FOR-BENEFIT IMPACT ORGANIZATIONS
The defining characteristic of all fourth sector consortiums and organizations is that they integrate social aims with business approaches. Some fourth sector organizations go further by embodying features like inclusive governance, transparent reporting, fair compensation, environmental responsibility, community service, and contribution of profits to the common good.
As the fourth sector expands and becomes more formalized, there is a need to better clarify its boundaries. To that end, a range of efforts are underway to define the criteria for the archetypal Fourth Sector organization, which is referred to as the “social impact" or "for-benefit” organization or consortium.
As broad consensus builds around the definition of the for-benefit archetype, it will become easier for those involved in developing various elements of the support ecosystem for the fourth sector – financial markets, legal forms, technical assistance, assessment and reporting standards, etc. – to focus and integrate their efforts. This will in turn create a more conducive environment for the growth and maturation of the Fourth Sector.
ATTRIBUTES OF A FOR-BENEFIT ORGANIZATION or CONSORTIUM
The following characteristics of an archetypal for-benefit corporation are offered as a starting vision intended to catalyze further dialogue. With this caveat, a fully realized for-benefit could have the following core attributes:
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SOCIAL PURPOSE - The for-benefit corporation has a core commitment to social purpose embedded in its organizational structure.
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BUSINESS METHOD - The for-benefit corporation can conduct any lawful business activity that is consistent with its social purpose and stakeholder responsibilities.
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INCLUSIVE OWNERSHIP - The for-benefit corporation equitably distributes ownership rights among its stakeholders in accordance with their contributions.
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STAKEHOLDER GOVERNANCE - The for-benefit corporation shares information and control among stakeholder constituencies as they develop.
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FAIR COMPENSATION - The for-benefit corporation fairly compensates employees and other stakeholders in proportion to their contributions.
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REASONABLE RETURNS - The for-benefit corporation rewards investors subject to reasonable limitations that protect the ability of the organization to achieve its mission.
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SOCIAL RESPONSIBILITY - The for-benefit corporation committed to continuously improving its social performance throughout its stakeholder network.
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TRANSPARENCY - The for-benefit corporation is committed to full and accurate assessment and reporting of its social and financial performance and impact.