraying it on met coal under very specific guidelines.  This helps coal companies to:


Clean up old coal ponds with carbon in the fines by creating a “steel industry fuel”;

Beef up profits through the syndication and sale of the tax credits while being good environmental citizens.

The Section 45 tax credit, according to Ray Dinning, tax lawyer, is designed to benefit a coal company over the course of one to four years through a sizeable tax credit that is not difficult to qualify for under the guidance of Congress and the IRS.

For help with Section 45 Federal Income Tax Credits or the sale of these credits through monetization and syndication, call International Tax Partners at (757) 232-2619.

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“Making Social Ventures Work” – Ray Dinning, tax lawyer

Reprinted from Harvard Business Journal (Sept. 2010) by Thompson and MacMillan:

In recent years, we’ve all experienced considerable volatility—financial breakdowns, natural disasters, wars, and other disruptions. It’s clear we need new approaches to the world’s toughest economic challenges and social problems. Entrepreneurs can play a central role in finding the solutions, driving economic growth (building infrastructure, developing local talent, infusing struggling regions with investment capital) and helping hundreds of millions of people worldwide. If successful, socially minded entrepreneurial efforts create a virtuous cycle: The greater the profits these ventures make, the greater the incentives for them to grow their businesses. And the more societal problems they help alleviate, the more people who can join the mainstream of global consumers.

The failure rates for new companies and markets, however, are high. That is true anywhere in the world, including emerging economies. The management challenges associated with producing and marketing goods and services at the base of the economic pyramid include imperfect markets, uncertain prices and costs, nonexistent or unreliable infrastructure, weak or totally absent formal governance, untested applications of technology, and unpredictable competitive responses. Given this daunting uncertainty, entrepreneurs need a framework for “unfolding” success from a perceived or an emergent opportunity.

Turning Uncertainty into Risk

Entrepreneurs and others who want to launch businesses in, say, Latin America, Asia, or Africa but lack reliable data about those environments need to put together the best models and mechanisms they can, documenting their assumptions as they go. Critically, however, they need to systematically test each of the assumptions underpinning their preliminary models against a series of checkpoints and be prepared to change on the fly, redirecting their efforts through a process known as discovery-driven planning. In this way, they can act on emerging evidence instead of obstinately and blindly pursuing infeasible objectives. (See Rita Gunther McGrath and Ian C. MacMillan’s “Discovery-Driven Planning,” HBR July–August 1995.)

What Is Discovery-Driven Planning?

However, this method of planning is necessary but not sufficient to handle high-uncertainty ventures. In the following pages, we’ll look at how to combine discovery-driven planning with four other guidelines for building successful businesses in uncertain markets that we developed during a sustained field program carried out by the Wharton Societal Wealth Program (WSWP). Specifically, we’ll consider four social enterprise projects we helped launch in Africa and examine how the guidelines informed the work in each.

It’s important to note that the lessons here aren’t just for entrepreneurs. The management teams of established multinationals, foundations, large NGOs, and other nonprofits can apply them in any challenging and highly uncertain business situation. In doing so, they can better control their costs, increase their impact on society, minimize the effects of surprises, and know when to disengage from questionable projects.

Lessons from the Field

As part of our research in the WSWP—a nine-year-old field research program at the University of Pennsylvania’s Wharton School of Business intended to examine the use of business models to develop projects that attack societal problems—we worked with 10 groups of local entrepreneurs trying to launch base-of-the-pyramid ventures in the United States and several African countries. Each project faced some or all of the elements of uncertainty cited earlier. In a few instances, even the initial objectives and desired outcomes were unclear, which made it tougher to make decisions about where and how to allocate resources.

“Resource allocation in Africa and which social venture projects to begin with is always a priority. Jumpstart projects which can help create micro enterprise businesses based on the larger resource project is a good start,” says Ray Dinning, social venture lawyer.

Ian MacMillan and James Thompson co-authored this article in Harvard Business Review.

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Waste Coal and Refined Coal Tax Incentives by Ray Dinning

Over six companies have sought guidance in the last two weeks on the Section 45 Refined Coal Tax Credit and Waste Coal Tax Credit.  International Tax Partners is assisting small to mid sized companies in claiming their federal energy tax credits.

On October 4, 2010, the IRS issued guidance for the Refined Coal Tax Credit.  Notice 2010-54 provides key guidance on claiming this very beneficial “green” incentive to produce usable coal from waste coal and to produce a cleaner burning coal for energy production.

In 2010, the tax credit is $6.27 per ton of refined coal produced and sold for the power generation market.  “This is a substantial incentive for coal producers to produce and market a cleaner coal product,” says Dinning.  For information concerning Section 45 tax credits or other energy incentives, please call International Tax Partners at 757.232.2619.


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Just before the Leopard Attack by Ray Dinning

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