Paper submitted to the 12th International conference of the International Society for Third Sector Research, Ersta Sköndal University College,

Transcription

1 Paper submitted to the 12th International conference of the International Society for Third Sector Research, Ersta Sköndal University College, Stockholm, Sweden, June 28 - July 1, 2016

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4 a) Economic structure of entity General methods 1) Economic nature of operation Capital sources 2) Economic ownership Dees Six Axes Primary beneficiaries Governance 3) Primary economic beneficiary 4) Economic thought Extended Elements 5) Economic sustainability Scope of this paper 6) Economic investment 7) Economic scalability Work force Suppliers b) Internal governance and structure c) Business model Future research

5 Purely Philanthropic Entity Purely Commercial Entity Primary Characteristics Economic Nature of Operation Economic Ownership Primary Economic Beneficiary Donate money and time without return Not owned by financial contributors Public Spend cost to earn economic return and generate profit Owned by shareholders Private shareholders Economic Thought Philanthropy Capitalism, neo-liberalism and shareholder wealth maximization Secondary Characteristics Economic Sustainability Economic Investment Economic Scalability Reliant to outside financial resources Not possible Not scalable Possible by Equity or Debt Investment Scalable by accumulated capital, additional capital and debt

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10 Theoretical Border Purely Philanthropic Entity Philanthropy-based Social Enterprise Commercial-based Social Enterprise Purely Commercial Entity Economic Nature of Operation Donate money and time without return Financially NOT self-sustainable Financially self-sustainable Spend cost to earn economic return and generate profit Primary Characteristics Economic Ownership Primary Economic Beneficiary Economic Thoughts Not owned by financial contributors Public Philanthropy Depends on approach Public Utilize positive effects of business to maximize philanthropic effect Depends on approach Public Extend market mechanism to adjacent area of Purely Commercial Owned by shareholders Private shareholders Capitalism, neo-liberalism and shareholder wealth maximization Secondary Characteristics Economic Sustainability Economic Investment Economic Scalability Reliant to outside financial resources Not possible Not scalable Partially reliant to outside financial resources Difficult Low Limitedly possible by Equity or Debt Investment Middle Possible by Equity or Debt Investment Scalable by accumulated capital, additional capital and debt EU 32 North America 9 United Kingdom 15 United States 8 Italy 4 Canada 1 Romania 4 Belgium 2 Asia 6 Austria 1 Cambodia 1 Czech Republic 1 India 1 Denmark 1 Japan 1 Ireland 1 Korea 1 Netherland 1 Malaysia 1 Portugal 1 South Korea 1 France 1 Africa 1 Note: When one article refers Uganda 1 to multiple countries, it is counted multiple times. Total 58

11 1. Traditional nonprofit form New form designed for Social Enterprises 14 Company limited by guarantee (UK) 4 Community interest company (UK) 7 Company limited by guarantee w/charitable Status (UK) 2 Benefit corporation (US) 3 501(c)(3) nonprofit corporation (US) 1 Low-profit limited liability company (US) 2 501(c)(3) nonprofit organization (US) 1 Social cooperative (Italy) 1 Charity (UK) 1 Social cooperative (Italy, Spain, France) 1 Company limited by guarantee (Ireland) 1 Nonprofit corporation (Canada) 1 4. Traditional mutual ownership form 9 Nonprofit organization (Cambodia) 1 Cooperative (in general) 2 Nonprofit organization (in general) 1 Industrial and Provident Society (UK) 2 Nonprofit organization (Portugal) 1 Cooperative (Canada) 1 Not-for-profit company (in general) 1 Cooperative (Portugal) 1 Registered Charity (UK) 1 Cooperative (UK) 1 Trust (Ireland) 1 Cooperative (US) 1 Trust (UK) 1 Mutual society (Portugal) 1 2. Traditional for-profit form Certified status for Social Enterprises 6 Corporate social responsibility 5 Certified B corporation 3 Company limited by shares (UK) 4 Social enterprise (Denmark) 1 Limited liability company (US) 2 Social enterprise (Italy) 1 Commercial company (in general) 1 Social enterprise (Korea) 1 Limited liability company (Romania) 1 Limited partnership (Canada) 1 6. Government-related form 2 Società a Responsabilità Limitata, similar to LLC (Italy) 1 Public Private Partnership (India) 1 Statutory organizations (UK) 1 Note: When one article refers to multiple forms, it is counted multiple times. Total 64

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17 Economic Nature of Operation Purely Philanthropic Entity Donation without return Not selfsustainable Combination of donation and earned income with gov. support operation in quasi-market with no equity return operation in market with lower equity return operation in market Mutual Ownership Entity operation in market For-profit Entity with CSR operation in market Purely Commercial Entity operation in market Economic Ownership Primary Economic Beneficiary Economic Thought Philanthropy Public Public Member Public Shareholder Member Shareholder Shareholder Public Public Public Public Public Member Shareholder Shareholder Making philanthropy more effective Making welfare state more effective Sustainable operation for public benefit Public and shareholder benefit balancing Member wealth maximization Shareholder wealth maximization Shareholder wealth maximization Financial Self-sustainability No No Yes Yes Yes Yes Yes Yes Equity Investment No No Debt Investment No Difficult Yes, condition may apply Yes, condition may apply No Yes Yes, condition may apply Yes, condition may apply Yes by members Yes Yes Yes Yes Yes Scalability No Low Middle Low Middle Middle High Middle Low High High Secondary Characteristics Primary Characteristics Applicable legal form examples in practice Ordinary charitable organization Nonprofit Corp(b) CIC/CLG(b) Social Coop Nonprofit Corp(a) CIC/CLG(a) Benefit Corp CIC/CLS Certified B Corp Traditional Coop For-profit Corp with CSR mindset Ordinary Stock Corporation Philanthropy-based Social Enterprises Social Enterprise Entities Commercial-based Social Enterprises Note: To distinguish the two types of nonprofit corporations discussed in the earlier subsection, we named the financially self-sustaining one Nonprofit Corp(a) and the financially not self-sustaining one Nonprofit Corp(b). Furthermore, because CLG-based CICs can technically be used for both financially self-sustaining operations and financially not self-sustaining operations, we distinguished the two alternatives by naming the former approach CIC/CLG(a) and the latter approach CIC/CLG(b).

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19 Consulting 16 Community building 10 Sports and health 4 Marketing service 2 Local learning community building 1 Yoga school 1 Business consulting for social enterprise 2 Donation matching service 1 Spa 1 Matching ethical fashon brands and suppliers 1 Promotion of local business 1 Acupuncture 1 Business consulting for nonprofits 1 Co-working space and community 1 Fitness 1 Think tank for biosecurity 1 Hosting a competition for young talents 1 Leadership development 1 Community building for sports 1 Art 3 Legal service for small business and community 1 Matching schools and students 1 Artists support 1 Consulting for small businesses 1 Community building for women 1 Musical performance 1 Marketing service for social enterprise 1 A group to fight for AIDS 1 Film production focused on developing countries 1 Consulting for vulnerable people 1 Community development consulting 1 Printing and IT services 1 Education 3 Financial advisory service 1 Household 7 Firearm training 1 Business and brand development 1 Cleaning service company owned by minority 1 Online learning 1 IT consulting 1 Pest control 1 Online job training for vulnerable people 1 Painting 1 Food and agriculture 13 Cleaning service with soap recycling 1 Architecture 2 Organic rice 1 Pet sitting 1 City planning 1 Various foods produced by cooperatives in India 1 Furniture 1 Architecture design 1 Prawns grown in eco-friendly system 1 Nanny 1 Fairtrade coffee 1 Others 7 Delivery of pre-selected healthy foods 1 New technology 6 Community solar energy 1 Gulten free noodles 1 Highly efficient cogenerator 1 Logistics service by hiring veterans 1 Organic tea 1 Water purifier 1 Textile creating local jobs 1 Herbs 1 smartphone app for better sleep 1 Social Impact Investment Fund 1 Restaurant 1 Ecological paper 1 Media production 1 Livestock 1 Eco-friendly toilet paper 1 Pre-selected "green" office supplies 1 Wine 1 Energy-saving new technology 1 Surfboard 1 Organic farm 1 Organic fertilizer 1 Total 71

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22 files/modelbenefitcorplegislation\_2016.pdf businesses/find-a-benefit-corp net/become-a-b-corp/how-to-become-a-b-corp/ performance-requirements eu/become-a-b-corp/how-to-become-a-b-corp/ legal-roadmap/corporation-legal-roadmap net/become-a-b-corp/how-to-become-a-b-corp/ make-it-official-global org/icnl_online_library_seo/transnational/icnl_ oll_legal_framework_for_social_economy_and_social_ Enterprises_A_Comparative_Report.html Charities-and-Non-Profits/Charitable-Organizations/ Exempt-Purposes-Internal-Revenue-Code-Section-501(c) (3) sites/default/files/alfresco/publication-pdfs/ The-Nonprofit-Sector-in-Brief-2015-Public- Charities-Giving-and-Volunteering.pdf tablewiz/bmf.php government/uploads/system/uploads/attachment_data/ file/445334/cic annual-report pdf

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