Earlier this year, the state of Washington joined several other states in offering legal status so-called "hybrid entities", or corporations that blend nonprofit and for-profit principles. In other words, the businesses are required to adhere to a social mission but are permitted to make a profit for the businesses' owners.
A few interesting highlights of from the language of the bill are:
1) Every corporation must be organized to carry out its business in a manner intended to promote positive short-term or long-term effects of, or minimize adverse short-term or long-term effects of, the corporation's activities upon any or all of the corporation's employees, suppliers, or customers; the local, state, national, or world community; or the environment
2) The Social Purpose Corporation must include a social purpose in its formation documents
3) The board of directors of a Social Purpose Corporation is required to issue an annual social purpose report to its stockholder
I think this is a great precedent to inspire business to think beyond their
bottom line to their impact on the global economy, population, and environment.
It also helps to remove a stigma that social benefit doesn't always have to
mean non-profit (i.e. small paycheck) as long as legal framework is set to make
sure the mission statement is adhered to. It will be interesting to see the new
set of companies that arise with this designation.