Tag Archives: social benefit

Social Entrepreneurship: Redefining Your Career – by Ray Dinning, social venture attorney

In a recent lecture series on defining “authentic manhood” and a man’s role in society today, the following four factors were discussed as critical in our modern world (which seem frankly to me to be applicable to both men and women in our society) and so I think these characteristics apply to us all:

1.  Reject Passivity – Get Involved in any issue or cause you feel strongly about;

2.  Accept Responsibility – If no one else will do it, then you must take responsibility and act;

3.  Live Courageously – Nothing ventured – nothing gained;

4.  Invest your time and resources for the future – Think about other, future generations and being a wise steward with the talents, resources and time we have on this Earth.

In reviewing these characteristics, it seems that the macho image of the male role model is being replaced by a kinder, more socially-minded modern day man – the social entrepreneur.  Take the following excerpt from an article written on Dr. Mohammed Yunus:

Below is taken from http://www.bankingonthepoor.blogspot.com

Dr. Muhammad Yunus kicked-off the Commonwealth Club’s series of talks on social entrepreneurship today in a speech at the Fairmont Hotel. The event doubled as a book signing for his new work, “Building Social Business—The New Kind of Capitalism that Serves Humanity’s Most Pressing Needs.” Dr. Yunus and Grameen Bank, the institution he founded in 1976 to provide credit to poor women in Bangladesh, were co-recipients of the Nobel Peace Prize in 2006 for their work in developing microfinance.

In his speech Dr. Yunus traced the evolution of his thinking from the founding of Grameen Bank to his present passion for promoting social businesses that serve the poor. In 1974, while teaching economics in Chittagong University, he observed first hand the effects of a devastating famine on the poor of Bangladesh. He realized the elegant economic theories he had studied were next to useless for these people.

Venturing outside the gates of the university he began to learn of the underlying problems afflicting the poor, locking them in a cycle of poverty. Principally, he realized their lack of access to reasonable credit kept them in the clutches of the money lenders. With the equivalent of a mere $27 he was able to break this cycle of exploitation for 42 women. If he could do so much for so little Dr. Yunus wondered why banks shouldn’t be able to do much more for the poor?

Unable to convince the established banks that the poor were indeed “credit worthy” and would not only pay back their loans but also use them to lift themselves and their families out of extreme poverty, he founded Grameen Bank. Today the bank has over 8 million clients, 97% of whom are women, 2,600 branches and over 20,000 employees. The bank lends more that $100 million per month and experiences a 98% repayment rate on its loans. “Compare this performance to that of the big banks during the current economic crisis and tell me who is credit worthy,” Dr. Yunus said.

Lack of credit was not the only problem he uncovered. Lack of sanitation, health care, access to information, education, nutrition were among the many issues Dr. Yunus saw affecting the poor. “When I see a problem I create a business to address it” he stated. But the form of the businesses he creates is different from the normal for-profit companies. Social enterprises are enterprises either owned by the poor or have been funded by social entrepreneurs willing to forgo a monetary return on their investments.

As discussed in his new book, social business have dual “bottom lines” one social and the other economic. They operate as for-profit businesses to ensure their sustainability, but forego an economic return in order to achieve a social impact. He cited Grameen’s collaboration with the French company Danone to produce a special yogurt product for malnourished children in Bangladesh as an example of such a social business.

And now Dr. Yunus brings his poverty fighting philosophy to the United States. Since January of 2008, Grameen America has opened three branches in New York and one in Omaha, Nebraska, to serve the needs of poor entrepreneurs. Employing the same group lending methodology pioneered by Grameen Bank in Bangladesh, Grameen America has already lent to more than 3,000 low income small business owners in the United States with the same 98% repayment record. He announced that Grameen America will open a branch in San Francisco this summer.

The poor did not create the conditions that trap them in a cycle of poverty, nor are they to blame for the many crises, financial, environmental and social that threaten the world today. That is the fault of systems predicated on economic theories that view humankind as motivated purely by profit and self interest. There is, according to Dr. Yunus, another side to human nature, a selfless side that rushes to help when disaster strikes. Build businesses that appeal to the selfless side of human nature and he believes we will find solutions to the problems that keep more than 2 billion people in extreme poverty.”

I, for one, am interested in living a courageous and socially-minded life, dedicated to helping others and the poor in Africa and elsewhere around the world.  To many, it may be an unwise or futile exercise.  To me, I would rather be planting organic Moringa trees in Africa to help fight malnutrition or creating micro enterprise opportunities for those in need or using my time, talents and resources to help others in our World.  This may invoke criticism from the narrow-minded, but guess what – social entrepreneurship is here to stay.  You can stick your head in the sand of passivity and inaction, or you can live a courageous life helping others and making our Earth a better place.

Besides, all those socially-minded MBAs graduating from prestigious universities such as Harvard, Columbia, Cambridge with degrees specializing in Social Entrepreneurship and others around the world cannot be wrong – see http://www.good.is/post/are-mbas-ditching-investment-banking-for-social-entrepreneurship/

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Emergent University or EmergentU – A practical, social experience and interview by Ray Dinning, JD, LLM (taxation)

Having the opportunity to meet with and interview Professor Bert van Lamoen, social architect and Emergence Theory visionary in Amsterdam in March, 2012, I began to understand the driving force behind social entrepreneurship, education and emergence.  As a visionary social architect, Professor van Lamoen is an affable and approachable intellectual who openly discusses the transformational changes taking place in the world today.  Emergent University or EmergentU is one of those transformational educational concepts that is fast becoming a reality.  As a planned post-graduate, practical and social incubator of social entrepreneurship and emergence, EmergentU plans a practical, socially-minded campus in the heart of Africa – the South Luangwa Valley in Zambia.

Its goal is to provide today’s social entrepreneurs with practical, open-source lectures from around the world along with one-on-one training with international professors in a relaxed, private wildlife and nature reserve setting.  Students can then practice what they learn in the field – from wildlife protection, environmental management, cultural studies and social entrepreneurship, leadership training, agriculture and aquaculture and more – with hands-on projects that make a positive impact on the rural communities and cultures in Africa.

This is a truly revolutionary and transformational educational model providing students with practical education with hands-on experience.  Students then leave EmergentU after one semester with a Program Certificate and three months of social architecture or social entrepreneurship experience.

Taken from the http://www.ImagineZambia.org website:

“Emergent U / Postgraduate program
The best education for the world – Knowledge Connecting The World

by Dean/Head Coach Professor Bert van Lamoen

35 years ago I was part of an educational innovation that took place in Switzerland. It was a fulltime Master’s Degree program for creating entrepreneurial change agents, supported by many star professors from all over the world. The first European initiative in holistic action learning – a real forerunner.

Now, at the beginning of the 21st century, and standing on their shoulders, we proudly present a follow-up.

Again we challenge the educational establishment by creating totally flexible, no-nonsense, real-world, (online/offline) programs that offer you academic freedom: the power to totally control how, where, when and what you will learn.

Emergent U is a business school, but done in real time. It’s not a business school with ivy covered walls, where people come. Rather, Emergent U goes to the entrepreneurs.

Our programs are:

focused on learning-by-doing by creating entrepreneurial partnerships;
emergent-based; and
learner centered – everyone must take charge of it’s own learning.
Our coaches/tutors/professors will work with you one-on-one to help you design and complete your custom program.

And we are the first Business School that uses all the advantages of barter and complementary currencies.

We strongly believe that entrepreneurship will transform the society. Entrepreneurship is the driving force for creating a better world and the company is a tool that is used to actualise one’s personal vision, mission and dreams.

Entrepreneurial learning is faster and more effective by designing flat, non-hierarchical structures like communities and relational networks: we call them KINO’s – Knowledge Intensive Network Organisations.

We all live in a time of unprecedented change throughout the world from a complete upheaval in the former communist bloc nations to a number of new economic and political alliances in the form of the European Union, the North American Free Trade Agreement (NAFTA), NEPAD Africa, ASEAN and WTO China and Vietnam.

The development of a new world order has brought into existence many new organizational challenges and opportunities.

With the rapid development of information, and other, technology a networking world is emerging. A truly global village is becoming part of reality. Every company in today’s market must face and adapt to the context of a new economy, which is characterized by globalisation, interrelatedness, complexity, and the importance of knowledge.

More than ever before managers are being challenged to create new organizations and to rethink the ways in which we structure those organizations.

The conventional approach, based on the assumption that the world is predictable and controllable, is no longer appropriate.

We have entered an age of uncertainty, one that contains the seeds of both opportunity and potential disaster.

The challenge is how to exploit the opportunities. A different approach is necessary.

Our coaching/consultancy/education and organizational development programs concentrate on:

The facilitation of Knowledge Intensive Network Organizations (KINO’s);
The integration of education, work and real-life, practical experience;
Emergent U is truly a work in progress.

Emergent U”

 

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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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