Business and Society

Benefits of becoming a certified B-Corp

-Strengthen Management Practices -Enhance Transparency -Reinforce Accountability -Build Trust -Customer Loyalty -Network and scale -Media Attention

What defines social entrepreneurs are the three main principles they follow:

1. They fall in love with the problem and not the solution. 2. They believe no one owns a social solution. Instead, it should be co-created with the community to ensure sustainability and impact using a change management philosophy. 3. They know impact is the bottom line of the social sector. They don't rely on innovation and invention alone; they prove impact and pursue scale—making them both visionary and disciplined in their approach.

Costs of becoming a certified B-Corp

-Certification Fee: A direct cost for all B Corps is the annual certification fee, which ranges from $500 to $50,000 or more, depending on the revenues and structure of the company. -Additional Resources: Another cost is the additional resources that may be needed to initially achieve certification and subsequently manage performance on scores over time. -No legal status: -Measurement Risks: The design of the scoring system used to evaluate B Corps could disadvantage companies by not accurately reflecting the true value of their social and environmental performance. -• Oversight Risks: Oversight of the certification process is critical to maintaining the quality and credibility of the B Corp stamp, and thus its value for companies. Reputational Risks: Achieving certification allows companies to enjoy many positive reputational benefits, for example through association with high profile B Corps such as Ben Jerry's.

Democratic ESOP

A democratic ESOP lays worker cooperative principles on top of an ESOP structure. The primary attribute differentiating a typical ESOP from a democratic ESOP is a participation and voting structure that provides for election of the board of directors (and voting on shareholder matters) by the entire workforce on a one-person-one- vote basis.

Digital enabled technology:

A new revolution in manufacturing is happening as digital fabrication technology such as 3-D printers becomes more affordable and accessible. Powerful digital software allows [makers] to design, model, and engineer their creations, while also lowering the learning curve to use industrial-grade tools of production.

A worker cooperative

A worker cooperative has a fundamentally different structure than a conventional firm, as it is owned and controlled by its workers. The shares are not just held by a select group of managers or supervisors, but all workers who have met certain basic eligibility requirements.

Social Innovation

About the IDEA! An idea in the form of a product, service or method — that creates change, performs better than existing solutions and for which the value accrues primarily to society.

Makers

Broadly, a maker is someone who derives identity and meaning from the act of creation. What distinguishes contemporary makers from the inventors and do-it-yourselfers (DIY-ers) of other eras is the incredible power afforded them by modern technologies and a globalized economy, both to connect and learn and as a means of production and distribution. These makers are the consumers of the future and likely the future of consuming.

Maker Faire

In a cavernous Silicon Valley event center on a sunny March afternoon, the aisles are filled with color and movement and a pervasive sense of wonder. And people. Tens of thousands of people crowd shoulder to shoulder to experience high- and low-tech gadgetry. Walls of LED lights brighten one end of the darkened warehouse, while at the other a metal-suited guitarist plays with lightning set off by giant Tesla coils. In the adjoining warehouse, crowds gather to watch 3-D printers produce small plastic objects from the bottom up, while synchronized quadcopters buzz overhead. In the distance, a dragon mobile breathes fire. Everywhere you look, it seems, people of all ages are taking things apart and testing new ways of putting them back together. This is Maker Faire. Events like Maker Faire accelerate sharing and testing of ideas and techniques, allowing individuals to come out from the garages, to inspire and be inspired, and, for some, to discover an audience.

Exchange of services

Its origins lie in time banking, which, in the United States, began in the 1980s to provide opportunities for the unemployed. Time banks are community-based, non- profit multilateral barter sites in which services are traded on the basis of time spent, according to the principle that every member's time is valued equally. In contrast to other platforms, time banks have not grown rapidly, in part because of the demanding nature of maintaining an equal trading ratio. There are also a number of monetized service exchanges, such as Task Rabbit and Zaarly, which pair users who need tasks done with people who do them, although these have encountered difficulties expanding as well.

Partnerships - Amplify Impact and Reach

Expanding access also requires partnerships to address systemic barriers ranging from low levels of social capital and trust among communities to unsupportive regulations and poor infrastructure. "If you want to stretch the impact and touch the bottom 20 percent of income distribution, the markets aren't going to do that by themselves." • Partnerships with government: Finding the right mix of policies, incentives, and investments is essential in supporting a more inclusive sharing economy. Many sharing economy companies sit within a legal gray zone. There is a need for sharing economy companies to partner with government to create policies that help them grow in a way that creates more benefits for more people and mitigates negative impacts. This could include adjustments to tax frameworks, consumer-protection laws, and zoning codes. It could also include policies that seek to integrate these new models into long-term city planning to address gaps in existing public services. • Partnerships with local communities and civil society actors: Engaging communities, especially local community groups and nonprofit organizations, can help companies identify and understand key community needs and launch pilot projects that tackle existing urban challenges. It can also help strengthen community trust in new models and promote the idea of sharing with strangers. Regulatory or technological fixes are not the only way to harness the sharing economy to promote greater inclusion. Companies must also commit to understanding and addressing the underlying inequalities in access to technology and credit, discrimination and distrust, and a host of other deep-rooted factors that prevent the sharing economy from working well for everyone. Engaging with communities can take the form of awareness and education on the benefits of new technologies. This is particularly important as research shows that low-income Americans are often the targets of scams that advertise fake education credentials or applications for government benefits, which contributes to growing suspicion of new technologies.

Main risks of ESOPs -Too Much Invested in a Single Stock

Financial difficulty experienced by an employer sponsoring an ESOP will eventually be reflected in the stock price, causing participants' retirement savings to suffer because they will be disproportionately invested in a single, poorly performing stock. • Even when an ESOP allows participants to elect out of employer stock, employees often do not do so. This places at greater risk those loyal employees whose faith in their employers leads them to hold on to the bitter end. • This problem is compounded by the fact that the dates when an employer lays off workers often correspond to dates when its stock value is down. This tends to result in situations in which employer stock has low values at exactly those times when participants have the greatest likelihood of needing to sell the stock. No other retirement investment has this peculiar feature.

Maker to maker

The distinction in this stage is that makers begin to collaborate and access the expertise of others, whether by formally building teams around projects or by simply asking for help from others who are willing to share their experience. At this stage, makers also contribute to existing platforms. Communities can now connect and share passions without limitation of distance, and individuals can move among communities rather easily, choosing their level of participation. Makers start to connect with one another through the same virtual and physical platforms that existed to draw people into the movement to begin with. Fragments of knowledge begin to concentrate, while more knowledge is developed in a decentralized fashion as new makers build on the foundation previously established. The desire to improve and share with others catalyzes the move to maker to maker.

• Community and collaboration:

Forums, social networks, email lists, and video publishing sites allow them to form communities and ask questions, collaborate, share their results, and iterate to reach new levels of performance. Communities can now connect and share passions without limitation of distance, and individuals can move among communities rather easily, choosing their level of participation.

Cultivate Diversity and Inclusion

In order for a sharing economy to be inclusive, it must cultivate diversity in a company's workforce and create good jobs in its whole value chain.

Typical types(Employment Model):

The employment model is widely used by disabilities and youth organizations, as well as social service organizations serving low-income women, recovering addicts, formerly homeless people, and welfare to work recipients. Popular types of employment businesses are janitorial and landscape companies, cafes, bookstores, thrift shops, messenger services, bakeries, woodworking, and mechanical repair.

Microfinance of Characteristics:

Its purpose is to help the very poor: The very poor do not have access to traditional financial services. Microloans, often averaging less than $150, allow people to start and expand tiny businesses without depending on moneylenders who demand exorbitant interest rates. Loans can also be used to finance health and education needs. Both borrowers and non-borrowers need a safe place to save their incomes, and insurance programs are critical to help protect the poor from falling further into poverty should an unforeseen event financially impact their lives. • Benefits an entire community: Microfinance provides the poor with the tools they need to reap the benefits of their skills and hard work and gives people the capacity to improve the quality of their lives and the futures of their children. Extra money earned is typically used by families to obtain better food, housing, and education. As a result, the returns benefit the entire community. • Economically sustainable because of high repayment rates. Microfinance is an economically sustainable method of fighting poverty. In developing countries, the rate of repayment of well-established microfinance programs can be in the 90 percent range. Repayment rates are high because, through a system of peer support and pressure used in many microfinance models, borrowers are responsible for each other's success, and they help ensure that every member of their group is able to pay back their loans. Moreover, loans provide borrowers with a dignified way to improve their lives, and for many, paying back their loans and being finically independent is a source of pride. • Cost-effectiveness and financial self-sufficiency. With support to grow and become self-sufficient, microfinance programs in developing countries need less grant money, can utilize loans and loan guarantees, and eventually get linked into the formal financial system. Well-run microfinance organizations in developing countries are eventually able to sustain their operations through interest income. Organizations have been able to cover 100 percent of operational costs with the interest income generated by loan repayments. In 1995, the Grameen Bank in Bangladesh began making a profit.

Maker space

The physical facilities where makers gather to learn and create. People can now access otherwise cost-prohibitive tools through sharing communities and hacker spaces, such as TechShop, Artisan's Asylum, and Fab Lab Barcelona, as well as spaces created by libraries, universities, and even museums. [It is] an open-ended invitation to the community to participate in creating and recreating, setting the stage for an infinite game. More shared spaces opening up that allow access to machines on a subscription basis. A member can reserve time on a traditional industrial machine like a lathe or gain access to newer technologies like 3-D printers. Spaces such as TechShop and 100kGarages function like gyms for makers, letting individuals pay for various levels of membership to gain access to machines, classes, and workspace.

Products and Process - Foster Inclusive Innovation

Many existing services target wealthier individuals. Consequently, there is a vast array of sharing models that provide "wants rather than needs." Companies can gain insight into low-income users' specific needs by taking a more human-centered approach to their product- and service-development processes. Such an approach has the power to open new markets with tailored innovations in delivery models and with product and service offerings that align with the needs of low-income individuals. Innovation management: companies can encourage employees to focus on inclusive innovation by setting inclusion as a top business priority, providing financial and other related resources, and rewarding and incentivizing employees who pursue inclusive innovation work. With the increase in machine learning and artificial intelligence, sharing economy companies also must be mindful of biases reinforced at the system level. Since algorithms learn by the data inputs they're given, a prominence of data from overrepresented or majority groups can unintentionally perpetuate exclusion. Algorithms to manage big data can also be biased by design, excluding specific individuals or groups. • Human-centered design: One of the innovation-management practices companies can implement is adopting a more human-centered approach to product and service design. Sharing economy companies can take cues from inclusive design practices seen across numerous other industries, ranging from furniture to urban landscape design. Design aficionados from these industries note the importance of understanding and engaging with end-users to achieve inclusive design. Applying immersive research principles can uncover hidden insights—particularly from those most prone to being overlooked. By directly understanding the needs of low-income populations, companies can better consider important contextual cues and design around barriers that may hinder adoption and access. Design research can help identify the most effective technology tool, payment system or structure, product or service, and corresponding delivery methods that improve inclusion. • Product and service innovation: With socially excluded users' needs in mind, many firms are exploring particular areas of the market with potential for attracting new users through additive innovations. For example, a Southern California firm developed a service for the elderly community that makes ride sourcing, food delivery, and other on- demand services available through an automated phone system—as opposed to a traditional smartphone interface.

Environmental(Motivations for sharing)

Many sites advertise themselves as green and present sharing as a way to reduce carbon footprints. It is a truism among "sharers" that sharing is less resource intensive than the dominant ways of accessing goods and services (e.g., hotels, taxis, shopping malls) because of the assumed reduction in demand for new goods or facilities. The ecological benefits of sharing are often seen as obvious: secondary markets reduce demand for new goods, so footprints go down. Staying in existing homes reduces the demand for new hotels just as toolsharing reduces new tool purchases.

Typical types (Market Intermediary Model):

Marketing supply cooperatives, as well as fair trade, agriculture, and handicraft organizations frequently use the market intermediary model of social enterprise. Common types of business that apply this model are: marketing organizations, consumer product firms, or those selling processed foods or agricultural products.

Microfinance

Microcredit is the provision of tiny loans at competitive interest rates for the very poor. Microfinance includes microcredit as well as other financial services (such as a safe place to save money and insurance) to the very poor so they can pull themselves out of poverty. Microfinance began as a way to finance self- employment ventures in places where poor people could not find satisfactory employment or obtain needed credit. It has since expanded to cover all the ways poor households can manage their finances through credit for such things as enterprise, education, housing, health care, as well as through protective services such as savings and insurance.

Fee-for-Service Model

commercializes its social services, and then sells them directly to the target populations or "clients," individuals, firms, communities, or to a third party payer. Embedded social program: the social program is the business, its mission centers on rendering social services in the sector it works in, such as health or education. Financial self sufficiency: through the fees charged for services. This income is used as a cost-recovery mechanism for the organization to pay the expenses to deliver the service and business expenses such as marketing associated with commercializing the social service. Surpluses (net revenue) may be used to subsidize social programs that do not have a built-in cost-recovery component. • Typical types: Fee-for-service is one of the most commonly used social enterprise models among nonprofits. Membership organizations and trade associations, schools, museums, hospitals, and clinics are typical examples of fee-for-service social enterprises.

Scale and fragmentation interact symbiotically

On one hand, the technological advances that make it easier and cheaper for an individual to create an item and take it to a broader audience are enabling a proliferation of smaller businesses. Meanwhile, as the number of small businesses grows, the need for large-scale providers—for example, of logistics, design tools, and marketplaces—to serve the fragmented businesses increases as well.

Embedded social program (Employment Model):

creating employment opportunities for clients. Social support services for employees such as "job coaches," soft skill training, physical therapy, mental health counseling, or transitional housing are built into the enterprise model and create an enabling work environment for clients.

Benefit corporation

describes a for profit corporate entity that legally incorporates using the relevant legislation in a state or country where it has been passed. At its core, the Benefit Corporation serves to answer the fundamental question - for what purpose does a corporation exist? - by expanding on traditional profit motives to also include the objective of creating a public benefit. The legal entity reinforces the role of business in society by not only permitting, but formally requiring a company's management and board of directors to consider the impacts of business decisions on a broader set of stakeholders beyond shareholders (e g customers and the wider environment).

Management and accountability: ESOPs

in the governance structure. In a typical ESOP, a small number of executives typically select (or serve as) the trustee and compose the majority of the board of directors. The board oversees the management, which is responsible for choosing and overseeing employees. Because the trust is administered on the behalf of participants, employees who participate in the plan have representation in governance, but only in their role as shareholders of the company. The trustee is not allowed to consider participants in their role as employees when voting the shares of the corporation.

Entrepreneur Support Model

Sells business support and financial services to its target population or "clients," self-employed individuals or firms. Social enterprise clients then sell their products and services in the open market.

Economic (Motivations for sharing)

Sharing economy sites are generally lower in cost than market alternatives. Particularly with P2P sites, value can be redistributed across the supply chain to producers and consumers and away from "middlemen," in part because producers' costs are lower. An Airbnb host, for example can deliver a room more cheaply than a hotel. The platforms' fees are also lower than what established businesses extract in profits. (Airbnb's maximum fee is 15%.) Service and labor exchange platforms, whether they are time banks or for-profit platforms like Task Rabbit, extract far less value than traditional agencies that arrange child care, concierge services, or home health care aides. The platforms also allow people to earn money in ways that had not previously been safely or easily available.

Maker to Market:

Some of the inventions and creations will appeal to a broader audience than the original makers. Some may even find commercial appeal. In this part of the spectrum, makers take deliberate steps to formally introduce their inventions to the commercial part of the spectrum. This is where the maker movement collides with the business world. This decision to scale and profit catalyzes the move from maker to market.

Democratization of manufacturing technology - anyone can manufacture :

The Industrial Revolution was a transition from making things with our hands to making things with mechanical or electrical machines in factories. A new revolution in manufacturing is happening as digital fabrication technology such as 3-D printers becomes more affordable and accessible. Manufacturing was once something that could be done by specially trained groups in industry with capital, but now it is possible for almost anyone to do it, even at home.

Maker movement:

The act of making is not new. For millennia, people have been manipulating objects to suit their needs and transform the world around them. Our built world and the many inventions and innovations that populate it are testament to the long history of making. What is new is how modern technologies, globalization, and cultural shifts are enabling and motivating individuals to participate in making activities and removing barriers all along the value chain, from design and prototype to manufacturing to selling and distribution. The impact of the maker movement will eventually permeate society, shifting identity and meaning from consumption to creation and blurring the boundaries between consumers and creators.

Open source:

The current maker movement, with its bent for "open source hardware," has parallels to the open source software movement. By enabling collaborative programming, the open source movement fundamentally changed the way software was developed, allowing for greater development speed and more robust solutions. Open source hardware opens the door for newcomers by undermining the proprietary foothold of a larger competitor. With design and technical specifications available online, hardware developers can modify existing hardware and do rapid prototyping and small-scale production runs.

Sharing of productive assets:

The fourth category consists of efforts focused on sharing assets or space in order to enable production, rather than consumption. Cooperatives are the historic form these efforts have taken. They have been operating in the US since the nineteenth century, although there has been a recent uptick in new ones. Related initiatives include hackerspaces, which grew out of informal computer hacking sessions; makerspaces, which provide shared tools; and co-working spaces, or communal offices. Other production sites include educational platforms such as Skillshare.com and Peer-to-Peer University that aim to supplant traditional educational institutions by democratizing access to skills and knowledge and promoting peer instruction.

Zero to Maker

The journey begins with inspiration to invent, the spark that turns an individual from purely consuming products to having a hand in actually making them. The inspiration can come from anywhere, from imagining a new approach to an everyday task (such as separating an egg yolk) to immersion in a new environment such as Maker Faire. To go from zero to maker, the two most important aspects are the ability to learn the required skills and access to the necessary means of production. The transfer of knowledge from the expert to the novice inspires more people to become involved and move from zero to maker.

Operational models

The operational models should not be confused with depictions of organizational or legal structures. Rather, they illustrate configurations used to create social value (measurable impact) and economic value (income), and can be applied equally to institutions, programs, or service delivery.

Recirculation of goods

The origins of [recirculation of goods] date to 1995 with the founding of eBay and Craigslist, two marketplaces for recirculation of goods that are now firmly part of the mainstream consumer experience. These sites were propelled by nearly two decades of heavy acquisition of cheap imports that led to a proliferation of unwanted items. In addition, sophisticated software reduced the traditionally high transaction costs of secondary markets, and at eBay, reputational information on sellers was crowdsourced from buyers, thereby reducing the risks of transacting with strangers.

Voting: Democratic ESOP

The primary way to structure a cooperative ESOP is through an instructed-trustee model. In this model, the ESOP trustee exercises the voting rights of all shares held in the ESOP rather than passing the votes through the trust directly to the employees. Democratic voting rights are codified in the trust documents that require the employees to vote on a one-participant-one-vote basis on all shareholder issues and then require the trustee to vote all shares in accordance with the results of employee voting.

ncreased utilization of durable assets:

The second type of platform facilitates using durable goods and other assets more intensively.

Management and accountability:

The worker-owners, on a one-member-one-vote basis, elect the board who oversee the management of the company, who in turn oversee the worker-owners. As a result, in contrast to a traditional firm, the worker cooperative model has an accountability loop that starts and ends with worker-owners.

Voting

The worker-owners, on a one-member-one-vote basis, elect the board who oversee the management of the company.

Main risks of ESOPs - Abuses Particular to Leveraged ESOPs

Type of ESOP - Leveraged ESOP: Retirement plans exist for the exclusive purpose of providing benefits to the employees participating in the plan. Employers generally cannot use retirement plan assets to finance employer operations. This means that retirement plan assets must be used to provide additional retirement benefits or to pay fees related to the administration of the retirement plan. However, an employer with a leveraged ESOP may circumvent this requirement by having its ESOP [trust] borrow from a bank (with the employer's guarantee, since the ESOP is not creditworthy by itself). The ESOP [trust] can then use that loan to purchase employer stock, and then use the revenue from that stock sale to finance employer operations Risks: • Using a leveraged ESOP as a tool for these types of corporate finance purposes can significantly harm the retirement security of the employees participating in that ESOP. While federal law requires that an ESOP loan be primarily for the benefit of the employees, this has not prevented employers from abusing the ESOP rules when it is beneficial to the employer's owner. Employers with leveraged ESOPs have been known to use favorable loan repayment rules to delay paying benefits to retiring participants. In a leveraged ESOP, the employer does not have to pay any retirement benefits until the debt has been fully repaid.

Motivations for sharing

Trendiness or novelty: Some participants are drawn by the trendiness or novelty of the platforms. It is, however, important to recognize that the novelty about which many participants (and platforms) talk can be an expression of classism and racism. Sharing is not just a relic of pre-modern societies; such practices remain more common in working-class, poor, and minority communities. The discourse of novelty employs a false universalism that can be alienating to people who have maintained non-digital sharing practices in their daily lives. • Technophilia also spurs participation. People enjoy the sophisticated interfaces offered by many sites and like using the internet to do things quickly and easily. Many users have been "digitally primed" by years of sharing files or contributing information online.

Main risks of ESOPs - Cash Distributions from ESOPs Holding Privately Traded Stock

Type of ESOP - holding privately traded stock: An employee participating in an ESOP holding privately- traded stock will need to have the value of the stock in his or her account paid out in cash during retirement because there is no ready market in which to sell privately-traded stock. Tax law gives employees participating in these types of ESOPs the right to receive payouts in cash, along with the right to have the stock's value determined using a fair valuation formula. This arrangement benefits employers because employees, presumably, are more productive when they have a stake in the employer's success

Founders

Unlike in a conventional firm, the founders of worker cooperatives have the same voice as all worker-owners in governance decisions. However, they may receive additional compensation based on their early commitment and sweat equity in forming the company.

Overlapping structure:

some worker cooperatives (often called worker collectives) forgo a board and management layer altogether, instead having all worker-owners serve as governing body of the organization. At larger companies that use this structure, worker-owners may organize into semiautonomous work groups that govern the different functions of the business (for instance marketing, sales, operations, etc.)..

Embedded social program (Market Intermediary Model)

strengthening markets and facilitating clients' financial security by helping them develop and sell their products.

• Ease of learning:

What renders making less daunting is easier access to sources of inspiration and learning. Such sources have proliferated as a result of digitization and increasingly cheaper tools of production. Makers can more easily access stores of information—both in physical settings such as local workshops and in virtual settings such as online community portals—to fill gaps in knowledge and capabilities.

Wide range of accessibility:

With greater access to tools, training, and community, not to mention the technology-guided tools themselves that are less expensive and easier to use, the hurdles to creating are disappearing. Access to suppliers, customers, and funding makes it easier for individual makers to reach a broader audience. Makers have access to sophisticated materials and machine parts from all over the globe.

Certified B Corporation

a company which has been accredited for "meeting rigorous standards of social and environmental performance, accountability, and transparency" by the non profit organisation B Lab. B Lab promotes a global movement towards using 'business as a force for good', with the vision that businesses will compete to improve the world and create enduring prosperity.

employee stock ownership plan, or ESOP

a type of employee benefit plan (like a 401(k) or profit sharing plan) that can be used to transfer partial or full ownership of a company to employees. With an ESOP, the company is structured as a C or S corporation where the stock is held by an ESOP trust, which is administered by a trustee on employees' behalf

Low-Income Client as Market Model

is a variation on the Fee-for-Service model, which recognizes the target population or "clients" a market to sell goods or services. The emphasis of this model is providing poor and low income clients access to products and services whereby price, distribution, product features, etc. bar access for this market. Examples of product and services may include: healthcare (vaccinations, prescription drugs, eye surgery) and health and hygiene products (iodize salt, soap, eyeglasses, earring aids, sanitary napkins), utility services, (electricity, biomass, and water), etc. for which they pay. The Low Income Client as Market Model target population has also been described as those living at the "base of the pyramid." • Embedded social program: in the activity by providing access to products and services that increase clients' health, education, quality of life, and opportunities. • Financial self sufficiency: Income is earned from product sales and is used to cover operating costs and marketing and distribution costs. However, due to the low incomes of target population in the "low income client as market model" achieving financial viability can be challenging. The social enterprise must rely on developing creative distribution systems, lowering production and marketing costs, achieving high operating efficiencies, cross-subsidizing creative revenue markets to markets that require subsidy. • Typical types: Fee-for-service is one of the most commonly used social enterprise models among nonprofits. Membership organizations and trade associations, schools, museums, hospitals, and clinics are typical examples of fee-for-service social enterprises.

Social enterprise

is about the BUSINESS MODEL. Social enterprise is a business — whether operated by a for-profit or nonprofit — that has a double bottom line of both maximizing social and financial return. While social enterprise may use some philanthropic dollars in the start-up phase or for special projects, it is geared toward the creation of a self-sustaining, market-based business model.

social entrepreneurship

is about the MINDSET. Social entrepreneurs are change agents who are relentless about fashioning bold and creative solutions—through the creation of new organizations or as "intrapreneurs" within existing organizations and communities—to create social change. While they are social entrepreneurs, their organization may or may not be a social enterprise, and their idea may or may not be socially innovative.

Voting: Under the plan

participants must have voting rights on certain major issues (called pass-through voting rights) such as dissolution or sale of company assets, which is typically provided on a one-share-o

Cooperative Model

provides direct benefit to its target population or "clients," cooperative members, through member services: market information, technical assistance/extension services, collective bargaining power, economies of bulk purchase, access to products and services, access to external markets for member-produced products and services, etc. The cooperative membership is often comprised of small-scale producers in the same product group or a community with common needs-i.e. access to capital or healthcare. Cooperative members are the primary stakeholders in the cooperative, reaping benefits of income, employment, or services, as well as investing in the cooperative with their own resources of time, money, products, labor, etc. Embedded social program: the social program is the business. The cooperative's mission centers on providing members services. • Financial self sufficiency: through the sales of its products and services to its members (clients) as well as in commercial markets. Cooperatives use revenues to cover costs associated with rendering services to its members and surpluses may be used to subsidize member services. • Typical types: Agricultural marketing cooperatives, which market and sell its members' products, while agricultural supply cooperatives, provide inputs into the agricultural process. Self-Help Groups (SHGs) comprised of low income-women, are frequently organized into cooperatives to support a variety of their members' interests related to commerce, health and education. Credit Unions are another example of a cooperative tied to economic development and financial service programs.

Employment Model

provides employment opportunities and job training to its target populations or "clients," people with high barriers to employment such as disabled, homeless, at-risk youth, and ex-offenders. The organization operates an enterprise employing its clients, and sells its products or services in the open market. The type of business is predicated on the appropriateness of jobs it creates for its clients, regarding skills development, and consistency with clients' capabilities and limitations, as well as its commercial viability.

Market Intermediary Model

provides services to its target population or "clients," small producers (individuals, firm or cooperatives), to help them access markets. Social enterprise services add value to client-made products, typically these services include: product development; production and marketing assistance; and credit. The market intermediary either purchases the client-made products outright or takes them on consignment, and then sells the products in high margin markets at a mark-up.

Embedded social program (Entrepreneur Support Model):

the social program is the business, its mission centers on facilitating the financial security of its clients by supporting their entrepreneurial activities.

Financial self sufficiency(Market Intermediary Model):

through the sale of its client-made products. Income is used to pay the business' operating expenses and to cover program costs of rendering product development, marketing and credit services to clients.

Financial self sufficiency (Employment Model):

through the sales of its products and services. Income is used to pay standard operating expenses associated with the business and additional social costs incurred by employing its clients.

Financial self sufficiency(Entrepreneur Support Model)

through the sales of its services to clients, and uses this income to cover costs associated with delivering entrepreneur support services as well as the business' operating expenses.

• Similarities between developed and developing countries for MFIs

• Access to microbusiness loans for certain types of entrepreneurs: Changes to the banking industry, accentuated by risk aversion brought on by the recession, have made it much harder for entrepreneurs in developed countries to get small business loans. The community development finance institution sector in the United Kingdom and the United States, although valuable in supporting housing and small and medium-size enterprises, does not generally provide microbusiness loans. Neither can poorer entrepreneurs turn readily to their credit cards or overdraft facilities to manage cash flow or capital. The difficulty in getting small business loans is particularly acute for women, blacks, Asians, and other minority groups, for people receiving income-related benefits, for those with criminal records, for residents of deprived communities, and for recent immigrants. • Financial exclusion - Unbanked and underbanked: Although financial exclusion in developed countries is far less severe than in the developing world, there are still a surprising number of people who are "unbanked" (those who lack a bank account) and "underbanked" (those who are excluded from mainstream bank lending and credit cards because of bad credit scores or irregular incomes). In the United Kingdom more than 1.5 million people lack bank accounts, and in the United States 7 percent of households are unbanked and 21 percent are underbanked. When the unbanked and underbanked want to access credit, they often turn to loan sharks, doorstep lenders, or payday lenders who charge exorbitant rates of interest— 300 percent APR and upward. • MFIs offer an alternative to these predatory lenders. They help job and business creation, which in turn take people off benefits, increase family income, and create sustainable businesses. On the personal microfinance side, counseling helps clients to manage indebtedness, reduce rent arrears, and prevent evictions, and more reasonable credit relieves poverty through reduced interest payments, builds credit history, and increases financial inclusion.

Partnerships - Amplify Impact and Reach Contd

• Partnerships with other sharing economy companies: While sharing economy companies are still jockeying for competition, many are starting to see the value in partnering with their peers, especially when it comes to advocacy and positioning with regulatory bodies. • Partnerships with the broader business community: With the rapid growth of the sharing economy in U.S. cities, many traditional businesses that previously saw the sharing economy as a threat are now seeking to partner as a way to innovate and retain and expand their market reach. These partnerships can be attractive to sharing economy companies, especially when they help overcome external barriers such as poor access to credit for low-income service providers or users. These partnerships include traditional and even competing businesses—for instance, in car rental or hospitality industries—as well as partnerships with payment and technology companies that serve as facilitators or enablers. Alternative finance and money systems such as cooperative finance or digital currencies are emerging that could help more users participate in the sharing economy. If these types of models addressed specific needs of smalland medium-size enterprises in low-income neighborhoods, this could unlock significant opportunities for small businesses, support positive relations in communities, and promote more sustainable use of resources. Promoting sharing of assets with businesses is also seen as part of companies' commitments to sustainability, especially when this enables companies to reduce or eliminate waste or unused assets.

Key requirements for certification for B-corps:

• Performance Requirements: The performance requirement for certification is determined by taking the B Impact Assessment. This measures a company's impact across the following four thematic areas - workers, governance, community, and the environment, which combine to produce an overall score. B Lab establishes the minimum score which must be achieved for a company to become certified. Points are awarded for every positive answer to the assessment questions, with no negative scoring. Any score above zero is considered to be good as it reflects a company's positive impacts on society and the environment. • Transparency Requirements: B Corps must make their B Impact Assessment Report publicly available. This presents a summary of the scores achieved in the four assessment areas identified above. • Legal Requirements: The company must also meet the legal requirement of the certification by requiring company directors to consider the interests of all stakeholders, not just shareholders. This can be achieved by amending the company's articles of association, or by adopting a corporate form such as the Benefit Corporation, which automatically fulfils this criterion. Governing corporate documents may be amended to state that in discharging their duties, directors "shall consider the effects of any action or inaction" on a list including -employees, suppliers, customers, the environment, short and long-term interests of the company, and the creation of a material positive impact on society as a whole.

• Major ways developed countries differ from developing countries for Micro-Finance institutions (MFIs)

• Severe indebtedness [in developing countries poor people don't have credit cards and other sources of debt that many poor people in developed have]: Potential clients in the developed world often struggle with severe indebtedness. Clients need to be advised on how to manage their debts and how to get out of the spiral of indebtedness. • Communities not as close-knit so peer-to-peer lending doesn't work: The peer-to-peer lending approach that worked in Bangladesh would not work in London. That was because communities were not particularly close-knit, and peer-to-peer groups, although good at building networks and relationships, proved less good at supporting entrepreneurs. [Microfinance] service needed to work more like a community bank, with loan officers dealing directly with clients and offering training to those creating startup businesses. • Significant demand for small personal loans: The need for microfinance in the developed world lies not just in small business loans. Personal microfinance as well as counseling and education around indebtedness have become part of the microfinance provision. Customers might need cash until payday, a loan to buy a car, or money for a funeral or to pay overdue bills. • Loan provision is a much more costly business than in the developing world. More direct and expensive communication between the loan officer and client is required. In addition, the vast majority of loans are to start businesses, requiring MFIs to provide business training to clients. The lack of an entrepreneurial and aspirational culture among low-income groups, the bureaucratic hurdles in setting up a business, and the existence of the welfare state mean that clients thinking about starting businesses need support to make the leap, which again translates into high education and counseling costs. Meanwhile, the problem of indebtedness and the need to increase financial literacy and counsel clients add to operational costs. And the stronger regulatory environment means there are often caps on interest rates, so it is hard to price a loan to cover its cost. Last, only banks can take deposits, which means that the more financially sustainable microfinance model of having savers and borrowers is unavailable to nonbank MFIs like Fair Finance.

• Commercialization is easier and low cost:

• Technology: The technology-guided tools themselves that are less expensive and easier to use. The same forces that are democratizing information—improved cost-performance of technology driving digitization and connectivity—are also lowering the cost to produce physical objects. Never before has it been so easy to create or modify something with minimal technical training or investment in tools. This allows more people to develop their ideas into tangible prototypes and begin to test their prototypes with potential customers. • Capital and ongoing operational costs: Seed capital from crowdfunding sites such as Kickstarter, cheap manufacturing hubs, international shipping, and e-commerce distribution services such as Etsy and Quirky help makers commercialize their creations. Moreover, people can now access otherwise cost-prohibitive tools through sharing communities and hacker spaces, such as TechShop, Artisan's Asylum, and Fab Lab Barcelona, as well as spaces created by libraries, universities, and even museums. • Expertise: Incubators and other intermediaries have sprung up to assist makers in refining their inventions and finding efficient ways to bring products to market. Indeed, in the last five years, crowdfunding platforms such as Kickstarter and Indiegogo have funded hundreds of millions of dollars of maker-related projects, while organizations such as Shapeways and Ponoko are allowing makers to turn complex designs into actual products.

• Social(Motivations for sharing):

• The desire to increase social connections is also a common motivation. Many sites advertise this feature of their activities, and participants often articulate a desire to meet new people or get to know their neighbors. • A commitment to social transformation is an important motivator. [The author's] Connected Consumption Research Team has found that many respondents emphasize the value of sharing and collaboration, and some are highly critical of capitalism, the operation of the market, and the business-as-usual economy. Ideological motivation, however, varies by site, with less exhibited by earners on platforms such as Airbnb and RelayRides and more by participants in time banks and food swaps. • Stranger sharing: Today's sharing platforms facilitate sharing among people who do not know each other and who do not have friends or connections in common. Stranger sharing entails higher degrees of risk, and many of today's exchanges are quite intimate—sharing one's home or car, going into strangers' homes to do work, or eating food prepared by unknown cooks. The platforms reduce risk by posting information on users via feedback and ratings. This points to a second novel dimension—the use of digital technology to reduce transactions costs, create opportunities in real time, and crowdsource information. The uniqueness of this new sharing economy is that it mobilizes technology, markets, and the "wisdom of crowds" to bring strangers together.

Main risks of ESOPs - Cash Distributions from ESOPs Holding Privately Traded Stock Risks

• The stock's value for purposes of the cash payouts must be determined by an independent appraiser. But the employer has a role in selecting the person who makes that calculation, which might create a conflict of interest, since that person owes his or her job to the employer. An employer may be tempted to manipulate the stock value to appear lower if it knows that an employee with a large balance will soon be making a distribution or if the employer is in a cash-flow crisis. Conversely, the employer may want to manipulate the stock value to be higher at the time the ESOP acquires the stock or when a person controlling the plan is about to make a distribution. • ESOP participants technically do not have ownership rights to the employer stock held in their accounts because the stock is held in trust. This means that, even though the stock is being held in the ESOP for the exclusive benefit of the participants, the trustee - who is typically selected by the officers of the company - is the actual shareholder and thus exercises voting rights under the stock, including selecting the board of directors. • Existing legal requirements for cash payouts enable employers to delay making payouts for months or even years, which may cause some retiring employees to experience unexpected financial difficulty. While employers typically prefer former ESOP account balances to be paid out promptly, that attitude can quickly change if the corporation has a cash-flow problem. ESOPs holding privately-traded stock are exempt from the rule that prevents other private retirement plans from cutting back on lump-sum payout rights. As a result, an employer with cash-flow difficulties can amend its ESOP at any time, without notice, to immediately shift from lump-sum payouts to five-year installments for recently-retired employees. In some cases these installments may not even begin until seven years later.

Main risks of ESOPs -Too Much Invested in a Single Stock

• Type of ESOP - retirement investment: The federal laws governing employer- sponsored retirement plans, such as pensions and 401(k) plans, require that the individuals in charge of investing plan assets diversify these investments. But there is an exception for ESOPs, which are designed to be invested in employer stock.